UAE experienced over a six percentage point increase in card usage, said the study, conducted by Moody's Analytics and commissioned by Visa.
Increased use of electronic payment products, including credit, debit and prepaid cards, added $3.7 billion to the UAE's GDP in five years while across 70 countries the impact helped add $296 billion to the economies, a study has found.
The UAE recorded a 0.23 per cent increase in GDP due to increased card usage during the five-year period (2011-2015) studied. Increased electronic payment usage created the equivalent to an average of 14,170 jobs in the UAE per year between 2011 and 2015.
Like the other notable markets, UAE experienced over a six percentage point increase in card usage, said the study, conducted by Moody's Analytics and commissioned by Visa.
In Saudi Arabia, increased electronic payment usage added $3.43 billion to the country's GDP from 2011 to 2015 while Egypt recorded $10 million addition to its GDP in five years.
The study said the use of electronic payment products also raised household consumption of goods and services by an average of 0.18 per cent per year.
In addition, Moody's economists estimate that the equivalent to 2.6 million new jobs was created on average, annually, over the five-year period as a result of increased use of electronic payments. The 70 countries in the study make up almost 95 per cent of global GDP.
Moody's found that every one per cent increase in usage of electronic payments across the 70 countries in the study could produce, on average, an annual increase of approximately $104 billion in the consumption of goods and services. "Assuming all future factors remain the same, this could result in an annual average increase of 0.04 per cent to GDP attributable to card usage," said the study.
"Electronic payments are a major contributor to consumption, increased production, economic growth and employment creation," said Mark Zandi, Chief Economist, Moody's Analytics. "Those countries which saw large increases in card usage also saw larger contributions to overall growth in their economies."
Findings from the study were shared in the report, "The Impact of Electronic Payments on Economic Growth," which also indicated that the electronification of payments benefited governments and contributed to a more stable and open business environment.
Electronic payments also helped to minimise what is commonly referred to as the grey economy - economic activity that is often cash-based and goes unreported. As a result, electronic payments provided a higher potential tax revenue base for governments, while also bringing the added benefits of lower cash handling costs, guaranteed payment to merchants and greater financial inclusion for consumers.
"These findings reinforce the many positive benefits that electronic payments bring to local economies all over the world," said Charlie W. Scharf, chief executive officer, Visa. This research also suggests that the right public policies can create an open, competitive payment environment, and contribute to economic growth and job creation."
During the five-year period, real consumption grew at an average of 2.3 per cent, 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 also have more to gain by increasing card usage.
Countries with the largest increases in card usage experienced the biggest contributions in growth. For example, big increases in GDP were recorded in Hungary (0.25 per cent), the UAE (0.23 per cent), Chile (0.23 per cent), Ireland (0.2 per cent), Poland (0.19 per cent) and Australia (0.19 per cent). In most countries, card usage increased regardless of economic performance.
Increased card usage added the equivalent to almost 2.6 million jobs on average, per year, across the 70 countries sampled between 2011 and 2015. Notably, the two countries with the greatest average job increases were China (427,000 jobs added) and India (336,000 jobs added), which both had large gains in employment due to the combination of fast growing labor productivity and increased card usage.