However, a recent study from Visa suggests the advantages may be significantly more far reaching. In fact, the study concludes that debit and credit card usage boosted Gross Domestic Product (GDP) in Canada, and Global GDP by $983 billion between 2008 and 2012.
The study, which included 56 countries, confirmed the migration to electronic payments increases economic efficiencies and supports global economic growth. Card usage and penetration even helped with the recovery from the global recession by boosting economies worldwide.
Specifically, the study found that electronic payments stimulated economic growth in the United States and even some emerging economies. Global real GDP jumped from 1.6 percent to 1.8 percentage points thanks to consumers’ use of plastic payment cards. In the U.S. alone, card use drove $127 billion into the economy, according to Visa.
The increase in consumption matches up with the growing popularity and accessibility of electronic payments among global consumers. It also highlights the importance of maintaining an open marketplace to encourage competition and innovation within the industry.
The study concluded that increased credit and debit card usage contributes to economic activity by reducing transaction costs and improving efficiency in the flow of goods and services. Credit and debit cards have greatly aided consumers' ability to make purchases, by giving them secure and immediate access to all of their funds.
Merchants also benefit, as 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 e-commerce and mobile payment methods would not be possible without global electronic payments systems, which allow the safe and easy transfer of funds and guarantee payment to merchants.
At the same time, these findings point to the need for governments and regulatory entities to support the shift to even more efficient and secure electronic forms of payments.