Card payments boom across the world, led by Finland

Payments made with debit and credit cards and other non-cash methods jumped 9 per cent last year to 390 billion transactions, according to a study published on Tuesday. 

PHOTO: BLOOMBERG

OCT 6, 20152:59 PM

[LONDON] Payments made with debit and credit cards and other non-cash methods jumped 9 per cent last year to 390 billion transactions, according to a study published on Tuesday.

The 2015 World Payments Report gave an estimate for transactions last year and detailed numbers for the year before.

It showed people in Finland made an average of 450 non-cash payments in 2013, more than any other nationality, thanks to innovations in payments system, and a strong economy and private spending. Its cold winters also encourage the use of e-commerce.

The report said people in the United States were next most active, making 390 non-cash transactions on average in 2013, followed by the inhabitants of the Netherlands, Australia, Denmark, South Korea and Sweden.

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Payments by cards, direct debits and credit transfers are booming as people turn to mobile banking, contactless cards and other innovations rather than cash.

The report, a joint venture between Capgemini and Royal Bank of Scotland, said further advances could come from blockchain technology - a growing, decentralised database that allows secure digital transfers. "Blockchain has the potential, in a simple way, to disrupt a lot of the payment infrastructure and the way we conduct business," said Teresa Connors, head of client engagement of payment services at RBS, saying the architecture could offer security, an audit trail, transparency and speed.

The World Payments Report estimated 390 billion non-cash payment transactions were made last year, up 9 per cent from 2013 and up 45 per cent from 2009.

China's population made fewer than 50 non-cash transactions per person on average in 2013, but that was up 37 per cent from the year before. China's growth is being driven by a rising penetration of mobile phones in smaller towns and steps by authorities to accelerate the roll-out of point-of-sale equipment to merchants as well as opening the domestic card payments market to competition.

While card payments rise, the decline of cheques looks set to continue.

Cheque transactions fell 11 per cent in 2013 from the year before and accounted for 4 per cent of non-cash payments in Europe and 13 per cent in North America, down from 7 per cent and 22 per cent, respectively, in 2009.

The report forecast fewer than 5 billion cheques would be written in 2025, compared with about 25 billion in 2013.

REUTERS

    
 

Islamic halal economy set to grow: experts

      

OCT 6, 201511:24 PM

[DUBAI] The halal economy is set to grow as the world's Muslim population expands and more products are certified to comply with Islamic sharia law, experts said on Tuesday.

The range of halal products, from goods not containing pork or alcohol to financial and tourism services, is rising as the global Muslim population grows.

"They are growing because we are increasing by 2.5 to 3 per cent every year. Islam is the fastest growing religion," said Muhammad Chaudry, president of the Islamic Food and Nutrition Council of America.

He said many products that were sharia-compliant by nature are now being certified as halal, contributing to the increase in the size of the halal economy.

"When we talk about the halal economy growing by 20 per cent, it is the conversion from indiscriminate we-don't-know-what's-in-it economy to a definitely halal-certified economy," he told AFP at an Islamic economy forum in Dubai.

The rising demand for halal products has seen businesses, restaurants and hotels across the world cater for the needs of Muslim clients, Chaudry said.

"Halal is a lifestyle. Countries like Japan and Korea are taking the lead to convert their restaurants and hotels into halal-friendly so they can attract more tourists from Muslim countries," he said.

"Halal is a global entity. We are looking at 1.8 billion consumers," he said, referring to an estimate of the world's Muslim population.

The head of the Emirates Authority for Standardisation and Metrology, Abdulla al-Muaini, said the Muslim population, expected to reach 2.2 billion in 2030, is a "core market" for halal products.

He said the Organisation of Islamic Cooperation values the global halal sector at US$2.3 trillion.

"Halal industry is expected to be one of the steady growing sectors across the global economy," he said.

AFP

      

Gold holds near one-week high after Fed rate increase delay

Gold held near the highest level in a week after bets shrank for a US rate rise this year, boosting the outlook for the metal which doesn't pay interest or give returns like other assets such as bonds and equities. 

PHOTO: REUTERS

OCT 6, 201511:37 AM

[SINGAPORE] Gold held near the highest level in a week after bets shrank for a US rate rise this year, boosting the outlook for the metal which doesn't pay interest or give returns like other assets such as bonds and equities.

Bullion for immediate delivery was at US$1,136.50 an ounce at 10:55 am in Singapore from US$1,135.75 on Oct 5, according to Bloomberg generic pricing. Prices rose to US$1,142.07 in intraday trading on Monday, the highest since Sept 28.

The probability that the Federal Reserve will tighten monetary policy this month has dropped to 10 per cent, suppressing the dollar while bolstering assets in emerging and riskier markets that have benefited from the era of cheaper money. Mohamed A. El-Erian, a Bloomberg View columnist and the chief economic adviser at Allianz SE, said the odds of a Fed liftoff are 50 per cent for the following session Dec 15-16, while analysts at Societe Generale SA said Federal Open Market Committee officials won't move until March. The Fed releases the September FOMC meeting minutes on Thursday.

"Investors are likely to look for guidance for the directions in short-term gold price movements in the FOMC minutes to be released this week, with any indication from the Fed to signal a potential delay in the liftoff likely to be supportive of prices," Vyanne Lai, an economist at National Australia Bank in Melbourne, said by e-mail on Tuesday. "That said, our outlook for the US economy has not changed fundamentally as a result of recent events and we continue to place a high probability on the first rate hike to take place in December." Silver lost 0.2 per cent to US$15.63 an ounce after surging to US$15.7304 on Monday, the highest price since July 13. Palladium fell 0.6 per cent to US$688.30 an ounce after rising to US$712.90 on Oct 5, the highest since June 19.

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Pimco says asset prices can weather Fed shift as ECB to BOJ ease  

Pacific Investment Management Co, home to the world's biggest actively run bond fund, says asset prices around the world will be able to withstand a Federal Reserve interest-rate increase. 

PHOTO: AFP

OCT 6, 20159:08 PM

[SINGAPORE] Pacific Investment Management Co, home to the world's biggest actively run bond fund, says asset prices around the world will be able to withstand a Federal Reserve interest-rate increase.

Central banks in Europe, Japan and China are all poised to add to their monetary easing programs in the fourth quarter, offsetting any Fed move, Pimco's Joachim Fels wrote in a report published this week.

"I find it hard to believe that asset prices would go down if the ECB or the BOJ announced a significant increase of their respective programs," Fels, an economic adviser at Pimco and the former chief economist at Morgan Stanley, wrote in the note.

Fed officials including Chair Janet Yellen have said the central bank will probably raise rates this year, while futures suggest investors are preparing for it to happen in 2016. The Fed outlook, combined with an economic slowdown in China, helped send the MSCI World Index of shares down 10 per cent in the past two months, the steepest decline in four years.

Pimco, with US$1.52 trillion in assets, is based in Newport Beach, California. The US$98 billion Total Return Fund is second in size to the US$120 billion Vanguard Total Bond Market Index Fund, which tracks the performance of a benchmark.

BLOOMBERG

      

EU ministers agree measures to curb multinationals' tax avoidance

"We have a political deal on this issue," Luxembourg's finance minister Pierre Gramegna told his EU counterparts in a public session of a meeting in Luxembourg, the country that holds the rotating presidency of the European Union. 

PHOTO: AFP

OCT 6, 20157:01 PM

[LUXEMBOURG] European Union finance ministers agreed on Tuesday to automatically exchange information on deals struck with multinational companies from 2017 in a bid to reduce tax avoidance, officials said. "We have a political deal on this issue," Luxembourg's finance minister Pierre Gramegna told his EU counterparts in a public session of a meeting in Luxembourg, the country that holds the rotating presidency of the European Union.

The tax deals, known as rulings and advance price arrangements, provide companies with information about their future tax bills when they settle in a country.

It is a widespread practice and is not illegal, but it can allow large corporations to minimise their tax bills in Europe by shifting profits to countries with lower taxes.

The automatic exchange of information on such deals is seen as a way of discouraging aggressive tax planning and making multinationals pay tax according to where they really do business
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Opec sec-gen wants cooperation with non-members on surplus

Opec Secretary-General Abdullah al-Badri said on Tuesday the oil exporter group should work together with producers outside Opec to tackle a global surplus of crude. 

PHOTO: AFP

OCT 6, 20158:14 PM

[LONDON] Opec Secretary-General Abdullah al-Badri said on Tuesday the oil exporter group should work together with producers outside Opec to tackle a global surplus of crude. "All of us should work together, Opec and non-Opec - work together to get rid of this overhang," Badri told an industry conference in London. "There is one problem we are facing: the overhang of 200 million barrels," he added.

Non-Opec producers including Russia have refused to cut their output, although forecasters have reduced estimates for supply growth outside the Organization of the Petroleum Exporting Countries because of a slump in oil prices. Crude prices have almost halved from a year ago.

Opec has invited non-Opec countries to attend a technical meeting in October to discuss the market, Badri told reporters, following on from a similar meeting held earlier this year.

Badri said oil supply growth from non-Opec producers might be zero or negative in 2016 because of lower upstream investment. Investment has been cut by around US$130 billion this year from about US$650 billion in 2014, he said. "We will see the effect of the cut on production. This will mean less supply in the near future.
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Australia central bank holds rates steady for a 5th month

Australia's central bank kept its cash rate unchanged at a record low 2.0 per cent on Tuesday for a fifth straight month in a widely expected decision as it waited to judge the impact of past easings. 

PHOTO: BLOOMBERG

OCT 6, 201511:55 AM

[SYDNEY] Australia's central bank kept its cash rate unchanged at a record low 2.0 per cent on Tuesday for a fifth straight month in a widely expected decision as it waited to judge the impact of past easings.

The Reserve Bank of Australia (RBA) made the announcement following its monthly policy meeting. All 25 analysts polled by Reuters last week expected no change this week.

REUTERS

India hopes to roll out goods and services tax in 2016: Modi

India hopes to roll out a new goods and services tax (GST) in 2016, Prime Minister Narendra Modi said on Tuesday in a speech to Indian and German businesses that played up the attractiveness of investing in Asia's third-largest economy. 

PHOTO: REUTERS

OCT 6, 20153:26 PM

[BENGALURU] India hopes to roll out a new goods and services tax (GST) in 2016, Prime Minister Narendra Modi said on Tuesday in a speech to Indian and German businesses that played up the attractiveness of investing in Asia's third-largest economy.

The GST, currently blocked in parliament, was one of a range of business-friendly measures highlighted by Mr Modi in a speech in tech hub Bengaluru, in southern India, during a visit by German Chancellor Angela Merkel.

Mr Modi also said his government was speeding up regulatory clearances, reducing licensing requirements in the defence sector and making tax policy more consistent. "We have articulated very clearly that we will not resort to retrospective taxation," Mr Modi said.

REUTERS