According to a study by economic forecasting provider Moody’s Analytics, using electronic payment products—like credit and debit cards—added $983 billion to the GDP of the 56 countries examined between 2008 and 2012. The participating countries represent 93 percent of the global GDP.
The increases in card consumption contributed to an average additional growth in GDP of 0.17 percentage points per year over the 5-year period, the study revealed. During that same time period, GDP in those countries grew by an average of 1.8 percentage points.
“Despite a challenging global economic landscape, the increased penetration of payment cards helped boost consumer consumption and, on average, added to GDP,” Mark Zandi, chief economist of Moody’s Analytics, said. “This was particularly true for emerging markets. 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.”
According to the report, from 2008 to 2012 global real GDP was only 1.8 percent per annum, a 0.2 percent increase without increased card usage (1.6%).
Other highlights from the study included:
- Card usage in the U.S. increased GDP by 0.3 percent, adding $127 billion to the nation’s economy.
- The use of cards increased consumption significantly, the highest in China (4.89%); Chile (1.28%); and Brazil (1.15%).
- Increased credit and debit card usage contributes to economic activity by reducing transaction costs and improving efficiency in the flow of goods and services. Usage also helps the growth of ecommerce because of the safe and easy transfer of funds from consumers to merchants.
“The findings from the study confirm what Visa has long maintained – the migration to electronic payments increases economic efficiencies and supports global economic growth,” Charlie W. Scharf, CEO of Visa Inc., 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.”
See the complete report here.