E-payments add Dh15.4bn to UAE economy

Growth in the use of electronic payment products, such as credit and debit cards, added approximately $4.2 billion (Dh15.4 billion) to the UAE economy between 2008 and 2012, according to a study conducted for Visa by Moody’s Analytics, a leading independent provider of economic forecasting.

It added around $18 billion (Dh66 billion) to the economies in the Middle East and Africa [MEA] region between 2008 and 2012.

The study of 56 countries, including the MEA, that represent 93 per cent of global GDP, concluded that “card usage makes the economy more efficient, yielding a meaningful boost to economic growth.”

In absolute terms, the growth in the use of credit and debit cards added $4.2 billion to the GDP of UAE, $4.7 billion to GDP of Saudi Arabia, $7.8 billion to GDP of South Africa, $1.2 to GDP of Kuwait and $0.4 billion to Qatar’s GDP between 2008 and 2012, the study said.

Globally, electronic payments contributed $983 billion to the GDP of the 56 countries examined in the four-year period. Over the same time, GDP in those countries grew by an average of 1.8 per centage points.

“With growing card usage contributing $4.2 billion to the GDP of UAE and approximately $18 billion to the economies in the region, there’s no denying the benefits of electronic payments here, or the importance of maintaining an open marketplace to encourage competition and innovation within the industry. We can see from the data that the positive impact in economic growth is a direct result of card usage and is tied to the benefits electronic payments offer, including enhanced security, convenience of operating without cash or checks, increased efficiency at checkout and a reduction in the grey economy,” said Kamran Siddiqi, Visa General Manager for Middle East and North Africa.

He said: “We are excited about the prospects of increasing electronic payments in the UAE and beyond through new, innovative solutions, and we look forward to working with local businesses, governments and industry stakeholders to continue to expand and support local economic growth.”

“Despite a challenging global economic landscape, the increasing penetration of payment cards helped increase consumer consumption and on average, added to GDP,” said Mark Zandi, Chief Economist of Moody’s Analytics. “The increase in consumption parallels the growing popularity and accessibility of electronic payments among global consumers. At the same time these findings point to the need for governments to adopt policies that encourage the shift to efficient and secure electronic forms of payments.”

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