It is one of my pet topics. The fact that converting cash into e-payments directly lead to an uplift in the macro economy of a region. I have blogged about this previously (Read here), but feel so strongly about it that a recent report (commissioned by Visa) made me think about this again. The main finding of the report was that almost a quarter of the GDP growth in Canada can be directly attributed to growth in e-payments. (Read here). The assumption of the report is that e-payments lead to an acceleration of payments. Money arrive in wallets faster and can then be spent faster. This acceleration directly increase the total value spent over a given period, which (in turn) leads to higher economic activities.
Other secondary benefits of a reduction in cash, towards a auditable e-payments are (virtual) elimination of counterfeiting, a reduction in fraudulent transactions, lower operating costs of the overall payment eco-system, more efficient collection of statistics about the payment system and a more efficient collection of tax. All of the above can also contribute to growth in the economy.
The case for "electronifying" cash payments because of the beneficial impact on macro-economic indicators are staggering. By enabling an environment where cash payments are reduced, governments will benefit all.
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