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13 December 2011Gareth Lodge
There have been many discussions about the link between GDP and the use of electronic payments. I recently spoke at the Future of Cash conference in Frankfurt, and created some charts to show actually that cash is still the dominant payment type, at least by volume. I’ve extracted part of that chart below. It shows a selection of countries, ordered by their total non-cash payment volumes in 2010. The chart shows the volume of those payments, on a per capita basis. It’s very interesting that there is a clear split. The “rescuers” – France, Germany, UK – have high volumes per capita. With the exception of Ireland, all those countries we are concerned about have below average per capita payments. Now we all know that we can make numbers sing and dance and tell any tale we want. Indeed, 63.2% of all stats are made up on the spot. Including this one :-). But we may have a once in a lifetime opportunity to try and correlate the connection between electronic payments and GDP better than ever before. As part of the recent austerity measures, Monti, the new Italian Prime Minister has banned, with immediate effect any payment in cash over €1000. ABI, the Italian Banking Association, estimates the economy loses €10 billion every year from increased security and labor needed to process cash transactions. More importantly though are the estimated €100bn in lost taxes every year. Now, there are plenty of other measures being introduced and so a scientific link can’t be proved, but I’ll certainly be watching with interest to see what we can derive.
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