The Bank for International Settlements published a working paper reviewing how fast payment systems (FPS) are priced and modelling how different pricing schemes affect participation, adoption and welfare, with a focus on person-to-merchant (P2M) payments. Using a two-sided market framework alongside a practical survey of global practices, the paper concludes that fast payment usage can be lower than socially optimal under many pricing approaches currently used in practice and that fully zero-fee models are not sustainable without external subsidies or alternative revenue streams for participants. The paper organises FPS pricing into three levels: system-level pricing between FPS owners and participants, participant-level pricing among payment service providers (PSPs), and end user pricing between PSPs and customers. It documents wide cross-country variation, including systems such as Türkiye and Brazil that avoid joining or fixed participant fees to encourage adoption, versus systems such as Australia and the United Kingdom that use a mix of fee types; at the end-user level, individuals often face free or low-cost transactions in jurisdictions including Brazil, Malaysia and Thailand, while merchant fees may be market-based or regulated in jurisdictions including Türkiye, India and Mexico.
Bank for International Settlements 2025-10-06
Bank for International Settlements analyses fast payment pricing and finds many fee models underdeliver on socially optimal usage
The Bank for International Settlements released a working paper analyzing fast payment systems (FPS) pricing and its impact on participation, adoption, and welfare, especially in person-to-merchant payments. The study highlights that current pricing models often result in suboptimal usage and that zero-fee models require external subsidies or alternative revenue streams. It also notes significant cross-country variations in FPS pricing structures, with examples from Türkiye, Brazil, Australia, and the United Kingdom.