6. Price it right
People are very stubborn when it comes to their payment habits.2 Convincing them to use a new payment method is tricky. Ideally, there should be technological incentives such as ease of use, faster payments, and convenience compared with existing alternatives – as well as financial incentives, like the fact that the fees for CBDC usage are more engaging than for other (digital) payment methods. The appropriate fee structure should be taken into account by the central bank as a crucial instrument to influence the audience’s decision regarding CBDC use.
7. Integrate the private financial sector
Commercial banks, mobile money operators, special deposit-taking institutions, and other non-bank financial institutions play a crucial role in the CBDC ecosystem. On the one hand, they are an integral part of the “two-tier” CBDC architecture as service providers. On the other, they can increase user uptake by making CBDCs more attractive through their value-added services, which are offered on top of the core CBDC infrastructure.
However, clear incentives are necessary for them to participate. The basis for these incentives is an efficient business model that solves real market needs, as well as a fee model that benefits players in the private sector.
8. Involve the merchants
Prior experience in payments shows that successful adoption of CBDC largely depends on universal acceptance by merchants. Consumer adoption is crucial, but it is clear that even the most committed user will be frustrated by poor acceptance of a payment method. In this context, it is key to make the merchants feel that adding CBDCs to their existing payment landscape would be beneficial to them. Intermediaries will also play a key role in merchant acquisition by bringing their existing merchant networks to CBDC acceptance. Also, the legal tender status might be important to drive adoption by smaller merchants.