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Public vs. private payment platforms : market impacts and optimal policy / Youming Liu, Edona Reshidi, Francisco Rivadeneyra.FB3-5/2026-10E-PDF

"We study competition between a welfare-maximizing public platform and a profit maximizing private platform in a two-sided payment market. We characterize the public platform’s optimal pricing and show that it balances the benefits of increased competition against the welfare costs of network fragmentation. While introducinga public platform generally raises aggregate welfare and financial inclusion, the competing private platform may respond by raising its fees, disadvantaging merchants that continue to accept payments from the private platform. Finally, we show that cost-recovery and zero-fee mandates constrain public pricing, making welfare improvements uncertain and conditional on network effects, user switching behavior, and the degree of platform differentiation"--Abstract.

Permanent link to this Catalogue record:
publications.gc.ca/pub?id=9.962253&sl=0

Publication information
Department/Agency
  • Bank of Canada, issuing body.
TitlePublic vs. private payment platforms : market impacts and optimal policy / Youming Liu, Edona Reshidi, Francisco Rivadeneyra.
Series title
  • Staff working paper = Document de travail du personnel, 1701-9397 ; 2026-10
Publication typeMonograph - View Master Record
Language[English]
FormatDigital text
Electronic document
Note(s)
  • Cover title.
  • Includes bibliographical references (pages 27-28).
Publishing information
  • [Ottawa] : Bank of Canada = Banque du Canada, March 10, 2026.
  • ©2026
Author / Contributor
  • Liu, Youming, author.
Description1 online resource (45 pages).
Catalogue number
  • FB3-5/2026-10E-PDF
Subject terms
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