Will Payment Innovations Disrupt Banking? Lessons from Prepaid Cards by Paul Pichler

Join us for this week's Macroeconomics Research Seminar, Summer Term 2026.

Paul Pichler, from the University of Vienna, will present this week's Macroeconomics seminar on Will Payment Innovations Disrupt Banking? Lessons from Prepaid Cards.

Abstract

Payment innovations such as e-money wallets, stablecoins, and central bank digital currencies reshape how households transact and store liquid wealth, with implications for bank funding. We develop a model of payment instrument adoption and portfolio choice under a liquidity-in-advance constraint in which cash, bank deposits, and e-money provide transaction services. Our structure separates substitution between cash and digital payments from substitution within the set of digital instruments. Using the ECB’s SPACE payment diaries, we estimate both elasticities and find moderate cash-to-digital substitution but systematically higher substitution within the digital space. These estimates map into a structural deposit crowding-out parameter estimable from micro data. We then use Italian evidence on multipurpose prepaid cards, including portfolio information from the Italian Survey on Household Income and Wealth (SHIW), to benchmark demand for a digital-euro-like instrument and quantify crowding-out under alternative design choices

This seminar will be held on campus in 5B.307 at 1.30pm on Tuesday, 19 May 2026. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Macroeconomics Research Seminar Series.