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Public discourse on retail payments and the case of CBDC

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  • Bindseil, Ulrich

Abstract

The retail payment industry is significant, affects every citizen and is a very precondition for a modern society based on the division of labor. It is characterized by two-sidedness, strong network effects, high fixed costs, high concentration and high profitability of successful firms, layering, path dependencies and stability of inferior equilibria. Alternative retail payment architectures may have potentially relatively similar social welfare performances, but vastly different implications on different industry stakeholders. The specificities of the retail payment industry accentuate the incentives to influence public opinion and lawmakers, including through "alternative" narratives. The public discourse on retail payment architecture will be confusing for several reasons: (i) technical complexity of retail payment architectures for non-experts; (ii) expertise concentrated with those having vested interests and who will thus always provide biased explanations and opinion; (iii) significant financial fire power of successful incumbent firms to promote their narratives; (iv) incentives to promote projects "out of the money" with exaggerated arguments, while truly promising projects may be kept secret for long; (v) long deployment times and uncertainty on ultimate implementation and use. We discuss the various perspectives of key retail payment industry stakeholders. For each, we identify their main interest, key preferred and feared narratives. We discuss in more depth specific issues relating to the current discourse around retail CBDC. We draw lessons from a public policy perspective.

Suggested Citation

  • Bindseil, Ulrich, 2026. "Public discourse on retail payments and the case of CBDC," SAFE Working Paper Series 474, Leibniz Institute for Financial Research SAFE.
    • Handle: RePEc:zbw:safewp:339999
    DOI: 10.2139/ssrn.6422438
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Systems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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