The government’s consumer voucher program may have helped spur growth for domestic retailers, but it has hurt the electronic payment sector, which saw a 20.85 percent year-on-year drop in January sales, a MasterCard Worldwide executive said yesterday.
The government should issue electronic vouchers via debit cards if it considers a second voucher scheme, Tina Chiang (江威娜), MasterCard’s vice president and business manager in Greater China, told a media briefing.
Citing figures from the Financial Supervisory Commission (FSC), Chiang said the nation’s total spending via credit cards fell 16.46 percent to NT$102.5 billion (US$2.93 billion) in January from the previous month’s NT$122.5 billion. This was far below the monthly average last year of NT$120 billion, she said.
Chiang attributed the decline in January, which is usually a peak month because of the Lunar New Year holidays, to the NT$85.7 billion in vouchers issued by the government, nearly half of which were spent or cashed within a month of being distributed on Jan. 18.
She said the paper-based vouchers were environmentally unfriendly and could go missing, as was seen at some distribution centers.
By contrast, Chiang said, an electronic voucher scheme operated by banks would save the government on implementation costs and create multifold benefits.
The money the government would save — for example, the NT$2 billion in operating costs it shelled out in the first voucher plan — could be spent on subsidies to retailers to have them install PC-based point of sales (POS) terminals, Chiang said.
If each retailer received a NT$5,000 subsidy, another 400,000 shops could be upgraded with electronic payment systems, making shopping with electronic purses easier nationwide, Chiang said.
About 180,000 of the nation’s 500,000 registered retail shops are equipped with electronic payment systems.
Improving the nation’s electronic payment infrastructure would not only benefit the domestic PC industry, but also smooth the way for boosting tourism in Taiwan, she said.
Chiang said electronic vouchers issued via debit cards would work like paper-based vouchers in that banks could set an expiry date for the voucher and prohibit holders from cashing the voucher instead of spending it.
In any rural areas where debit cards are not popular, Chiang said the government could authorize banks to issue paper-based vouchers.
The plan might not be popular with retailers, however, since they have to pay card issuers a 1.5 percent fee out of every transaction. But Chiang said the government could resolve that problem by cutting the 5 percent value-added tax by 2 percentage points. This, she said, would provide another incentive for businesses to install POS terminals.
In the short run, the tax cut could hit the national coffers, she said, but in the long run, it would improve the nation’s taxation efficiency by reducing the risk of tax evasion, since the transactions would be recorded electronically, she said.
FSC Chairman Sean Chen (陳冲) advocated an electronic voucher scheme when he was chairman of SinoPac Financial Holding Co (永豐金控).
Also, business leaders such as Chinatrust Financial Holding Co (中信金控) chairman Jeffrey Koo (辜濂松) and Kinpo Group (金仁寶集團) chairman Rock Hsu (�?�) have recently called on the government to dole out another round of vouchers.
But Kevin Hsiao (蕭正義), head of UBS Wealth Management Research in Taiwan, said he suspected the government would consider whether to repeat the voucher program based on economic performance figures for the first quarter.
Hsiao, whose company projected the economy would contract 4.5 percent this year, said the government would adopt more aggressive stimulus measures if GDP deteriorated faster than expected in the first quarter.
“If the recession turns out more severe than forecast, the government may adopt more drastic stimulus measures, and issuing consumer vouchers for the second time is one option,” Hsiao said yesterday.
The Directorate-General of Budget, Accounting and Statistics forecast the economy would contract 6.51 percent in the first three months. The agency will release the final figure in May and update its forecast for the year.
Hsiao voiced skepticism, however, that distributing vouchers was a remedy for the economy.
“It may help relieve the pain of retailers and other service providers, but it will not reverse the downturn,” he said.
Also, Hsiao said it remained to be seen whether the vouchers had boosted consumption or were used to pay for regular expenditures.
ADDITIONAL REPORTING BY CRYSTAL HSU
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
It is challenging to build infrastructure in much of Europe. Constrained budgets and polarized politics tend to undermine long-term projects, forcing officials to react to emergencies rather than plan for the future. Not in Austria. Today, the country is to officially open its Koralmbahn tunnel, the 5.9 billion euro (US$6.9 billion) centerpiece of a groundbreaking new railway that will eventually run from Poland’s Baltic coast to the Adriatic Sea, transforming travel within Austria and positioning the Alpine nation at the forefront of logistics in Europe. “It is Austria’s biggest socio-economic experiment in over a century,” said Eric Kirschner, an economist at Graz-based Joanneum
France is developing domestic production of electric vehicle (EV) batteries with an eye on industrial independence, but Asian experts are proving key in launching operations. In the Verkor factory outside the northern city of Dunkirk, which was inaugurated on Thursday, foreign specialists, notably from South Korea and Malaysia, are training the local staff. Verkor is the third battery gigafactory to open in northern France in a region that has become known as “Battery Valley.” At the Automotive Energy Supply Corp (AESC) factory near the city of Douai, where production has been under way for several months, Chinese engineers and technicians supervise French recruits. “They
RSS