A recently announced study gave solid evidence for something those of us in the electronic payment industry have known all along - electronic payments are good for the economy.
The study found that increased use of electronic payment products added $296 billion to GDP in the 70 countries in the study and raised household consumption of goods and services by an average of 0.18 percent per year. Countries that experienced the largest increases in card usage also experienced the biggest contributions in growth.
Furthermore, the study found that the equivalent of 2.6 million new jobs were added yearly as a result of electronic payment products.
Findings from the study also indicated that electronic payments contributed to economic stability by benefiting governments as well as merchants and consumers. According to the study, electronic payments provided the potential for a higher tax revenue base because they eliminate cash transactions that can go unreported. In addition, electronic payments provided the benefits of lower cash handling costs for merchants and greater financial inclusion for consumers.
The future of electronic payments projected from the study painted just as positive a picture. According to the study, every 1 percent increase in usage of electronic payments could produce an average annual increase of approximately $104 billion in the consumption of goods and services. This could result in an annual average increase of 0.04 percent to GDP attributable to card usage.
The study, entitled "The Global Impact of Electronic Payments," was commissioned by Visa and conducted by Moody Analytics in 70 countries between 2011 and 2015. The results were announced March 9, 2016.
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