Card usage makes economy more efficient: Moody's

Growth in use of electronic payment products added $1.5 billion to GDP

 

Card usage makes the economy more efficient, yielding a meaningful boost to economic growth, said a study conducted for Visa by Moody's Analytics on Wednesday.

The growth in the use of electronic payment products, such as credit and debit cards added $1.5 billion to the GDP of India, estimates the study.

Globally, electronic payments contributed $983 billion to the GDP pf the 56 countries examined between 2008 and 2012. Over the same time period, GDP in those countries grew by an average of 1.8 percentage points, said the study.

Moody's Analytics found that a one percent increase in card usage across the 56 countries in the study produces an annual increase of 0.056 percent 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 percent additional GDP.

According to the study from 2008 to 2012, global real GDP was only 1.8% per annum. Without increased card usage, that growth would have been 1.6%.