Global Insight Presents Electronic Payments and Economic Growth at the United Nations

On 1 July 2003, Global Insight and Visa International presented the findings of a new study, "The Virtuous Circle: Electronic Payments and Economic Growth", at a meeting of the United Nation's Economic and Social Council in Geneva.

The objective of the study was to quantify the potential impact of electronic payments on consumer expenditures and ultimately on an economy as a whole. Using existing models and original econometric research, Global Insight measured the impact that electronic payments have, or could have, on an economy.

Jointly produced by Global Insight and Visa International, the study identified four key areas—domestic economic growth, international economic growth, economic efficiency, and capital accumulation—where electronic payments, including card-based payments, could help drive growth and efficiencies. The study "identifies and quantifies the macroeconomic impacts of electronic payments in ways that haven't been done before," said Mark Lauritano, Managing Director of the Financial Services Practice of Global Insight's Advisory Services Group.

The findings show that—in the United States—growth in card payments added an additional $6.5 trillion to real consumer spending between 1980 and 2000. Additionally, an analysis of 50 countries worldwide found that on average, an increase of just 10% in the existing share of card payments in a country would stimulate a 0.5% increase in consumer spending. Furthermore, the use of electronic payments increases the efficiency and velocity of payments and has the potential to create cost savings of at least 1% of a country's GDP annually over a paper-based system.

The study was presented at a ministerial-level session of the UN's Economic and Social Council, hosted by Visa International CEO Malcolm Williamson. The session brought together senior officials from the United Nations and specialized agencies. Official representatives from 54 countries were present. An electronic version of the study is available via the link below.

For more information about this study or Global Insight's capabilities, please contact:

Global Insight Financial Services and Credit Risk Management-Customized Solutions

Global Insight Card Risk Outlook