Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/339999 
Year of Publication: 
2026
Series/Report no.: 
SAFE Working Paper No. 474
Publisher: 
Leibniz Institute for Financial Research SAFE, Frankfurt a. M.
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.
Subjects: 
Monetary architecture
means of payment
network industries
public discourse
vested interests
central bank money
JEL: 
E42
E58
G21
G23
G28
L11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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