The rise of electronic payments over the last five years has added nearly $300 billion to GDP across 70 countries and created millions of jobs, claims a new Visa-commissioned study.
For the study, Moody's Analytics analysed the impact of electronic payments on economic growth across 70 countries, which between them make up almost 95% of global GDP, between 2011 and 2015.
According to the report, increased use of electronic payment products, including credit, debit and prepaid cards, added $296 billion to GDP, while raising household consumption of goods and services by an average of 0.18% per year, with developing countries seeing the biggest boost.
Meanwhile, Moody's economists estimate that over the five years the rise of e-payments resulted in the equivalent to 2.6 million new jobs being created on average, annually. The two countries with the greatest average job increases were China and India, which, Moody's notes, both had large gains in employment due to the combination of fast growing labour productivity and increased card usage.
The study also suggests that the electronification of payments benefits governments and contributes to a more stable and open business environment while shrinking the grey economy. All this means higher tax revenue bases for governments, lower cash handling costs, guaranteed payments to merchants and greater financial inclusion for consumers.
Across the 70 countries, Moody's found that every one per cent increase in usage of electronic payments could produce, on average, an annual increase of approximately $104 billion in the consumption of goods and services. Assuming all future factors remain the same, this could result in an annual average increase of 0.04% to GDP attributable to card usage.
Mark Zandi, chief economist, Moody's Analytics, says: "Electronic payments are a major contributor to consumption, increased production, economic growth and employment creation. Those countries which saw large increases in card usage also saw larger contributions to overall growth in their economies."