Visa Spotlights Payment Card Incentive Programs Fostering Economic Growth in Emerging Markets

Today, at the 8th annual Visa International Government Services Conference in Buenos Aires, Visa is showcasing how its government partnerships have significantly contributed to the realization of economic development goals for emerging and industrialized nations around the world.

During the conference, the head of the Argentinean Federal Administration of Public Revenue discusses the contributions that payment card incentive programs have made enhancing economic transparency. Governments in Latin America and the Caribbean (LAC) have implemented payment card incentive programs similar to an initiative implemented successfully in South Korea to restore tax revenues after the economic crisis of 1997. The Korean government specifically mandated policies to promote payment card usage among consumers, businesses and merchants. Over time, these measures were successful in increasing Korean national tax revenue, while contributing to overall economic growth.

“As the leading global payments brand, Visa works with governments to create targeted incentive programs that produce positive economic impact using best practice principles from worldwide experience,” said Aliza Knox, senior vice president, Visa Commercial, Visa International. “The substance of this year’s conference serves as a testament to the success of Visa and members in providing payment products and services that help governments and the public sector to achieve procure-to-pay automation, improve efficiency and transparency in the payment process, and meet economic growth objectives.”

Governments in Argentina, Colombia, Costa Rica, the Dominican Republic, Mexico, and Uruguay have implemented incentives that drive payment card usage to provide greater transparency of financial transactions and improve tax collection. Incentives have ranged from lotteries to VAT rebates, as outlined below:

• In Argentina, since 2002, consumers who purchase goods and services using credit and debit cards receive a refund of three and five basis percentage points, respectively, off of a VAT tax of 21 percent.

• In Colombia, since 2004, consumers who purchase goods and services using credit and debit cards receive a refund of two percentage points off of a VAT tax of 16 percent.

• In Uruguay, since early 2006, tax authorities offer VAT rebates of up to nine percentage points off of a 23 percent VAT tax rate in the tourism sector (including restaurants and car rentals).

• In addition, in Mexico, since 2003, there has been a high-profile lottery – El Boletazo – in place to promote payment card usage among consumers.

Payment card incentive programs are only one of many different types of government initiatives that are being presented and discussed during the Visa International Government Services Conference. With this year’s conference theme, “Modernizing through Innovation,” the event provides the platform for 25 internationally recognized leaders and authorities on government payment services to share their experiences using card technology to bring automation to their operations. A number of governments and Visa members are showcasing their programs, while industry experts from the International Finance Corporation (IFC), the private sector arm of the World Bank, and Harvard University, are imparting their insights on information-sharing and change management in government, respectively.

The Visa International Government Services Conference focuses on Visa’s state-of-the-art payment solutions and how governments have leveraged them to develop innovative programs for modernizing economies and improving the quality of life for citizens. Visa payment solutions effectively streamline the processes by which governments make and receive payments to and from businesses and consumers.

The two-day program features:

• The Comptroller General, Ministry of Finance, Government of Thailand discussing the creative use of pre-authorized cards to facilitate a unique expense management program that tracks usage, enforces travel expense policy and minimizes loss.

• A representative of the Mexican Secretary of Economy discussing how the partnership with commercial banks has led to a successful program for administering government-backed small business loans through Visa cards to promote economic development.

• A representative from the Kent County Council in the United Kingdom outlining a new government procurement card initiative that streamlines the distribution of government aid payments to reduce unnecessary bureaucracy while enhancing control.

• The Director General of the Administrator of Social Subsidies for the Dominican Republic discussing the Solidarity Card program, outlining how payment cards can streamline and ensure the distribution of monetary aid while providing citizens with a powerful new purchasing tool.

• An internationally recognized professor of public management at Harvard University sharing insights about thriving in a climate of change from his role in the Clinton administration’s “reinventing government” program.

• The general manager of Peru’s acquiring company for Visa, Visanet del Peru, outlining how Peruvian government entities are simplifying incoming payments by accepting Visa as a form of payment for a variety of government services.

• A director at the U.S. Department of Defense discussing how multi-function SMART card technology has been leveraged to build an integrated system for managing building access and other functions.

• An International Finance Corporation (IFC) retail risk and credit bureau advisor for LAC discussing the partnership between Visa and IFC to develop credit bureau networks in developing countries to improve the availability of financing to consumers and small businesses.

• An advisor to the government of the province of Buenos Aires sharing the success story of using special purpose BAPRO COPRES Visa cards to manage fleet-related expenses.

This year, Visa’s International Government Services Conference is estimated to draw more than 200 attendees from 23 countries, which includes national, regional, and local government officials, commercial banking officers, and executives from Visa and its partners.