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  • Writer's pictureAIM Team

Economic analysis: Jobs and GDP grow because of electronic payments

“The Electronic Payment System: An Assessment of Benefits for the US and State Economies”

Master Your Card is a community empowerment program sponsored by MasterCard that builds on-the-ground relationships, seeks input, works collaboratively on innovative solutions and provides education about how people, businesses and groups can get the most from their money through the smart use of electronic payments.

As part of the effort to highlight the value of electronic payments, Master Your Card would like to direct attention to a new study by The Perryman Group, which finds that electronic payments have dramatically increased the flow of money between consumers and businesses, contributing hundreds of billions of dollars to the GDP, generating millions of American jobs and setting the stage for stronger economic growth. Full results are available at

Electronic payment technology creates growth through two fundamental economic principles. First, reducing the cost of transactions provides an incentive for participants in an economy to engage in transactions more frequently. Second, the “equation of exchange” defines the total volume of activity that an economy can support as the quantity of money multiplied by its turnover rate (velocity). In layman’s terms, advances in electronic payment technology have reduced the cost of transactions and enabled more transactions, thereby stimulating the economy and encouraging growth.

Advances in electronic payment technology have created significant economic growth because consumers and businesses can move money faster and with more confidence—with ever increasing access and use of the technology.

  1. The Perryman economic analysis finds that this increased speed of payments is responsible for generating 5.7 million American jobs and $432.9 billion in GDP over the past decade.

  2. The benefits are universal across the country—job creation and economic activity have taken place in all 50 states as consumers and businesses buy and sell with greater confidence and convenience.

  3. Instantaneous access to funds combined with consumer fraud protections and payment guarantees accelerated economic activity for businesses, which creates real growth.

  4. Economic growth is further accelerated by increased access and use of electronic payment technology—cards increased their share of non-cash payments, from 43% in 2003 to 67% in 2012 (per the Federal Reserve).

  5. Advances in payment technology have increased consumer spending by almost 17% since 1970.

  6. Electronic payment technology is a prerequisite for the entire E-commerce field, which speeds up payments, increases safety and produces greater economic growth.

  7. In addition to moving money faster and with greater certainty for both businesses and consumers, electronic payments increase the confidence of sellers and buyers because it gives them more options. Businesses can find customers without in-person meetings and consumers can find goods and services outside of their neighborhoods.

Businesses directly benefit from the advances in payment technology beyond gains acquired through economic growth.

  1. Electronic payments have reduced transaction costs by about 50% when compared to cash transactions.

  2. Businesses receive immediate access to funds that help them do more business.

  3. In addition to speed and liquidity, businesses acquire more customers and improve the security of their money and transactions.

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