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Compared to telephone verification (for each transaction), Realtime SMS Alert provides a more cost-effective and less frictional method of detecting card fraud. The Indian regulator has made it mandatory for all card transactions in India since July 2011. 2-way SMS Alert goes a step further and can even prevent card fraud. As with all technologies, design and implementation challenges remain, as I'd pointed out in these Finextra posts:

https://www.finextra.com/blogs/fullblog.aspx?blogid=5772

https://www.finextra.com/blogs/fullblog.aspx?blogid=5801

https://www.finextra.com/blogs/fullblog.aspx?blogid=5936

Faster Payments has been providing same-minute / same-hour ACH payments mostly for free in the UK. If Same Day ACH is still not a reality across the pond more than three years later, I can think of the following reasons apart from fears of cannibalization of wire transfers: (1) Friction involved in having to enter enter the account number, accountholder name, routing number and other payee bank details (2) Risk of fraud arising from the uniquely-American-ACH facility whereby Person A can "pull" out money from Person B's bank account merely by quoting Person B's bank account details.

A parallel discussion thread suggests that Klarna, a bill me later service, could play a dominant role in online payments. Klarna does not use the credit card form factor or rails. 

http://techcrunch.com/2011/12/10/moritz-klarna/

So could Cash on Delivery (COD) that has given a shot in the arm to e-commerce in India.

Both Klarna and COD involve transaction fees that are similar to credit card and much lower than GenY Mobile Payments. 

Having said this, I realize that Klarna and COD are popular in markets where credit cards are not the dominant method of payment. How well they would fare in markets like USA where credit card has been the #1 incumbent method of payment remains to be seen.

I've referred to Zong as a representative of MNO or GenY Mobile Payments (GYMPs). While they started off as Direct Carrier Billing, the high margins charged by MNOs made GYMPS unviable for anything other than niche segments viz. virtual goods having virtually 100% margins. To scale up and garner a sizeable share of the mainstream payments market, a few GYMPs have launched variants of their products in which payers can link their mobile phones to, ahem, good old credit cards, thus keeping the MNOs out of the loop. So, what started with the potential of disintermediating banks and credit cards has now morphed into merely another form factor to replace the plastic of credit cards at the frontend but not the credit card rails at the backend.   

Credit cards surely involve the friction of the payer having to enter 80+ characters to complete a transaction. However, some of their benefits to the buyer - ubiquity, realtime authorization, no-questions-asked-revocation-rights, rewards and fraud protection - still remain unmatched by most alternative payment methods.

TapBuy, PayPal, Zong, Google Wallet and others are what I'd call "alternative frontend payment methods" that eliminate credit card friction by asking the shopper to enter PIN, password and other far more convenient surrogates of card details but still use credit card rails to process transactions. 

In 10 years, I predict that credit card rails will continue to power a majority of online transactions on the backend but the plastic form factor of credit cards might give way to such alternative payment methods on the frontend. In other words, credit card accounts will continue to be around, banks and Visa / MasterCard will continue to make money from their credit card lines of business, but payers might reach out for their mobile phones more often than plastic cards to make online payments.

"Furthermore, ... (is it) because Brits are more concerned about privacy and data security – yet consumers are willing to enter payment details into retail sites without question?" Not necessarily. Let alone concerns around privacy / security, there's too much friction involved with entering so many keystrokes on a mobile phone. With PayPal, they don't have to. This probably explains the relative popularity of PayPal Mobile. And, with apps like TapBuy (www.tapbuy.net) combining the allure of daily deals and mobile coupons with the convenience of 1-click shopping - no need to enter payment details beyond the first time - mobile shopping does seem fun. 

It's interesting to note that a bank customer shies away from using Facebook Connect on Internet Banking - as Movenbank recently reported - but, when they turn shoppers, are far more comfortable about logging on to an etailer's website via Facebook / Twitter and paying with PayPal. 

The combination of the above factors leads me to believe that mobile shopping has a much brigher future than mobile banking.  

@JohnD:

I've personally interacted with Marion King while leading the consortium that included VocaLink and implemented FPS for a Top 5 UK Bank. Against this backdrop, I fully agree with your views about her. Best wishes to her and to the incoming CEO David Yates in their respective future endeavors. 

I've read several reports saying that the market for P2P is at least two orders of magnitude lower than that for P2B, so banks might not be interested in P2P in the first place due to their higher cost structure stemming from risk management and other compliance costs. As for P2B, I think banks have done a lot already by way of implementing online bill payment solutions on Internet Banking. Online bill pay seems to be very popular, given that many customers have already set up recurring mandates on their bank websites and find the cost of switching to another bank quite high. 

As a merchant, I'm not a great fan of PayPal. However, this survey refers to consumers. Based on my personal experience of using PayPal as a consumer to make payments, let me put some facts straight as I see them: 

1. In close to 10 years of using PayPal as a consumer, I've never ever seen my account go dormant despite long periods of non-usage to make payments.  
2. Most horror stories are of PayPal merchant - not consumer - accounts getting frozen.  
3. While merchants get Seller Protection only on rare occasion, consumers almost always get Buyer Protection when they pay with PayPal. As a matter of fact, PayPal uses the latter point to justify why it needs to inspect sales transactions frequently, which is often an euphemism for freezing merchant accounts. 

If banks have to take the permission of Apple and Google to get mobile banking apps on to their own customers' smartphones, it's only fair that Google should face a similar situation with Verizon and other MNOs with its Google Wallet app. Either both practices invoke antitrust concerns or neither does.