HONG KONG, April 20, 2016 /PRNewswire/ -- Visa Inc. today released the results of a new 2016 study conducted by Moody's Analytics that analyzed the impact of electronic payments on economic growth across 70 countries or markets between 2011 and 2015. The Visa-commissioned study found that increased use of electronic payment products, including credit, debit and prepaid cards, added US$296B to GDP, while raising household consumption of goods and services by an average of 0.18 percent per year.
In addition, Moody's economists estimate that the equivalent to 2.6 million new jobs were created on average, annually, over the five-year period as a result of increased use of electronic payments. The 70 countries or markets in the study make up almost 95 percent of global GDP.
"Electronic payments are a major contributor to consumption, increased production, economic growth and employment creation," noted Mark Zandi, Chief Economist, Moody's Analytics. "Those countries which saw large increases in card usage also saw larger contributions to overall growth in their economies."
Findings from the study were shared in the report, "The Impact of Electronic Payments on Economic Growth," which also indicated that the electronification of payments benefited governments and contributed to a more stable and open business environment. Additionally electronic payments helped to minimize what is commonly referred to as the grey economy -- economic activity that is often cash-based and goes unreported. As a result, electronic payments provided a higher potential tax revenue base for governments, while also bringing the added benefits of lower cash handling costs, guaranteed payment to merchants and greater financial inclusion for consumers.
"These findings reinforce the many positive benefits that electronic payments bring to local economies all over the world, Hong Kong is among the highest user of cards across the 70 markets studied," said Caroline Ada, Country Manager, Visa Hong Kong and Macau. "This research also suggests that the right public policies can create an open, competitive payment environment, and contribute to economic growth and job creation. At Visa we are partnering globally with governments, financial institutions, merchants and technology companies to develop innovative payment products and services that will accelerate electronic acceptance, grow commerce, and bring the benefits of card payments to more people everywhere."
Highlights of the global study include:
The study highlights that expanding electronic payments alone will not necessarily increase a country's prosperity -- it requires the support of a well-developed financial system and healthy economy to have the greatest impact. The report recommends at a macro-level, to encourage the further electronification of payments, countries must promote policies that minimize unneeded regulation, create a robust financial infrastructure, and lead to greater consumption.
Regional Contribution to GDP
Hong Kong is among the highest user of cards across the 70 countries studied. Asian countries experienced an average GDP increase of 0.06% resulting from increased card usage. Within this region, Thailand (0.19%), Vietnam (0.14%), and Singapore (0.1%) experienced the largest weighted average increase in GDP due to increased card usage. One possible explanation for the increased card usage is the greater internet availability across these Southeast Asian countries, since easily accessible internet gives consumers the possibility to both learn about and access different forms of electronic payments. From 2011 to 2015, increased electronic payment usage added to each of the market's economy below in Greater China region.
Regional Contribution to Jobs
Countries with the largest number of job gains per year were also the largest countries. Notably, the two countries with the greatest average job increases were China (427,000 jobs added) and India (336,000 jobs added), which both had large gains in employment because of the combination of fast growing labor productivity and increasing card usage. Led by these emerging markets, the emerging markets group averaged a greater number of jobs added per year (43,600) than did developed countries (14,800). Between 2011 and 2015, increased electronic payment usage created the equivalent to an average of jobs below per year in Greater China region.
Click here to view the fact sheet.
The study and additional materials can be found on www.visa.com/moodysanalytics
About Visa Inc.
Visa Inc. (NYSE: V) is a global payments technology company that connects consumers, businesses, financial institutions, and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world's most advanced processing networks -- VisaNet -- that is capable of handling more than 65,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, pay ahead of time with prepaid or pay later with credit products. For more information, visit usa.visa.com/about-visa, visacorporate.tumblr.com and @VisaNews.
Media Contact
Kaman Ho
Director
Corporate Communications
Visa Hong Kong Limited
Tel: 2842 2321 / 9212 2045
Email: kamho@visa.com