The Nigerian economy alongside 70 others have seen e-payments contributing over $300 billion to their GDP, a study by payment technology company, Visa Inc., has revealed.
Visa has released the results of the new 2016 study conducted by Moody’s Analytics that analysed the impact of electronic payments on economic growth across 70 countries, including Nigeria, between 2011 and 2015.
The Visa-commissioned study found that increased use of electronic payment products, including credit, debit and prepaid cards, added US$296 billion 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 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,” Mark Zandi, Chief Economist, Moody’s Analytics says. “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.
”These findings reinforce the many positive benefits that electronic payments bring to local economies all over the world,” Charlie W. Scharf, Chief Executive Officer, Visa Inc. says “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.”[quote font=”georgia” font_size=”22″ font_style=”italic” bgcolor=”#” color=”#” bcolor=”#” arrow=”yes”]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 in the study make up almost 95 percent of global GDP.[/quote]
On potential future growth, Moody’s Analytics found that every 1 percent increase in usage of electronic payments could produce, on average, an annual increase of approximately $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 percent to GDP attributable to card usage.
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.