By making payments faster and easier the electronic payment system has facilitated production and enabled the US economy to grow at a faster pace than it would have otherwise, according to a study released today by the Perryman Group.
The Electronic Payment System: An Assessment of Benefits for US and State Economies, measures the effects of the electronic payments system since its inception by performing a simulation of the US economy in which no such mechanism existed and comparing it to actual US economic measures as of 2014.
It shows that the electronic payments system has increased the size of the US economy by more than 12 per cent (as measured by gross product), increased personal consumption expenditures by almost 17 per cent and increased employment by 20 per cent. This translates to gains in business activities worth $1.760 trillion in gross product and 23.2 million jobs since 1970.
The study, which was commissioned by MasterCard, paid special attention to the years 2004 to 2014, during there was a significant uptick in the use of electronic payments, primarily through the rise of e-commerce. For this period, it found that gains in business activities were worth $432.927 billion in gross product and generated nearly 5.7 million permanent US jobs.
Speaking of the study, author Dr. Ray Perryman said, "Most people will be familiar with the direct benefits of electronic payments; merchants benefit from increased sales and business efficiencies, and consumers benefit from the convenience and safety of credit and debit cards. Less well-understood are the wider benefits that electronic payments have brought to our economy. Our report lays out these benefits."
"The report shows that electronic payments are highly efficient, offering advantages such as speed, reduced costs, and accuracy," he continued. "Our model has allowed us to quantify this and express the benefits in stark terms – the effect on gross product and the number of jobs created."
Included alongside the details relating to the effect on the US economy as a whole, is information showing the impact of electronic payments in specific states. In New York, for example, the economic impact of electronic payments for the period 2004 through 2014 is calculated at almost $33 million in gross product and 430,000 new jobs.