News & Views - Savantor

Card spend isn’t just good for issuers

Thursday, 14 February 2013

According to a recent study the increase in the use of credit and debit cards stimulates economic growth. A survey conducted by independent provider of economic forecasting Moody's Analytics, on behalf of Visa, shows that USD 983 billion has been added to the GDP in 56 countries between 2008 and 2012, as a result of the growth in the use of credit and debit card payments. The same source unveils that card usage makes the economy more efficient, leading to an economic growth, year after year, through a multitude of factors including transaction efficiencies, consumer access to credit and consumer confidence in the payment system overall.

Results indicate that increases in card consumption have contributed to an average additional growth in GDP of 0.17 percentage point per year during the period under review. Over the same time period, GDP has risen by an average of 1.8 percentage points. Card usage in the US has increased GDP by 0.3%, adding USD 127 billion to the economy. In some countries, card usage has increased consumption significantly, China by 4.89%, Chile by 1.28% and Brazil by 1.15%.

Card spend is also helping charities as the Co-op have shown. In 2012 the Co-op raised £1,250,659 through the 15 charity credit cards available. If Visa forecasts prove accurate then it looks like a good year ahead for card spend particularly if the long awaited impetus from contactless finally arrives. Visa predicts their contactless card numbers for the UK this year will reach 34 million (70 million across Europe) and contactless terminal numbers for the UK this year will reach 175,000 (650,000 across Europe).

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