Asia Pacific is the largest region globally by card payment value and is projected to gain share going forward. Payment policy is playing an increasing role in driving the rate at which consumer payments are transitioning to paper alternatives. This report analyses key policy developments in the region and evaluates their effectiveness in achieving their stated goals. The final section analyses the policy implications and how they relate to the forecast for the region.
The development of electronic payment platforms is rapidly accelerating globally. By allowing non-traditional payment companies to develop money transfer platforms, more options have become available to consumers throughout the region.
The need to inform consumers of the risks of excessive credit borrowing are essential to reduce skepticism certain consumer segments may have towards paper payment alternatives. Providing additional security for these consumers can increase the likelihood of making the transition.
The initial cost of card or electronic payment infrastructure can be enough to discourage merchant acceptance. Providing a degree of financial support, education or limits on the acceptance costs can drive initial acceptance.
Taking currency out of circulation or mandating acceptance might accomplish the short-term objectives of a government, but could have long-term impacts that lead to a reversal of policy or create widespread consumer discontent that ultimately undermines the policy. Developing a balanced approach that includes significant time for implementation has proven more effective.
Security of card and electronic payments is a fundamental way of getting consumers on board for transition. Investing in communicating the security of the payment channel greatly increases the potential for success.
Increasing the cost of paper payments can accelerate the transition, but can anger consumers. Providing incentives for alternatives is more effective, and allows consumers to readily identify a monetary benefit to switching.
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