Increased use of electronic payments between 2008 and 2012 boosted the global gross domestic product (GDP) by $983 billion, creating the equivalent of 1.9 million jobs around the world, according to a new study.
The study, conducted by Moody’s Analytics for Visa, reviewed the impact of the growth in electronic payments, such as debit or credit cards, in the 56 countries that represent 93 percent of global GDP.
The results show that increased card usage over the past five years contributed an average additional growth of 0.17 percent in the global GDP per year, and an average 1.8 percent increase in the domestic GDP of the countries polled.
The study also said that card payments have had a significant part in the global financial recovery over the last five years, boosting the average global real GDP from 1.6 percent to 1.8 percent.
“Card usage makes the economy more efficient, yielding a meaningful boost to economic growth, year after year, through a multitude of factors including transaction efficiencies, consumer access to credit and consumer confidence in the payment system overall,” the study said.
The correlation between electronic payments and economic growth was especially significant in emerging markets where they contributed to a 0.8 percent increase compared to developed markets that saw a 0.3 percent increase, according to Chief Economist of Moody’s Analytic Mark Zandis.
“The increase in consumption parallels the growing popularity and accessibility of electronic payments among global consumers, and the findings point to the need for governments to adopt policies that encourage the shift to efficient and secure electronic forms of payments,” Zandi said.
In China, card usage increased consumption by 4.89 percent, followed by Chile with an increase of 1.28 percent and Brazil’s increase of 1.15 percent.
In the U.S., where credit and debit card usage has been more constant, increased electronic payments accounted for only 0.3 percent of GDP growth, but still added a significant $127 billion to the U.S. economy.
The results cite the security and immediate access to a multitude of accounts and lines of credit as major factors for increased use.
Additionally, electronic payment opportunities have allowed merchants to eliminate several risks and hassles that come with holding cash and cashing checks.
Electronic payments also paved the way for the booming e-commerce industry that allows both merchants and consumers to exchange goods and services around the world.
“The findings from the study confirm what Visa has long maintained – the migration to electronic payments increases economic efficiencies and supports global economic growth,” Visa, Inc., CEO Charlie W. Scharf said. “Notably, electronic payments helped to mitigate what would otherwise have been an even slower recovery from the global recession as card penetration and usage provided an important and measurable boost to economies.”