While today’s trend in big banking seems to be cutting costs through layoffs — relying instead on technology to meet the growing demand of digital consumers — one study has shown the impact the electronic payments system has had on the U.S. economy.
A new study from the Perryman Group shows that the electronic payments system has not only spurred faster payments, but it has also created more than 23.2 million jobs since 1970.
The study, “The Electronic Payment System: An Assessment of Benefits for US and State Economies,” takes an in-depth look into the electronic payments system since it started. The results indicated that the system has boosted the U.S. economy size by more than 12 percent (gross product), and boosted personal consumption expenses by almost 17 percent. Employment has seen a 20 percent boost as a result, creating business activities worth $1.76 trillion in gross product, the study reported.
“Most people will be familiar with the direct benefits of electronic payments; merchants benefit from increased sales and business efficiencies, and consumers benefit from the convenience and safety of credit and debit cards. Less well-understood are the wider benefits that electronic payments have brought to our economy. Our report lays out these benefits,” wrote Dr. Ray Perryman, the author of the study.
The electronics payments system study was commissioned by MasterCard, and while it reviewed the system for the past 45 years, it provided specific attention to the past decade between 2004-2014. During that timeframe is when there was a significant increase in electronic payments — due to the increase in eCommerce sales.
In fact, figures from that decade show that business activities were worth $432.927 billion in gross product and generated nearly 5.7 million jobs in the U.S.
“The report shows that electronic payments are highly efficient, offering advantages such as speed, reduced costs, and accuracy,” Perryman wrote. “Our model has allowed us to quantify this and express the benefits in stark terms – the effect on gross product and the number of jobs created.”
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