Higher usage of electronic payment products, including credit, debit and pre-paid cards, helped to contribute to a creation of more than 13,000 jobs in Singapore between 2011 and 2015 due to an increase in the country’s consumption. Electronic payments also contributed a total of S$1.7 billion to the gross domestic product (GDP), according to a newly released Moody’s Analytics Study.
The global study analysed 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$296 billion to GDP, while raising household consumption of goods and services by an average of 0.18 percent a 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 3,800) 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 cheques to electronic payments will have a greater impact on the rapidly expanding eCommerce and mobile payments landscape in Singapore and this will continue 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 study. 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 bank partners, merchants and industry stakeholders to expand opportunities for mobile payments and to support local business growth,” Ms Tyng said.