Visa and CBC launch new paper on e-payment benefits for governments

According to the paper, the electronic payments revolution that transformed consumer spending in many countries and boosted the global economy can be expanded to provide significant benefits in developed and developing countries around the world and draw two billion unbanked citizens into mainstream financial services. The paper, entitled Payment Solutions for Modernising Economies, highlights key ways in which the move from cash to electronic payments can generate major returns to governments and their citizens, and it offers a primer on how to address infrastructure and institutional challenges. With a unique collection of real-world examples, the paper documents how governments can reduce costs, stimulate economic growth and strengthen local banking systems. A Blueprint for Governments The paper makes several important new contributions to public understanding of financial services and development. The paper advances an essential argument in the debate about driving economic modernisation and bridging digital divide issues: governments can deploy tailored electronic payment initiatives for specific stakeholders or geographies, allowing infrastructure, education and adoption issues to be resolved in targeted and cost-effective ways, with maximum return. To make this case, the paper clarifies the components of electronic payment systems from the point of view of international payment networks. It then reviews findings from a growing body of literature that attempt to quantify the substantial economic impact of card-based and other electronic payment systems. The paper goes on to outline specific strategies that governments can use to extend payments infrastructure domestically and update public institutions to balance the needs of all stakeholders and provide proper public oversight. An entire section covers specific examples of innovation in action, and the paper offers a checklist-style guide to move from concept to execution. Innovation in Action The paper and a library of case studies of innovation in action are available at www.visa.com/modernisation. There are five categories of emerging examples that they detail: § Generating government efficiency. Governments are often the single largest purchaser of goods and services in their economies and represent some US$10 trillion in payments per year worldwide. The paper shows several examples of how governments are driving savings in their travel and procurement, as well as improving collection of taxes and fees, by turning to international payments networks. § Banking the unbanked. Governments can play a direct role in bringing the safety, convenience and efficiency of electronic payment to the more than two billion unbanked individuals worldwide that form the so-called bottom of the pyramid. The paper shows how governments are using electronic payment systems in conjunction with distribution of payrolls, pensions and public assistance benefits to retain funds in the banking system, reduce informal economies and allow more citizens access to basic financial services. § Enabling cross-border remittances. The paper outlines new technologies that can create secure, cost-effective channels for the transfer of worker and other person-to-person remittances, estimated at US$93 billion to US$150 billion or more. Cross-border remittances can be costly, and they pose a challenge to unbanked individuals. Many recipients, for instance, need to travel long distances to queue at a cashier and then must protect themselv