07 Feb Africa: Cashless cities could benefit from 3% rise in GDP
A global report commissioned by Visa has listed Johannesburg, Durban and Nairobi as cities that stand to benefit from the broad use of cashless payments.
The report Cashless Cities: Realising the Benefits of Digital Payments by research firm Roubini ThoughtLab said that cities that adopt cashless payments could realise a 3% average growth in GDP from 2017 to 2032.
The report covered 100 cities and quantified the net benefits, not necessarily in terms of income, for those regions in the process of growing their cashless system.
According to the research government and business would benefit the most from cashless systems. Total business net impact could accrue to US$312 billion while governments would achieve US$130 billion benefit.
The Report found that Nairobi, categorised as a Digitally Transitioning city, could net US$674.6 million in benefits from 2017 to 2032 in its use of digital payments. The net impact on GDP would be 3.3% and this would generate around 79,400 jobs within that period.
Johannesburg, categorised as a Digitally Maturing city, would see a net impact of US$3.3 billion, achieve an additional 4.4% on GDP and generate 19,300 jobs. Durban, also a Digitally Maturing city, would have US$1.3 billion in net impact, grow the GDP by an additional 4.9% and create 8,500 jobs.
For Lagos, which is cash centric, the switch to digital payments could boost their net gain to US$2.7 billion.
The report stated that a cashless economy could help governments increase savings from efficient systems, source better quality data on the needs of citizens and lower the cost of managing cash.
This will in turn increase revenue on tax. For businesses, efficiency and being able to track transactions could improve their trade.
“The use of digital technologies – from smart phones and wearables to artificial intelligence and driverless cars – is rapidly transforming how city dwellers shop, travel, and live,” said Lou Celi, Head of Roubini ThoughtLab. “Without a firm foundation in electronic payments, cities will not be able to fully capture their digital future, according to our analysis.”
Source: IT Web Africa