That is backwards compatibility, not lack of innovation. You have (some) cryptography on the chip.
> Checks physically show numbers
That, again, is backwards compatibility.
> ACH, involves banks FTP-ing massive text files
Yes, that sucks.
> no used standard for peer to peer
Wire transfer?
> Massive data breaches by banks
Massive data breaches by everyone, this is not a bank problem - this is an industry-wide problem.
> response to endemic fraud is to revoke cards
What is your point here? Would you prefer to revoke a certificate instead? But we already established that pesky concept of backwards compatibility and real world.
Chip and PIN is a private initiative. I don't know why it took off in Europe/Asia and not in the USA, but it has little to do with the state.
Let's look at "innovation" in consumer banking:
-Debit and credit cards physically show numbers that give full access to the accounts 40 years after modern public key cryptography was invented
-A very modest improvement to this system, known as PIN and chip, came to the U.S. recently after years in Europe and Asia; the Wall Street Journal has called this very basic change a "nightmare" more than a year into implementation, doubling average transaction times to 13 seconds (!!) in an informal test. Only 28 percent of merchants supported the technology.
-Checks physically show numbers that give full access to accounts
-The standard consumer "friendly" way of moving money electronically, ACH, involves banks FTP-ing massive text files to one another, batch processing them overnight, and clearing transactions in 24 hours or more.
-There is no used standard for peer to peer consumer electronic transfer
-Massive data breaches by banks have become incredibly common
-The response to endemic fraud is to revoke cards and mail new ones and/or to repair and monitor credit on an ad hoc basis