Independent Economic forecast provider, Moody’s Analytics, has recently conducted a study which concludes that the usage of debit and credit cards and other electronic methods for payment has contributed $10 billion to the Gross Domestic Product of Canada during last four years. Whereas, the study of the GDP of 56 other countries in the world between 2008 and 2012 shows that they have got $983 billion from the usage of these payment cards during the same tie span. Moreover, during the same stretch of time, the average growth rate of the GDP of these 56 countries grew by 1.8 percent. This brings the research to a conclusion that “card usage makes the economy more efficient, yielding a meaningful boost to economic growth.” Country manager of Visa for Canada, Jim Allhusen said, “With growing card usage contributing $9.7 billion to Canada’s GDP, there’s no denying the benefits of electronic payments here, or the importance of maintaining an open marketplace to encourage competition and innovation within the industry.”
He also added that, “We can see from the data that the positive impact in economic growth is a direct result of card usage and is tied to the benefits electronic payments offer, including enhanced security, convenience of operating without cash or cheques, increased efficiency at checkout and a reduction in the grey economy.”
“The study concluded that increased credit and debit card usage contributes to economic activity by reducing transaction costs and improving efficiency in the flow of goods and services. The advent of credit and debit cards has greatly aided consumers’ ability to optimize consumption decisions by giving them secure and immediate access to all of their funds on deposit or a line of credit. Merchants also benefit because there is less cash and cheque handling in the system, eliminating the burdens and risks associated with holding cash.”
Chief Economist of Moody’s Analytics, Mark Zandi stated that, “Despite a challenging global economic landscape, the increasing penetration of payment cards helped increase consumer consumption and on average, added to GDP. The increase in consumption parallels the growing popularity and accessibility of electronic payments among global consumers. At the same time these findings point to the need for governments to adopt policies that encourage the shift to efficient and secure electronic forms of payments.”
During the period of 2008 to 2012, worldwide real GDP was 1.8 percent for each year. Moody’s research says that without increased electronic payment products usage, this growth would have been standing at 1.6.
Source: TechVibes
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