Electronic Payments Drive One-Quarter of Canadas Economic Growth

Wednesday 16 June 2004 09:22 CET | News

Electronic payments contributed $C 107 billion to the Canadian economy since 1983, accounting for nearly 25 percent of Canadas cumulative economic growth according to a just released study entitled, "The Benefits of Electronic Payments in the Canadian Economy."
Commissioned by Visa Canada and conducted by leading economic consulting firm Global Insight Inc. the research study quantifies for the first time, the impact of electronic payments on the Canadian economy. The study found a strong link between payment system efficiencies and economic growth. Merchants and financial institutions can process and settle transactions more efficiently, reliably, and securely in an electronic payment system, thanks to lower payment system and infrastructure costs and greater economies of scale. These efficiencies can be as much as one percent of the value of goods and services produced. The research also found that $C 60 billion of growth in personal spending by Canadians over the past twenty years is directly attributable to electronic payments. Credit cards accounted for more than 82 percent of this growth, while debit cards accounted for just over 17 percent. Through electronic payments, purchases can now be made any time, anywhere, using any type of device. Electronic payments enable international travellers or online shoppers to purchase goods from Canadian businesses. The study shows that international Visa cardholders purchased $C 5.2 billion of merchandise from Canadian businesses in 2003. Despite continued growth in credit card spending, Canadians continue to manage their finances responsibly. Visa research shows that more than two-thirds of Canadian credit cardholders pay off their balance all or most of the time. Bankcard credit card debt represents 6.1 percent of total Canadian household debt, and Canadian bankcard 90-day delinquency rates continue to trend downward. The electronic payment system is vital to promoting growth in todays global, digital economy. This positive economic impact can best be sustained by bringing innovative new payment technologies into the mainstream marketplace including payment cards with chip technology, secure wireless payment technologies, and alternative payment devices like mobile phones. Interestingly substituting cash and cheque with electronic payments has historically proven difficult in many countries, even in the developed world. While card adoption and use varies dramatically across countries, Canada leads the world in card adoption and utilization.

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Categories: Payments & Commerce | Payments General
Countries: World
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Payments & Commerce


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