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Wanted: subsidies for electronic payments

Governments across the world provide subsidies for various activities. Most countries provide farm subsidies; education, health and even fuel is subsidised through government largesse.

Now, to promote electronic payments, I should think governments should dish out subsidies. Governments can be creative on this one; let's say a country starts issuing E Dollars; the cost of which should be definitely lower than paper notes. All government services should cost less when paid by E Dollars. Again, governments must encourage acceptance of EDollars across the economy as compared to cash.

It's time for governments to shift their subsidies to electronic payments. These will pay themselves back very soon. 

We need more 'liberals' fighting for the right kind of subsidies! Let's start with electronic payments. 

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Comments: (3)

Bo Harald
Bo Harald - Transmeri, Demos, Real Time Economy Program,MyData - Helsinki Region 31 October, 2010, 16:41Be the first to give this comment the thumbs up 0 likes

Not so much subsidies needed - better to encourage transparent charging - common in the Nordics already to add cost of paper invoices to the invoice. Also just - those who use e-invoicing should not pay for more expensive behavior of others.

Same logic was used in bank branches already in the 80s when e-banking was introduced.

Nothing works like "negative carrots"

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 01 November, 2010, 14:28Be the first to give this comment the thumbs up 0 likes

If they became as simple as writing a cheque, e-payments will automatically see a lot more adoption by the man on the street - there's no need for any government subsidies.

When many EU governments - Social Security in Germany, HM Revenue in the UK, to name a few - insist on using snail-mail for any letter that contains Personally Identificable Information (PII), I don't see why I should be slapped a penalty if I don't want to accept bills and invoices electronically.  

 

 

A Finextra member
A Finextra member 01 November, 2010, 14:31Be the first to give this comment the thumbs up 0 likes

This concept may work in many countries work but you can not pursuade the people that function in the "grey or black" markets to jump on a e-payment platform.  I have been a part of several joint bank and government e-payment programs that did not meet the "consumer usage goals" and the root cause appeared to be the fear by many consumers and  merchants that all of their transactions would be tracked, analyzed and taxed by the government. 

"Cash is king" with many groups within developed and developing countries and the convenience and efficiencies that are inherent in e-payments will not overcome the issues of consumer privacy and/or financial reporting of transactions.   

Sriram Natarajan

Sriram Natarajan

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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.


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