A senator and a player in the digital economy here has argued for digitisation to become a driving force behind economic growth.
Senator Rawdon Adams, chief executive of digital financial services firm, BITT, told the Upper House today during the Appropriations Bill debate that digitisation can increase productivity while at the same time reduce costs to Government.
He said: “Digitisation speaks to another form of growth — that is productivity. When you have efforts to digitise payments or reduce the amount of cash in an economy that is a huge driver of productivity and a reducer of cost in your economy. There is a body of research: The Federal (Reserve) Bank of St Louis, the Bank of England also.
“The Fed research says if you are able to substitute a third of the paper noted and coins in your economy for digital cash you can expect a permanent increase in your rate of growth of a three per cent point. If you substitute 30 per cent of your economy to digital you will push your growth rate up.”
The Government senator said while he had no intentions of bashing commercial banks, there was a significant cost attached to carrying out simple bank transactions daily.
Senator Adams continued: “Carrying cash is expensive. There is cost of convenience. You get in a car you go down to the bank to draw out your cash. There is a cost to that. Cost in terms of convenience cost in terms of time. Somebody has calculated that time spent per month doing that is 20 minutes. 20 minutes in your car or in a bus just to pull out your money
. . . . Over time that could equate to a month. What if you could do that whole process digitally?”
The Bitt Inc CEO said digitising the economy could also address the menace of companies collecting Value Added Tax and not paying it over to Government.
The senator said: “There are quite a few ways you can imagine that digitising can help. I know there is a lot about people who aren’t paying VAT if it is digitised it is far harder for you to escape that method of taxation.”
Saying that world trends, global studies and figures could prove how digitisation can enhance an economy, Senator Adams suggested that neighbouring economies had already recognised the need to go digital.
“There are many savings you can extract through digitisation,” he said. “Some countries are putting their money where their mouths are. [The] Eastern Caribbean Central Bank intends to reduce the amount of cash in their economy by 50 per cent over four years.”