Auckland among top nine cities for digital payments leadership
Visa, the global payments technology company, has revealed the results of a new global study examining the economic impact of digital payments, with Auckland potentially standing to gain nearly NZD$2 billion annually in total direct net benefits, by further reducing reliance on cash.
Cashless Cities (‘the Study’) was commissioned by Visa and conducted by Roubini Thoughtlab. It quantifies the potential net benefits of a further move to digital payments for businesses, consumers and governments. Of the 100 cities studied, Auckland is among only nine considered ‘Digital Leaders’ – a description given to the cities with populations that are nearly fully banked, have developed banking and digital payments systems, and are already among the world leaders in digital payments usage and infrastructure readiness. Sydney, Canberra, London, Toronto, and Stockholm are among the other cities considered digital leaders.
Visa Country Manager for New Zealand & South Pacific Marty Kerr said: “It’s exciting to see Auckland is among the top cities globally that are leading the way in digital payments. As a country we are fortunate in having many of the attributes necessary to be advanced in this space, such as a strong and inclusive banking system, and New Zealanders have long been early adopters of technology”.
The Study found:
- Businesses in Auckland could achieve over NZD$1.5 billion in direct net benefits per year, from factors including time savings in payments and increased sales revenues stemming from an extended customer base, both online and in-store.
- Consumers in Auckland could achieve over NZD$150 million per year, in estimated direct net benefits from factors including time savings from direct banking and retail and transit transactions. Globally, consumers on average stand to gain a full working day (8 hours) in time back per year on average in the move to digital payments.
- Government stands to achieve over NZD$270 million in direct benefits per year, from various factors that include increased tax revenues, increased economic growth, and cost savings from efficiencies. Governments also stand to benefit indirectly through greater employment and wage growth.
The Study comes at a time when there is real momentum among consumers to use innovative technologies such as digital payments, with almost 80 per cent of New Zealanders in a recent survey saying they would like to use mobile for everyday purchases1. There is however room for improvement. For example, many businesses are still to offer their customers the convenience of ‘tap to pay’ through contactless payments technology.
“All businesses, especially those in hospitality and retail, that adopt contactless payments demonstrate innovation and a willingness to take advantage of new technology to provide better customer service. It’s worth noting that New Zealand consumers are some of the highest users in the world of contactless – more than three-quarters (77 per cent) of New Zealanders own a contactless capable card2,” said Kerr.
He added: “The report’s release, during the busy summer tourist season, is also a reminder that businesses which are forward-thinking in their adoption of new payment technology instantly gain access to the global marketplace. A recent study showed that international Visa cardholders contributed NZ$2.8 billion to the New Zealand economy in 20163”.
1 Visa/YouGov Survey, May 2017, online poll using ActiveSampling of 500 New Zealand people to provide comprehensive market intelligence on a range of industry sectors, surveyed between 16 – 19 May 2017.
2 RFi Research, August 2017, Visa RFi New Zealand Merchant Acquiring and Payments Acceptance Program survey conducted in August 2017, completed by 498 merchants.
3 Visa Tourism Report 2017, The Visa Tourism Spend Report 2017 provides insights based on all transactions performed by international Visa cardholders in New Zealand between 2015 and 2016.
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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 increased digital payments 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 usa.visa.com/aboutvisa, visacorporate.tumblr.com and @VisaNews.
About Cashless Cities
The study, conducted by Roubini ThoughtLab, provides granular data for six cities in various stages of economic development and payments maturity. The data was derived by surveying 3,000 consumers and 900 businesses in those six cities. The net benefit figures for the 100 cities covered in this study are approximations based on a combination of primary survey data gathered from across a sample of six representative cities globally, and secondary data from well-recognised organisations such as the World Bank, Organisation for Economic Co-operation and Development (OECD), International Association of Public Transport (UITP), and McKinsey & Company.
These numbers are quoted in NZD, with an exchange rate of 1USD = 1.43NZD, effective as of 2015. The net direct benefits are estimated on an annual basis, while the catalytic impact (GDP, employment, wages, and productivity) estimates are projected for the next 15 years (2017-2032).