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@Ian B:

Not sure about UK, but with the PayAtPump (PAP) technologies that we're familiar with in USA, Canada, Australia and India, no dab hands at syphoning fuel back are required!

The motorist first inserts the card into the card reader located at the gas station's forecourt and enters the amount of fuel required. The PAP system gets a pre-authorization from the card-issuer bank and only then unlocks the dispenser to dispense fuel. Any difference between the actual and expected amounts are processed through another transaction. However, in each and every case, we've seen gas stations allowing motorists to walk into the store located inside the gas station and alternatively pay cash to the human attendant sitting by the till.  

Having personally used both channels for complaints, I see a few major differences between Twitter and the service provider's (e.g. bank) dedicated channels (e.g. call center, website): 

1. Twitter complaints can be unstructured - even frustrations and exasperations can get onboard Twitter before they are formed fully enough to fit into service provider's structured complaint channels.
2. Complaints on Twitter can get magnified via retweets by followers in the public domain, whereas service provider's complaint channels are one-on-one. To that extent, the former channel poses reputation risk whereas the latter is only subject to internal management. 
3. I'm not sure if it's technically impossible, but I've never received autoresponders in response to my complaints over Twitter - either I get a quick response or don't hear back at all. 

When it comes to how banks and other service providers should treat Twitter complaints - respond or stonewall - something tells me that they'll use the same ROI approach to planning any investments in this space as they do for all their other investments!

Only mass transits, tollways and other quasi-monopolies can afford to say "I'm sorry sir, we don't accept cash". For one, as long cash is legal tender, I'd imagine that it's simply illegal to refuse cash. More importantly, for every merchant who declines cash, there's another who accepts it, so customers could equally well say "I'm sorry sir / madam, we won't buy from you". Point is, cashless methods of payments will find mass adoption only if they provide consumers with greater convenience and / or security than cash, not because they're archaic or cheaper to process by banks / merchants.

While on this subject, let me cite the example of Flipkart which has shown that cash can equally well be on the way in even in today's world for unexpected usage scenarios.  

Online book sellers have been around in India for over 10 years. But, it's the new kid on the block Flipkart that has taken book etailing to never-before heights. Its runaway success is widely attributed by analysts and market observers to a new payment method it popularized (though didn't invent): Cash on Delivery, where the customer pays by cash to the courier who delivers the consignment and doesn't need to use ePayments.

Similar examples like Kwedit in USA suggest that cash isn't going away anytime soon. 

Somewhere along its hype cycle, we've seen mobile payments getting linked to the unbanked. If the situation in India - home to at least one of the 3-4 unbanked billions in the world - is any indication, this link simply doesn't exist. According to current regulations in India, mobile payments can only work off of bank-issued credit / debit cards, and are, therefore, not available to the unbanked who have no bank accounts. While things may change in future, this is the current situation in the mainstream. 

Banks who've missed the mobile payments bus / boat should probably count themselves the smart ones, going by this recent American Banker article titled "Mobile Payments Very Unimportant to Consumers' according to which:

1. Banks and their partners could be wasting money developing mobile wallets...
2. ... the convenience of traditional credit or debit cards is hard to beat.
3. It's not easier, faster, better, more helpful to pay with your phone than to take your wallet out.

Ah, what relief to know that I belong to the majority! Zong, Boku and other MNO-billing based mobile payments are truly disruptive but they're far from mainstream. The myriad m-wallets hogging the limelight use the same bank-issued cards and I honestly fail to see how adopting them is so different from chucking one leather wallet and moving my cards to another leather wallet. 

Great article! Drawing an analogy between smartphones / tablets and laptops is a masterstroke in making the case for the adoption of mobile devices in investment banking applications.

Now, the bad news: A Top 5 UK bank had a corporate policy until three years ago not to have WiFi on its corporate laptops! (To be sure, their policy changed later).

Point is, while security might be the bogey, the bigger challenge might lie in finding compelling reasons for using mobile devices to access such applications in the first place viz. does smartphone-based trading improve trader productivity without introducing new compliance risks; can a financial adviser increase ticket size by reviewing the customer's portfolio on a tablet, etc. The challenge is exacerbated by the fact that banks have already invested in enabling these applications for laptops not so long back and now need a strong business case to justify additional investments to enable them for mobile devices. While only time will tell when and whether this will happen, we can be reasonably sure that alleviation of security concerns will not be the tipping point.

There are precedents of banks using differential charges to trigger the desired consumer behavior w.r.t. method of payment and channel e.g. charges for making credit card payments by cash so that people pay electronically, higher charges for making a cross-border fund transfer by visiting the branch instead of doing it via Internet Banking, etc. That being the case, I've never understood why banks don't levy charges in proportion to the higher processing costs for cheques alongside giving credits for users who face downtime and confusion while using ePayments. We'll then have a basis of figuring out whether cheques are really more convenient as compared to its alternatives, and whether its alternatives really work as frictionlessly as cheques.

On another note, cheque is not the only form of paper-based payment instrument. I can think of at least one more, namely, the Ueberweisungsauftrag - or credit transfer order - that's quite popular in Germany. Banks convert them to electronic forms before forwarding them for clearing. Therefore, they're treated as ePayments, but, in the hands of the payors, they're paper-based. While they might not use cheques, users of such alternative instruments in such countries are unlikely to be amused with what's happening in UK or find cheques so archaic. 

If there's one practical takeaway I gathered from a few successful regulatory programs (e.g. FPS) and other not-to-successful ones (e.g. SEPA), it's this: Regulators and banks should see themselves as being on the same side of the table. While purists might see such an approach as having similar hazards as letting MPs vote on a bill for their own pay rise, an adversarial positioning between regulators and banks doesn't help either. By often resulting in (a) Specs being fed in drip-feed mode (b) Unrealistic deadline pressures and (c) Stigma of missing cutover dates, an adversarial position discourages holistic views even within a single regulatory program and precludes any scope for out-of-the-box thinking around how a bank or FI could add business value to its compliance initiatives. 

@Craig R:

Apart from TARGET2 which is only applicable for EURO payments, are you aware of any realtime, cross-border, bank-to-bank payment methods? The fastest I've come across for, say, the USA-INDIA corridor, is the T+2 Amex FX International Payments product.

Interesting article. Only yesterday, I came across a very useful perspective about the difference in drivers for online advertising on search (e.g. Google Search) versus social networks (e.g. Facebook). According to this viewpoint, search is more relevant for food, housing, employment and other things at the bottom of Maslow's famous pyramid of human wants and needs whereas social network is more applicable for esteem, recognition and other things on the upper layers of the pyramid. While only time can tell how well this predicts relative market share of Google AdWords and Facebook Ads, this perspective did sound quite logical at first glance.