India’s 4 metros can gain $7.2 bn/yr on digital payment boost
Four metro cities of Delhi, Mumbai, Bangalore and Chennai can reap benefits of USD 7.2 billion annually by increasing payments through digital means, says a study report by global financial services major Visa.
The study conducted by Roubini ThoughtLab and commissioned by Visa examined the economic impact of increasing use of digital payments in major cities around the world including these four Indian cities.
“The study estimates that relying more on electronic payments, such as cards and mobile payments, could yield a net benefit of up to USD 470 billion per year across the 100 cities studied–roughly equivalent to 3 per cent of the average GDP for these cities,” Visa said a release.
Mumbai, with a population of 19,547,000 and GDP of USD 104.1 billion, could gain USD 2.9 billion annual net benefits. Delhi can gain USD 2.2 billion (GDP USD 74.4 billion); Bangalore USD 1.3 billion (GDP 44.7 billion) and Chennai can realise benefit of USD 0.8 billion (GDP 30.9 billion), it added.
“Increased use of digital payments could potentially save time for consumers and businesses, reduce cash related crime, increase business sales, bring about greater efficiencies, and increase tax revenues for governments,” said T R Ramachandran, VISA group Country Manager for India.
He said a greater adoption of digital payments could boost stakeholders productivity by reducing the amount of time spent on payment related activities.
“This boost can act as a catalyst to further economic activity, increasing GDP growth, creating additional jobs and further bumping up wages and productivity—catalytic impacts.”
As cities increase use of digital payments, the positive impacts can extend beyond financial benefits to consumers, businesses, and government, said the study.
The shift to digital payments also may have a catalytic effect on the city’s overall economic performance, including GDP, employment, wage, and productivity growth, it added.
Lou Celi, Head of Roubini ThoughtLab, said: “The use of digital technologies—from smart phones and wearables to artificial intelligence and driverless cars—is rapidly transforming how city dwellers shop, travel, and live.”
However, without a firm foundation in electronic payments, cities will not be able to fully capture their digital future, he added.
Economics and evidence-based research firm Roubini ThoughtLab surveyed 3,000 consumers and 900 businesses across six cities –Tokyo, Chicago, Stockholm, Sao Paolo, Bangkok and Lagos– in 2016, representing different levels of digital payments maturity.
The surveys examined use, acceptance and cost-benefit impact of physical and digital money and extrapolated these survey results based on specific demographic and economic data to another 94 cities around the world.