Countries that prioritize digitized payment economies are better placed to mitigate the associated adverse impact of unemployment, financial exclusion, fraud, theft, cost of cash, and corruption.

These were the findings of a new Mastercard white paper titled ‘Cashing Out: Economic Growth through Payment Digitization’.

In an analysis that demonstrates the high economic cost of cash prevalence, the report estimates that cost to be at 3.2 percent to 4.5pc of global GDP. The report was of the view that this points to an opportunity for countries to increase GDP by growing a digital payments economy to benefit from access to jobs, more robust commercial activity, streamlined business loans, and the reduced cost of operating cash.

The white paper also revealed that higher card use in 70 countries, representing 90pc of the world’s GDP, contributed an additional $296 billion to consumption. The study found that each 1pc increase in use of digital payments produced an average annual increase of $104bn in the consumption of goods and services, representing a 0.04pc increase in GDP in developed markets and a 0.02pc increase in developing ones.

The white paper found that cash still represents almost 85-90pc of all consumer transactions globally. Both governments and businesses incur indirect costs due to cash dependency, including a loss of incremental revenue, as well as more security and insurance costs.

“It has been encouraging to see the impact of our work and the success of our methodology. By engaging governments primarily on a strategic level to make the right recommendations, and ultimately providing the needed solutions to develop their digital payments economies, we are helping pave the way to economic growth and citizen well-being. The white paper highlights how all these positive outcomes connect together,” said Elias Aad, Vice President and Head of Government Business – MENA at Mastercard.