Residents, businesses and the public sector in Bangkok could realise 126 billion baht worth of economic benefits by transitioning from physical money to digital payments, says a report released by Visa.
Widespread use of electronic payment in Bangkok could generate an estimated increase of 126 billion baht for the city's economy, with consumers, businesses and government seeing net benefits of 3 billion, 73 billion and 50 billion baht respectively, according to the report conducted by Roubini ThoughtLab and commissioned by Visa.
The report examined the economic impact of increasing the use of digital payments in major cities around the world.
As a "digitally transitioning" city, Bangkok was among six global metropolises selected for the study, representing one of the five different stages of digital payment maturity.
"As more people move from rural to urban areas, cities become the nexus for the adoption of electronic payments," said Suripong Tantiyanon, country manager of Visa Thailand. "The research shows that a shift to electronic payments will benefit people, businesses and government, not just in big cities like Bangkok, but other urban centres such as Phuket and Khon Kaen."
Estimated net benefits are derived from factors including time savings while conducting and processing banking, retail and transit transactions; increased sales revenue from extended customer base both online and in-store; increased tax revenue and economic growth; cost savings; and reduced cash-related crime, among others.
"There are many existing and emerging technologies in payment that will drive wider adoption of electronic payments," Mr Suripong said. "In cities like Bangkok, we will see new payment forms such as standardised QR Code go beyond being just money transfer tools and mainstream methods such as debit chip cards becoming widely used and accepted, giving consumers and businesses a choice in how to pay and get paid."
By reducing reliance on cash, the study estimated the immediate and long-term benefits for three main groups -- consumers, businesses and governments.
According to the study, these benefits could add up to combined direct net benefits of US$470 billion (15.3 trillion baht) or equivalent to 3% of the average GDP of the 100 cities that were analysed.
As cities increase use of digital payments, the positive impacts can extend beyond financial benefits to consumers, businesses and government. The shift to digital payments may also have a catalytic effect on the city's overall economic performance, including GDP, employment, wages and productivity growth.
"The use of digital technologies -- from smart phones and wearables to artificial intelligence and driverless cars -- is rapidly transforming how city dwellers shop, travel, and live," said Lou Celi, head of Roubini ThoughtLab. "Without a firm foundation in electronic payments, cities will not be able to fully capture their digital future, according to our analysis."
The report also recommended that policymakers introduce financial literacy programmes and incentives for scaling new payment technologies.
