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Short answer is that banks certainly CAN meet the needs of low-income consumers, but decades of purposefully excluding them shows that they WON'T.  Besides, the products and services offered by traditional banks fail to meet the unique needs and wants of non-traditional consumers. Once governments and central banks understand that trusted local, community/village businesses and organizations need to be integrated into the delivery of financial products and services, enfranchisement of low-income consumers can take place. 

The fundamental flaw in the Payments Council's thinking is that, unlike credit cards and e-payments, debit cards (particularly prepaid) are cash equivalents.  

Have to wonder about the motivation and the emotional fragility of the Payments Council in making an announcement that is clearly impossible to substantiate.  What it does accomplish is reminding consumers how important it is to retain the option to use cash and resist initiatives to promote "cashlessness" to avoid increasing government intrusion into their financial lives. 

After decades of following nonsensical advice from mega-consulting firms designed to increase profitability by reducing customer-facing engagement, banks are facing the inevitable consequences of the mistaken belief that consumers exist to serve banks rather than the other way round. Increasingly, consumers are turning to alternative providers that serve their financial needs when, where and how they prefer -- without the tyranny banks have exercised for generations. 

David, precisely my point. Its likely that only 1 of the 2 transactions you describe would be made in the same locale as the associated mobile device. The mobile adds the all important, out-of-band, 2d level of authentication that has been missing from the payment card biz. 

Long past time for Visa (and MasterCard) to stop wasting time, resources & cardholder patience trying to substitute mobiles for payment cards instead of using mobiles to secure transactions made with cards. The former has always been a novelty & a solution looking for a non-existent problem.  The latter has been an opportunity to ensure that a payment card is being used in the same local as an associated mobile device.

So sad that what Gates and other late-to-the-party) mobile banking sycophants fail to realize is that the technology alone does little if anything to improve the financial lives of low-income consumers. The key is incorporating trusted, local non-bank businesses to act as critical customer cash-in/cash-out interfaces for mobile financial service schemes. Also the word "banking" has little allure for these consumers. They want to perform transactions and protect their money, NOT have relationships with institutions that have shunned them for generations.  

Agree with Ketharaman. Amazing how often I see the nonsensical term "prepaid credit card" in what purports to be serious discussions of payment cards. Gotta wonder about a company that does not know how to describe its own offerings.

Yesterday's announcement by the Reserve Bank of Australia that it is yet again delaying a real-time payments system due to lack of support from big domestic and international banks appears to show the dramatic difference between what banks tell researchers like Ovum and what they do in the real world. Bottomline - the Too Big To Behave Banks have no interest in improving the payments system as they make money capitalizing on the system's innefficiencies. 

With the Payments & Small Bank initiative, the RBI has figured out what central banks of major developed countries refuse to admit, that continuing to expect big banks to 'bank the unbanked' is a fool's errand. Big banks continue to be inhospitable to small depositors. They are inconvenient in locations and operating hours. And their tradtional products and services offerings fail to respond to the unique needs, preferences and lifestyles of non-traditional consumers. In addition to licensing new institutions with new consumer mind-sets, encouraging the licensing use of non-bank businesses (already used and trusted by non-tradtional consumers) as banking correspondents is key to expanding the financial capabilities of all consumers.