Electronic payments are a major contributor to consumption, economic growth and employment creation, according to a new study conducted by Moody’s Analytics entitled “The Impact of Electronic Payments on Economic Growth.”
The report, which was commissioned by Visa, covers 70 markets globally during the 5 year period between 2011-2015.
The notable conclusions reached by the report are that in the UK, increased use of electronic payments contributed to a 0.18 per cent increase in consumption each year, which in turn, led to a 0.11 per cent contribution to the UK GDP and over 34,500 jobs created each year.
Globally, the report revealed that an increased use of electronic payments added $296 billion to GDP, while creating 2.6 million jobs on average per year. The results shown across the 70 countries included in the study, where that every 1 per cent increase in usage of electronic payments could return an average annual increase of approximately $104 billion in the consumption of goods and services.
Moody’s report backs up these findings by revealing that the countries with the largest increases in card usage such as Hungary, the United Arab Emirates and Ireland experienced the biggest contributions in growth.
According to the report, electronic payments are good news for all parties in a financial transaction. For the customer it provides access to funds whenever they need them and provides a method of payment for online shopping. For merchants, card payments lower staffing costs and for central banks, lower demand for physical cash improves the efficiency of commerce.
This leads to increased consumption, which in turn, contributes to increased production, more jobs, higher income, and, ultimately, stronger economic growth.
Image source: Shutterstock/Robert Kneschke