The alternative is to go around credit cards and build something completely new. This leaves much more room for a sustainable margin, but then you’re left with the absolutely massive network problem. If you think getting a social network off the ground is hard, when the only obstacle is getting people to enter in an email address and password, imagine having to simultaneously distribute a means of accepting payments to merchants and a means of making payment to consumers, all at the same time, because if you only have one you basically have nothing.
This is why I, for the foreseeable future, expect to see little if any progress in the United States.
I think Thompson makes a great point—too many merchants are comfortable with the current system and it’s convenient enough for most Americans, so we may not see much change. I’d really like to see more secure options, or more smartphone-oriented options that aren’t terrible. Although they recently switched to Square for their backend, I still think that Starbucks has the best mobile payment system that actually makes people want to use it (load up a card and then it’s in Passbook and the Starbucks app, you can reload and manage, and they recently added tipping). It’s convenient, but also reliable in that you don’t get that I’m-using-cutting-edge-technology-that-is-half-baked-and-I-look-like-a-bozo situation.