E-payments hold a broad range of promises for individuals, communities and economies at large. Adaptation to digital transactions is already having a transformative impact on societies through a lowering of transaction costs, particularly for SMEs, and thereby adding to productivity, economic growth and social benefits. Constraining transaction flows, through restrictions on access to epayments – whether intentional or not – can be shown to dampen economic growth, social equity and equality, and innovation. However, this study finds that Asia Pacific Economic Cooperation (APEC1) economies’ level of advancement and experience in the development of an e-payment ecosystem varies widely. Realising the full potential of e-payments will require more flexible regulatory and business climates along with coordinated and sustained efforts from governments, the private sector and the international development community to foster adoption.
This study set out to illustrate the linkages between e-payment penetration and economic growth, canvassing where barriers exists for each APEC economy. To estimate the macro-economic impact of open access to electronic payments on APEC economies, a proof-of-concept exercise was conducted at the outset of the study. Using sample data from six APEC economies, the study found that a 1% change in online retail sales is associated with at least a 0.175% growth in Gross Domestic Product (GDP) per capita among these six APEC economies. This is a substantive finding and calls for a follow up and more substantive and empirically based survey of e-payments access and opportunities across APEC economies.
Next, an APEC E-payment Index, comprising four pillars and 44 indicators, was constructed to gauge the readiness and capacity of each of the 21 APEC economies to engage in e-payment (including both e-payment and m-payment services), and to further develop their overall e-payment ecosystem. Building from this Index the study also uses a series of case studies of selected economies – Australia, Indonesia, Hong Kong China, and the Philippines – to illustrate key contributing factors to the prospects for e-payment adoption and development.