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 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.