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(roughly US$2,500)—far higher than they are in the US.
Ironically, for many small
purchases, Asians are much more likely to use
electronic payments than people in the US. Smart card use for public transportation is
widespread in both Hong Kong and Singapore. In Singapore, “Cashcards”
are used
in all vehicles as part of the country’s electronic road pricing scheme where readers
mounted on road gantries automatically make deductions from the Cashcard
based on the time of day and traffic flow. The ubiquity of Cashcards for both private and
public transportation has led to businesses finding other uses for the card, such as for
payment in public
parking facilities. Hong Kong is also seeking alternative uses for its
Octopus transportation payments card, e.g., for food and sundries in transportation-
adjacent shopping facilities.
While consumption taxes are increasingly being levied in Asia (Australia and
Singapore are two recent examples), electronic purchasing does not confer the
same tax advantages that it does in the US. Both Australia and Singapore, for
example, collect GST on Internet purchases from abroad over a certain amount,
and, within Australia, all electronic purchases are subject to GST (Jordan, 2000).
The costs of shipping to Asia from the US and within Asia are also much higher than
within the US. Typically, shipping costs for consumer purchases from the US to
Singapore add another 20% to 25% to the purchase cost. In Hong Kong, Internet
purchases also have no tax advantages, but for a different reason: there is no sales
tax on purchases in retail outlets.
Another important structural dimension is the distribution of education levels
across age groups. The developed countries in the West have a more even
distribution of education across age groups, while in Asia people 40 and older often
did not have the opportunity to pursue tertiary education. In Singapore, for
example, the proportion of those above 40 years old with a tertiary education is
about 5%, compared to 25% for the developed countries in the West. Hence, when
we compare Internet use across age groups between Singapore and the US, we find
that, for the 18-24 age group, usage rates are quite similar, around 85% for both
countries. However, when we compare the 45-55 age group, usage rates are 14%
for Singapore and about 70% for the U.S. (Kuo et al., 2001; Cole et al., 2001).