Credit, debit card payments boost economic growth

A survey conducted by independent provider of economic forecasting Moodys Analytics, on behalf of Visa, shows that USD 983 billion have been added to the Gross Domestic Product (GDP) in 56 countries between 2008 and 2012, as a result of the growth in the use of credit and debit card payments.

The same source unveils that card usage makes the economy more efficient, leading to an economic growth, year after year, through a multitude of factors including transaction efficiencies, consumer access to credit and consumer confidence in the payment system overall.

Results indicate that increases in card consumption have contributed to an average additional growth in GDP of 0.17 percentage point per year during the period under review. Over the same time period, GDP has risen by an average of 1.8 percentage points. Card usage in the US has increased GDP by 0.3 percent, adding USD 127 billion to the economy. In some countries, card usage has increased consumption significantly, China by 4.89 percent, Chile by 1.28 percent and Brazil by 1.15 percent.

Research also reveals that the advent of credit and debit cards has helped consumers ability to optimise 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 check handling in the system, eliminating the burdens and risks associated with holding cash. In addition, the dramatic growth of ecommerce would not be possible without global electronic payment systems, which allow the safe and easy transfer of funds from consumers to merchants.

This study analyzes the impact of increased card penetration on private consumption in 56 countries from Europe, Asia-Pacific, Middle East and Americas between 2008 and 2012.