Study links e-payments and economic growth in Asia Pacific

Boosting online retail sales automatically stimulates a country’s economy. In the Asia Pacific region, in particular, a one percent increase in online retail sales translates to at least 0.1 percent growth in Gross Domestic Product (GDP), according to a recent study.

“This is a substantial finding for e-commerce through the region and payments in general, with huge future growth opportunities for APEC economies,” says Peter Lovelock, Telecommunications Research Project Corporate (TRPC) Director, who oversaw the development of the study.

Specifically, the study assessed the levels of readiness of each APEC economy to engage in, adopt and reap the broad range of economic and social benefits that epayments (including mobilepayments) hold, by creating an APEC E-payments Index.

In the rankings, the US ranked first overall in e-payments readiness, a result which will surprise many, with Singapore coming second, followed by New Zealand, Australia, and Canada in fifth place.

Notably, Japan only came eighth overall, slightly ahead of Malaysia who demonstrated strong results to come in at tenth position.

The Philippines came in as number 17 in the list of 21 APEC countries ranked in the e-payment index.

The country was also number 17 in terms of regulatory policy and environment, as well as infrastructure, number 18 in terms of demand and number 16 in terms of innovative products and services.

Lead author, Yoonee Jeong, noted that the “US’s strong showing is attributable to the innovation culture there, illustrated recently with the IPO of Square.”

Indeed, the readiness of APEC economies to adopt and use e-payments varies widely.

“Overall, the United States comes out as best positioned to benefit from the ongoing development of e-payments but many economies in transition are making huge gains,” explained Dr. Lovelock.

Nevertheless, “These rankings can be expected to change radically over the coming years,” he added.

APEC is becoming mobile fast, and growth is being led by smartphone savvy economies.

“What is really exciting is that many of the APEC economies leading the mobile revolution are the developing economies rather than the high-income ones,” maintained Margot Kilgour of the Australian APEC Study Center at the Royal Melbourne Institute of Technology (RMIT) University.