Increased use of digital payments could result in a potential annual economic benefit of US$72 million in Da Nang
Visa, the world’s leader in digital payments, has announced the increased use of digital payments has the potential to add US$72 million to Da Nang’s economy annually1. These findings are based on the results of an independent study “Cashless Cities: Realizing the Benefits of Digital Payments”, conducted by Roubini ThoughtLab and commissioned by Visa examining the economic impact of increasing the use of digital payments in major cities around the world.
These findings were presented at the Smart City Summit 2019 in Da Nang, which also saw presentations by representatives from Da Nang People's Committee, Vietnam Software and IT Services Association, Ministry of Science and Technology, Ministry of Information and Communications. The Smart City concept is one in which metropolitan areas use a variety of technologies and data collection methods in order to improve the administration of the city, and accordingly benefit the lives of citizens. It often focuses on developing more efficient ways of delivering services and running infrastructure.
According to Visa’s research converting the Da Nang economy to an “achievable level of cashlessness” - defined as the entire population of a city moving to digital payment usage equal to the top 10% of users in that city today - could improve job creation by 3 percent, productivity by 3.4 percent, wages by 3.1 percent, and GDP growth by 0.34 percent2.
At the summit, Madame Dang Tuyet Dung, Visa Country Manager for Vietnam and Laos, discussed how part of Da Nang’s cashless evolution could be led through e-government initiatives, such as disbursing welfare benefits and income tax returns electronically, paying for travel of government officials via electronic means, and paying taxes and utility fees online.
“Da Nang has earned a reputation as a hive of technological innovation, particularly with the establishment of the Da Nang IT Park earlier this year, and we commend the city’s officials in having such foresight in this area. Smart City Summit 2019 is another way in which Da Nang is moving into the future, and at Visa, we’re excited to be able to play a role in helping to bring this vision into fruition. Through greater integration of electronic payments into both the public and private sectors, many aspects of day-to-day life for citizens can be simplified or improved, while the government itself can more effectively manage the economy,” said Madame Dung.
Card ownership is on the rise in Vietnam, with more citizens entering the formal banking ecosystem3. Findings from Visa’s Consumer Payment Attitudes Study 2018 suggest this trend is set to continue with nearly two thirds of Vietnamese consumers indicating that they expect to increase their use of digital payments in the next year4.
1 World Bank Global Findex; Cashless Cities: Realizing the Benefits of Digital Payments. (2017). Roubini ThoughtLab. Accessed from www.visa.com/cashlesscities
2 World Bank Global Findex; Cashless Cities: Realizing the Benefits of Digital Payments. (2017). Roubini ThoughtLab. Accessed from www.visa.com/cashlesscities
4 The Visa Consumer Payment Attitudes Study 2018 was conducted by Intuit Research on behalf of Visa in August 2018. The research was conducted amongst 4,000 consumers in Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, Myanmar, and Cambodia.
Roubini Thoughtlab, a leading economics and evidence-based research firm, surveyed 3,000 consumers and 900 businesses in 2016 across six cities (Tokyo, Chicago, Stockholm, Sao Paolo, Bangkok and Lagos) that represent different levels of digital payments maturity. These surveys examined the use, acceptance, and cost-benefit impact of physical and digital money. Researchers then extrapolated these survey results based on specific demographic and economic data to another 94 cities around the world to determine the net impact of moving toward a cashless economy on consumers and businesses in each location. Through other sources, the research was also able to identify expected impacts on government. Researchers used World Bank, Organisation for Economic Co-operation and Development, and other well-respected secondary data sources to augment the survey results and build the overall findings. An econometric model used by various central banks and other institutions – the National Institute Global Econometric Model (NiGEM) – was used to estimate the “catalytic” impacts (economic growth, productivity, employment and wages) that a move toward digital payments would have on each of the 100 cities analyzed. Visa commissioned the study. Roubini Thoughtlab independently conducted the surveys, managed the research and developed the analysis. Visit: www.visa.com/cashlesscities
About Visa Inc.
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network - enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of connected commerce on any device, and a driving force behind the dream of a cashless future for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit About Visa, visa.com/blog and @VisaNews.