Daily Review: Singapore is Winning the March Towards Digital Economy

October 18, 2017     By : Elena Mesropyan

Which cities and governments are ahead of the world in adopting digital money, and why is it important? Today’s top picks offer comprehensive answers.

Cashless Cities: Realizing the Benefits of Digital Payments

Cities account for a large proportion of the global population and its economic activity. Today, over half of the world’s population lives in cities. By 2050, this number will increase to two-thirds. Currently, over 80% of global economic activity takes place in cities and it is expected that the vast majority of future economic growth will come from cities.

A study by Visa estimates that among other benefits, increasing digital payments across the 100 cities could result in total direct net benefits of $470 billion per year.

Singapore is Winning the March Towards Digital Economy [Curated Content]

Source: Cashless Cities: Realizing the Benefits of Digital Payments, Visa

The study found that consumers across the 100 cities currently spend an average of 32 hours a year on cash-related payment activities. Greater adoption of digital payments is estimated to reduce this figure to 24 hours a year. When other benefits of digital payments are taken into account, such as reduction in cash-related crime, these savings could increase to $278 million per city, equivalent to about $67 per adult per year.

Accepting cash and checks costs businesses about 7% of every dollar received compared to 5% for every dollar collected from digital sources. A study projects that when combining savings with increased sales from digital payments usage, the total net benefits to businesses across all 100 cities could amount to over $312 billion per year after transitioning to an achievable level of cashless activity.

Average annual savings to governments in direct administrative expenditures by making greater use of digital payments amount to $710 million. A reduction in cash-related crime could save an additional $53 million per year. Meanwhile, the estimated potential increase in tax revenue from digital payment adoption amounts to an average of $534 million per year.

Read more.

The March Towards Digital Money (Digital Money Index 2017)

As made apparent by the previous study, the adoption of digital money has tangible benefits for governments, businesses and consumers alike. To understand these opportunities, Citi and Imperial College London developed a Digital Money Index.

Singapore is Winning the March Towards Digital Economy [Curated Content]

Source: Digital Money Index 2017, Citibank

Singapore is Winning the March Towards Digital Economy [Curated Content]

Source: Digital Money Index 2017, Citibank

The report called “The March Towards Digital Money: Bringing the Underbanked in From the Cold” emphasizes that digital money adoption can transform economies. It can make payments faster, cheaper, safer and more transparent. Digital Money can create opportunities for greater economic participation and more efficient commerce. It matters in principle, and it matters in practice. A 10% increase in digital money adoption would allow 220 million people to enter the formal financial sector. It can combat corruption and make flows of money more transparent – including $1 trillion of new flows in the formal economy. And it can increase tax revenues, potentially by as much as $100 billion.

Read more.

Venmo Now Accepted at Millions of Retailers

In a major step forward in the evolution of Venmo, PayPal announced that starting this week, Venmo customers can use their Venmo account to shop and make purchases on their mobile phone at more than 2 million US retailers, almost everywhere PayPal is accepted.

“The investments we’ve made in our platform architecture allow us to enable Venmo as a payment method for millions of PayPal merchants at one time without any additional integration work on the merchant’s part, mirroring the approach we used to successfully launch One Touch.

“We’re also expanding the ways that merchants can accept Venmo on the Braintree platform with the introduction of mobile web payment support. Now, Braintree merchants can offer Venmo as a payment option both in-app and on mobile web. And as part of our continuous innovation, we’re testing the ability for merchants to offer dynamically-painted payment buttons, which will show Venmo customers a custom dual-branded button that allows selection between PayPal or Venmo payment options.”

Read more.

*Note: Featured image for this article was sourced from the report Cashless Cities: Realizing the Benefits of Digital Payments by Visa.

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Elena Mesropyan
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Elena Mesropyan

Global Head of Content at Let's Talk Payments
Elena is a research professional with a background in social sciences and extensive experience in consumer behavior studies and marketing analytics. She is passionate about technologies enabling financial inclusion for underprivileged and vulnerable groups of the population around the world.
Elena Mesropyan
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