Paper: Competition, Innovation, and Implications in Retail Payments

"Appropriate pricing arrangements for payment instruments are a complex matter, since payment networks are subject to large economies of scale and give rise to strong usage and network externalities," notes Wilko Bolt in a new working paper published by the Netherlands Bank.

"Although payment competition may significantly reduce the total price paid by consumers and merchants, it need not improve economic efficiency," he argues.

"Ultimately, the central issue concerns whether the specific