Visa Spotlights Payment Card Incentive Programs

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.