Relying on digital payment modes like cards and mobile payments could save nearly $470bn per annum across the 100 cities, which is about 3% of the average GDP for these cities, according to a study by Visa.
The study, “Cashless Cities: Realizing the Benefits of Digital Payments”, carried out by Roubini ThoughtLab and commissioned by Visa analysed the economic impact of increasing the use of digital payments in major cities worldwide.
The study estimated that relying more on electronic payments and decreasing dependency on cash can provide immediate and long-term benefits for three main groups, such as consumers, businesses and governments.
Visa said that consumers across the 100 cities, which were analysed in the study, could gain approximately $28bn per annum in estimated direct net benefits.
The benefits could be derived from factors including up to 3.2 billion hours in time savings, which was used to conduct banking, retail and transit transactions, besides reducing cash-related crime.
Moreover, electronic payments will enable businesses across the 100 cities to save over $312bn annually in estimated direct benefits from 3.1 billion hours in time savings processing incoming and outgoing payments and increased sales revenues.
The study revealed that accepting cash and cheques costs businesses 7.1 cents of every dollar received against 5 cents of every dollar collected from digital sources.
Furthermore, governments across the 100 cities could achieve about $130bn per year in estimated direct benefits from increased tax revenues, boosted economic growth, cost savings from administrative efficiencies and lower criminal justice costs due to reduced cash-related crime.
Visa vice chairman and chief risk officer Ellen Richey said: “This study demonstrates the substantial upside for consumers, businesses and governments as cities move toward greater adoption of digital payments.
“Societies that substitute digital payments for cash see benefits from greater economic growth, less crime, more jobs, higher wages, and increased worker productivity.”