Costs of payment instruments on the Polish market
Information of Narodowy Bank Polski concerning the survey on the costs of payment instruments on the Polish market
In the years 2015-2018, Narodowy Bank Polski carried out a research project in the scope of the costs of payment instruments on the Polish market. The aim of the survey was to estimate the social and private costs of retail payments incurred in 2015 by individual parties of the payment chain on the Polish market in connection with the use of the most important payment instruments. Social costs are the total costs related to the operation of payment instruments incurred by all participants in the payment chain, excluding fees and commissions incurred for the benefit of other participants in the payment chain. Private costs are the total costs incurred by a particular participant covered by the survey, including fees and commissions incurred by that participant for the benefit of other entities. From the point of view of the economy and the society as a whole, the most significant are the social costs of payment instruments, which do not include the costs that are simultaneously revenues of other participants in the payment chain.
The research project covered the following groups of payment system participants: the central bank, banks, payment infrastructure providers, retailers, companies transporting and handling cash (so-called CIT companies) and consumers. On the other hand, the subject matter of the project covered both traditional and innovative payment instruments: cash, prepaid cards, debit cards, credit/charge cards, mobile payments, credit transfers and direct debits. Under the NBP research project, data were collected for 2015, which at the same time was considered the base year for the above mentioned survey. As in the case of the survey of the costs of payment instruments conducted in the years 2009-2012 under the leadership of the European Central Bank, in which 13 European Union member states took part, in order to estimate costs of payments on the part of banks and payment infrastructure providers in the Polish project, the Activity Based Costing Method (ABC) was used.
The total social costs of retail payments in Poland were estimated at 1.34% of GDP, i.e. PLN 24.1 billion (if the study covered the seigniorage, these costs would amount to PLN 21.7 billion). For cash, the ratio of total social costs (in the amount of PLN 17.6 billion) to GDP was the highest and amounted to 0.98% (if the seigniorage was taken into account, these values would amount to PLN 15.2 billion and 0.84%). Such a level of this ratio resulted from the dominant share of the number of cash transactions in the total number of payments in Poland (69%). The ratio of social costs for debit payment cards to GDP was five times lower than for cash and amounted to 0.21% of GDP (PLN 3.7 billion). On the other hand, the social costs of a bank transfer amounted to only 0.1% of GDP (PLN 1.8 billion). The costs of other instruments (credit cards, direct debit, mobile payments and other) accounted for a small percentage of Poland's GDP (in total, 0.05% of GDP, i.e. PLN 1.0 billion).
The average unit social cost of a transaction with the use of a payment instrument in Poland amounted to PLN 1.41. The least expensive payment instrument in this respect was credit transfer (PLN 0.74), which indicates the effectiveness of clearing systems in Poland (in the ECB survey, a transfer was one of the more expensive payment instruments). The second cheapest payment method in Poland, in terms of unit costs, was cash, whose unit social cost amounted to PLN 1.49 (if the seigniorage was included in the survey, this cost would be lower - PLN 1.29). The social cost of debit cards was slightly higher, since it was estimated at PLN 1.67 per transaction, while credit cards were more expensive (PLN 2.24 per transaction). The payment methods used to a limited extent in our country were the most expensive, i.e. direct debit and mobile payments, which were only gaining popularity in 2015. High costs for innovative payment methods, such as mobile and instant payments, are likely to be reduced if a given solution becomes more widespread among consumers.
The highest share of social costs of payments in Poland was borne by banks (49%), followed by retailers (34%). The share of payment infrastructure providers was also noticeable (7%). A less significant share was estimated for consumers (5.34%), the central bank (2.35%) and cash-in-transit companies (2.29%).
At this point, it should also be emphasised that the survey covered 2015. Since then, the total number of transactions and the structure of transactions performed using individual payment instruments have changed, which would also translate into a change in the level of costs. NBP plans repeating the survey for a later base year, which would allow to understand the directions of the payment system development in the area of payment costs, including the development of payment innovations and the impact of legal regulations on this market. Moreover, supplementing of the scope of the former survey with an analysis of fixed and variable costs is planned, which would enable the estimation of changes in the level of the overall social costs of payments, assuming a potential increase or decrease in the number of transactions by means of specific payment instruments.
It is worth stressing that in addition to security, speed, convenience, anonymity or the universality of possession and acceptance, cost is only one of the factors in the choice of payment instrument for making or accepting retail payments and this choice should be left to the discretion of consumers or companies.