Huge economic benefits of ‘cashless cities’

Greater use of electronic payments could provide benefits of $470 billion across 100 cities included in a new Visa-commissioned study, a gain that is roughly 3% of their combined GDP.

Cashless Cities: Realizing the Benefits of Digital Payments sought to quantify the potential net benefits of significantly increasing card and mobile payments for three distinct groups – consumers, businesses and governments.

The study found that consumers in the 100 cities would gain about $28 billion annually in direct net benefits through 3.2 billion hours in time savings and a reduction in cash-related crime.

Businesses, meanwhile, would achieve roughly $312 billion per year in direct benefits. Digital payments would net 3.1 billion hours in time savings, with businesses also enjoying increased sales revenues from expanded online and in-store customer bases. The study estimates cash and cheques cost companies 7.1 cents of every dollar spent, versus 5 cents of every dollar collected from digital sources.

Governments would gain nearly $130 billion annually through increased tax revenues, higher economic growth, cost savings from administrative efficiencies and lower criminal justice costs because of reduced cash-related crime.

‘Societies that substitute digital payments for cash see benefits from greater economic growth, less crime, more jobs, higher wages, and increased worker productivity,’ says Ellen Richey, Visa’s vice chairman and chief risk officer.