Retail payments in selected countries: a comparative study

September 1999


This report has been produced by the Working Group on Retail Payment Systems on behalf of the Committee on Payment and Settlement Systems (CPPS) of the central banks of the Group of Ten countries. The aim of the report is to contribute to a better understanding of retail payment systems across the G10 countries and Australia. It focuses on end-user markets and discusses the technological and economic aspects of retail payment instruments.

A fundamental finding of the report is that retail payment instruments are diverse, both within and between the countries studied. The diverse nature of the transaction types, counterparties and payment volumes and values has given rise to several different payment instruments. While all the countries selected use all the non-cash retail payment instruments to some extent, they fall into one of two groups that rely heavily on a particular class of non-cash instrument: many European countries and Japan rely mostly on credit transfers, while Australia, the United States, Canada and a few European countries depend heavily on cheque payments.

The most significant trends in retail payments common to the selected countries are: the continued primacy of cash (in volume terms) for face-to-face payments, despite a long-standing movement towards non-cash payments; growth in payment cards, primarily for face-to-face payments, and increased use of direct funds transfers, especially direct debit transfers, for remote payments; and substantial changes in the market arrangements for providing and pricing the retail payment instruments and services delivered to end-users.

Retail payments in the selected countries are experiencing an increased pace of experimentation and innovation. Although the most recently emerging payment technology and its specific applications have not yet been adopted as core payment methods, research, development and market experimentation continue. At the same time more traditional forms of payment instruments, technology and banking arrangements are evolving. Over the long term some of these market developments may well alter traditional payment practices and contribute to increased efficiency and convenience in retail payment systems.

Mr Lo Faso and the members of the Working Group are to be commended for the analysis which they have carried out. Valuable assistance was provided by the BIS in editing and publishing the report.

Wendelin Hartmann, Chairman  
Committee on Payment and Settlement Systems  
Member of the Directorate of the Deutsche Bundesbank