Public discourse on retail payments and the case of CBDC

Ulrich Bindseil

No 474, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

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.

Keywords: Monetary architecture; means of payment; network industries; public discourse; vested interests; central bank money (search for similar items in EconPapers)
JEL-codes: E42 E58 G21 G23 G28 L11 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-cba, nep-fdg, nep-mon, nep-pay and nep-ppm
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:339999

DOI: 10.2139/ssrn.6422438

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