I rather get the impression that the market doesn't always work like economists would like it to work. But do we really need competing banks just for the basic stuff like processing payments? It seems plausible that it's a good idea to have multiple competing banks for the more complex services but perhaps the basic processing of payments could be handled by the government, which already has the monopoly of providing the currency in the first place. Just a thought. Free markets are a tool, not a religion, right?

Some people might insist that a government monopoly would be worse but here in the UK I've noticed that government web sites are usually less crap than web sites created by the private sector.

Voting with your feet only works if there’s somewhere else for you to walk to.

in many places there is no bank that offers an alternative