The authors of a recent IMF working paper, based on a study of the declining use of cash for payments relative to payment cards and e-money in 24 of 25 countries studied, concluded that the main impact of the introduction of a retail central bank digital currency (CBDC) will be on the usage of cash substitutes. They assume that central banks will likely design their CBDCs to largely match user and merchant benefits associated cards use in terms of convenience, speed of payment, fraud control, and other desirable payment attributes, and then run through the additional incentives that may be required for their adoption and use.
These might include zero fees to both users and merchants, and making payments immediately final and available in receivers' bank deposit accounts. However, card schemes may fight back by reducing interchange fees and providing merchants immediate access to card sale revenues and make up the revenue loss elsewhere. Also, card firms that own and supply fast payment services may choose to rely on these newer payment services going forward, providing zero-cost person-to-person mobile payments, as well as person-to-business point of sale transactions and business-to-business invoice payments, with fees paid for by the receiver.
