E-payment methods add USD 296 bln to 70 countries` GDP – study

Household consumption of goods and services increased by an average of 0.18% per year, finchannel.com reports. Real consumption grew at an average of 2.3% from 2011 to 2015, of which 0.01% is attributable to increased card penetration. This implies that card usage accounted for about 0.4% of growth in consumption. Since consumption growth is, on average, faster in emerging economies, those countries also have more to gain by increasing card usage, according to a study conducted by Visa, the source cites.

Countries with the largest increases in card usage experienced the biggest contributions in growth. For example, big increases in GDP were recorded in Hungary (0.25%), the UAE (0.23%), Chile (0.23%), Ireland (0.2%), Poland (0.19%) and Australia (0.19%). In most countries, card usage increased regardless of economic performance. In Russia GDP increase estimated at 0.33%, in Ukraine, 0, 07%, while in Azerbaijan and Kazakhstan GDP increased reached 0, 03% and 0,02% respectively.

On the other hand, increased card usage added the equivalent to almost 2.6 million jobs on average, per year, across the 70 countries sampled between 2011 and 2015. 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 due to the combination of fast growing labor productivity and increased card usage. In CIS region 235 000 new jobs were created in Russia, and around 13 520 news jobs were added in Ukraine. In Kazakhstan and Azerbaijan increased card usage added the equivalent of 2080 and 1130 jobs respectively.

Both emerging markets and developed countries also experienced gains in consumption due to higher card usage. Increased card usage added 0.2% to consumption in emerging markets, compared with 0.14% in developed countries between 2011 and 2015. The corresponding figures for GDP were 0.11% for emerging economies and 0.08% for developed countries, and suggests that all markets, regardless of current card penetration rates, can benefit from increases in consumption due to increases in card usage.

Across the 70 countries in the study, Moody`s economists have found that every 1% increase in usage of electronic payments could produce, on average, an annual increase of approximately USD 104 billion in the consumption of goods and services. Assuming all future factors remain the same, this could result in an annual average increase of 0.04% to GDP attributable to card usage.