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Electronic payments and economic growth

Electronic payments and economic growth

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Electronic payments play a "significant and sizeable" role in promoting economic growth and development, according to this analysis by Visa International and Global Insight.

The paper contends that growth in US card payments added an additional $6.5 trillion to real consumer spending between 1980 and 2000. Without this growth in spending, the cumulative loss to GDP would have been almost $10 trillion – the equivalent of 1.3 million new jobs – and would have reduced GDP growth by 0.5 percent per year.
This stimulative effect generally holds true across a wide variety of international economies. An analysis of 50 countries worldwide, ranging from Egypt to Canada, found that on average, an increase of just 10 percent in the existing share of card payments in a country would stimulate an increase of 0.5 percent in consumer spending.
Visa and Global Insights contend that electronic payment networks, by increasing the efficiency and velocity of payments, have the potential to create cost savings of at least 1 percent of GDP annually over paper-based systems in any given economy.

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