Migration to electronic payments has added US $6bn (approximately Rs 40,000 crore) to India’s GDP and created 1.4 million additional jobs, according to a study.
Conducted by Moody’s Analytics on behalf of card major Visa, the study says that electronic payments have had a huge impact on economic growth across 70 countries between 2011 and 2015.
“While card usage in the 70 countries cumulatively added US $269bn in global consumption, in India the increased use of electronic payment products, including credit, debit, and prepaid cards, added USD6.08bn to the GDP over the same period,” the study said.
T R Ramachandran, Group Country Manager, India and South Asia, Visa, said, “Over the past two weeks, the Ministry of Finance (MoF) and the Reserve Bank of India (RBI) have announced a series of measures to propel the shift to digital payments underscored by the objective to transform India into a less-cash society.”
The study also said that the real consumption grew at an average of 2.3 per cent from 2011 to 2015, of which 0.01 per cent is attributable to increased card penetration. This implies that card usage accounted for about 0.4 per cent of growth in consumption. Since consumption growth is, on average, faster in emerging economies, those countries have more to gain by increasing card usage.
China and India are the two countries with the greatest average job increases, with 336,000 and 427,000 job additions, respectively.
Covering the 70 countries in the study, Moody has also found that for every one per cent increase in usage of electronic payments could produce, on average, an annual increase of approximately US $104bn in the consumption of goods and services.
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