A new Visa-commissioned study suggests that cities moving to a cashless economy could yield a savings of three percent of their GDP each year.
Conducted by Roubini Thoughtlab, the analysis does rely on some educated guesswork. The research firm surveyed 3,000 consumers and 900 business across Bangkok, Chicago, Lagos, Sao Paolo, Stockholm, and Tokyo in 2016, analyzing the payments landscape in each area; then, data from this research was extrapolated to 94 other cities in an attempt to predict the large-scale impacts of economic digitization. What the researchers found was that if these 100 major cities all moved more or less completely to digital money, it could yield a savings of $470 billion per year.
For consumers, that could mean $28 billion in “direct net benefits”, according to a report from Visa, from things like saving time from trips to the bank and a reduction in cash-based crime. Businesses, meanwhile, could save “up to 3.1 billion hours” and $312 billion per year; and governments would see $130 billion in benefits related to economic growth, efficiencies, reduced crime, and so on.
The study arrives hot on the heels of another Visa-commissioned report that found Europeans quickly warming to mobile banking and payments, a sign that some of the benefits outlined in the Roubini Thoughtlab study are already on their way to European cities. And with new mobile payment services backed by more sophisticated security systems continuing to emerge, the trend toward digitization shows no signs of slowing down.