The impact of e-payments

A study by Moody's Analytics shows that government adoption of e-payments, has contributed $983 billion to the world economy while bringing more citizens into the financial mainstream.


The shift to electronic payments has a positive effect on economic growth, supporting governments' aspirations to bring more of their citizens into the financial mainstream and enabling smoother, more efficient commerce.

A study by Moody's Analytics, commissioned by Visa, concluded that the migration to electronic payments — debit and credit card usage — contributed $983 billion to the global economy between 2008 and 2012. The study found that electronic payments contributed to an 0.8% increase in GDP in emerging markets and an 0.3% increase in GDP in developed markets.

One way to measure this positive effect is that a $983 billion increase in GDP, cumulatively, is equivalent to 1.9 million new jobs globally.

According to Mark Zandi, Chief Economist at Moody's Analytics, who studied the impact of card usage on economic growth and activity, the most important way in which electronic payments stimulated GDP was by lowering transaction costs — making it easier, safer and more convenient for consumers to use cards in more places.

Impact of e-payments

The Value of Card Payments

The study also revealed that the value derived from the migration to electronic payments is driven by a number of factors:

  • Higher potential tax revenue
  • Lower cash handling costs
  • Guaranteed payment for merchants
  • A reduction in the gray economy due to lower unreported cash transactions
  • Greater financial inclusion

Importantly, the study concluded that the economic benefits derived from electronic payments "should provide valuable input to policymakers around the world as they consider policies that could speed card adoption."

Future Economic Benefits

Moody’s Analytics found that a 1% increase in card usage across the 56 countries in the study produces an annual increase of 0.056% in consumption. Given recent card penetration growth rates and the additive effects calculated on future GDP, Moody's Analytics estimates a meaningful 0.25% addition to consumption and 0.16% additional GDP.