Use of electronic payments leads to more than 13,000 jobs being created in Singapore over a five-year period
Moody’s Analytics estimates that electronic payments contributed a total of S$1.7 billion to Singapore’s GDP between 2011 and 2015
Singapore - Higher usage of electronic payment products, including credit, debit and pre-paid cards, leads to more than 13,000 jobs being created due to boost in consumption in Singapore between 2011 and 20151. Electronic payments also contributed a total of S$1.7 billion to the Republic’s gross domestic product (GDP), according to a newly released Moody’s Analytics Study2.
The global study, conducted by Moody’s on behalf of Visa, analyzed the impact of electronic payments on economic growth across 70 countries, including Singapore, over a five-year period. The Study found that the increased use of electronic payment products, including credit, debit and prepaid cards, added US$296B to GDP, while raising household consumption of goods and services by an average of 0.18 percent per year. In addition, Moody’s economists estimate that 2.6 million new jobs were created on average each year as a result of the increased use of electronic payments. The 70 countries make up almost 95 percent of global GDP.
The proliferation of electronic payments, particularly credit card penetration, has been shown to spur greater consumption of goods and services in Singapore. According to the Study, consumption in Singapore was 0.986 percent higher between 2011 and 2015 than it would have been if the use of electronic payments such as payment cards and card-on-file services had not grown. In addition, total consumption increased on average by 0.27 percent over the sample period.
With electronic payments increasingly acknowledged as being both secure and convenient, consumers in Singapore have become more comfortable using cards and other electronic payment methods to make purchases, payments and transfers. The overall boost in transactions led to an additional S$1.7 billion to Singapore’s GDP between 2011 and 2015, and the Republic experienced a subsequent bump in employment by 13,500 new jobs (an annual average increase of 3800) to accommodate the additional demand for goods and services created through use of electronic payments in the economy.
“The increase in job opportunities and overall economic growth attributed to the adoption of electronic payments shows the economic value that electronic payments bring to the financial and economic ecosystem - from individuals to businesses and governments. The shift from cash and checks to electronic payments will have a greater impact on the rapidly expanding eCommerce landscape in Singapore. As more consumers transact online, we expect the shift to electronic payment channels to impact the economy positively,” said Ms Ooi Huey Tyng, Country Manager for Visa Singapore and Brunei.
Mobile Payments Contribute to Even Greater GDP Growth
The impact of mobile phone payments was not included in the current study3. However, Moody’s estimates that the widespread use of mobile payments in markets such as Singapore may lead to an even greater positive impact on GDP than traditional electronic payment channels alone. The increased adoption of mobile payments is expected to further spur economic growth, reduce the negative impact of the un-taxed “grey economy” and support further job creation based on higher rates of eCommerce and digital transactions.
“The increasing penetration of mobile payments, digital peer-to-peer transfers and contactless payments increases overall consumer consumption as it provides Singaporeans with additional convenience and security over cash. We look forward to working with more merchants and industry stakeholders to expand opportunities for mobile payments and to support local business growth,” Ms Tyng said.
1 To measure the impact of card usage on GDP, the consumption figure was multiplied by the portion of GDP that is represented by consumer spending in each country. The model can therefore estimate the impact of card usage on the overall economy.
2 Moody’s Analytics Study, “The Impact of Electronic Payments on Economic Growth” looked at the impact of card penetration on the private consumption of 70 countries over five years between 2011 and 2015.
3 Moody’s Analytics Study, “The Impact of Electronic Payments on Economic Growth” looked at the impact of card penetration on the private consumption of 70 countries over five years between 2011 and 2015.
Visa Inc. (NYSE: V) is a global payments technology company that connects consumers, businesses, financial institutions, and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world's most advanced processing networks — VisaNet — that is capable of handling more than 65,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit, or set rates and fees for consumers. Visa's innovations; however, enable its financial institution customers to offer consumers more choices: pay now with debit, pay ahead of time with prepaid or pay later with credit products. For more information, visit www.visa.com.sg