For every retailer, accepting card payments brings a few major benefits, including improved cash flow, security and customer access. While direct perks like these often motivate individual businesses to adopt an electronic payment program, new research shows that the proliferation of electronic payments can have a massive impact on the national economy as a whole.
When consumers opt to pay electronically, whether online or in person with a card, both they and the retailer are rewarded with convenience. Shoppers don't have to visit the bank as often to restock on cash, and never have to worry about delaying a purchase because their wallet is empty. Plus, they're able to buy the products they want without experiencing the pain of parting with their cash. On the other side of the transaction, electronic payments help retailers cut processing times, boost security and expand into global markets. With these benefits reducing friction and improving efficiency across the board, having an electronic payments system has been a major boon to the U.S. economy, according to a study from financial and economic analysis firm Perryman Group.
"Electronic payments paved the way for $1.76 trillion in U.S. economic growth."
Compared to the U.S. economy if no such system existed, electronic payments paved the way for an additional $1.76 trillion in U.S. economic growth and almost 23.2 million permanent jobs in 2014, the Perryman Group Study found. These staggering statistics suggest the efficiency of electronic payments increased the size of the U.S. economy by 12 percent and provided a 20 percent increase in employment.
"In short, the electronic payment system enhances efficiency by making payments faster and easier," Dr. Ray Perryman, President and CEO of The Perryman Group, said in a release. "As a result, consumer spending has been enhanced, production has been facilitated, and the economies of the US and every state have been able to grow at a faster pace than they would have otherwise."
Despite these dramatic results, more than half of all transactions from micro, small and medium retailers globally - amounting to about $19 trillion - are performed with cash, according to research from The World Bank Group and the World Economic Forum. If fledgling companies like these are able to take advantage of electronic payment programs in their home countries, they could see similar economic growth stem from the increase in efficiency.
At Vantage, we're experienced in helping merchants determine which payment processing solutions are right for their business models. Contact us today to learn more about our solutions, ask a question or schedule a consultation.