Innovations in retail payments

Over the past decade, many innovations in retail payments have emerged. These may affect the retail payment market – for example, by influencing users in their choice of payment instruments and by significantly reshaping the payment processes. Innovations can potentially cut processing costs and increase social welfare. For central banks, however, they also raise policy issues, as they have implications for the soundness and effectiveness
of the retail payment system.

To gain an overview of innovative retail payment activities in the CPSS and several other countries, a fact-finding exercise was conducted that attempted to cover influential developments in retail payment instruments and schemes over the past decade. In all, some 122 innovations were reported by 30 central banks. The fact-finding did not aim for a comprehensive coverage of all retail payment innovations in the respective countries, but rather for a good overview that can serve as a basis for assessing the current status of retail payment innovations.

The innovation in retail payments report identifies five product categories: (i) innovation in the use of card payments; (ii) internet payments; (iii) mobile payments; (iv) electronic bill presentment and payments; and (v) improvements in infrastructure and security.