2017

Cashless Cities: Realizing the Benefits of Digital Payments with Visa

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With 60% of the global population expected to live in cities by 2030, how will going cashless enable a city to drive more value to citizens, businesses, and the government? To answer that question, VISA commissioned ThoughtLab to quantify the potential benefits of moving from physical money to digital payment systems in 100 cities around the world. After analyzing the cost-benefits of eschewing cash for each city stakeholder, our ThoughtLab team found that increasing digital payments could result in total direct net benefits of US$470 billion per year across the 100 cities. That boils down to about $4.7 billion in net benefits to each city per year—the equivalent to about 3% of each city’s average GDP.

Cashless Cities: Realizing the benefits of digital payments also found that these gains work in a virtuous circle to drive wider catalytic benefits for the local economy. Specifically, our analysis shows that the increased use of digital payments could add 19 basis points to a city’s GDP growth rate over the next 15 years—equivalent to nearly $12 trillion in additional economic activity.​

Our research methods included:

  • Conducting surveys of over 3,000 consumers and 900 businesses in six benchmark cities around the world.
  • Gathering supplemental data from the World Bank, the Organization for Economy Co-operation and Development (OECD), and other secondary data sources.
  • Categorizing, analyzing and benchmarking the degree of digital payment adoption across 100 cities.
  • Modeling the cost-benefits of moving to digital payment systems in 100 cities across 80 countries.
  • Applying the National Institute Global Econometric Model (NiGEM) to forecast the potential economic effects of going cashless.

Our findings were conclusive: no matter where they are on the digital payments maturity curve, cities will reap many benefits from reducing their use of cash. To help city leaders realize these benefits, the report provides targeted areas for improvement and comprehensive calls to action.

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The Positive Impact of RURCBOG on the City of Camden

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Econsult Solutions, Inc. (ESI) generated the third of three reports in a series commissioned by The Rowan University/Rutgers-Camden Board of Governors (RURCBOG) to demonstrate the potential benefits and economic gains created by its efforts at both a local and statewide level. Collectively, these reports demonstrate the promise of RURCBOG to positively transform the Camden and New Jersey economies while serving as a good neighbor in the process.

In the first report, ESI outlined the importance of “Eds and Meds” as an economic engine for the City and State. The second report estimated the magnitude of this impact on the City and State economies and on their tax bases, and described why this impact matters for the City and State’s overall economic competitiveness. The third report took a closer look at how RURCBOG will benefit the residents of Camden through economic gains, employment and educational opportunities, along with the services and programs for local residents.

ESI discovered that the Board of Governors and its campus in downtown Camden will offer economic profit from construction and operations, educational and employment opportunities for local residents, as well as health and wellness services for the Camden community. In addition, this development will provide a range of needed resources and desired amenities for the surrounding community.

Based on these reports, ESI concluded that RURCBOG is not only a driver of economic competitiveness for the State of New Jersey as a whole, but also a beneficial presence in the immediate community in which it serves.

The Economic Impact of PHL International

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The Philadelphia International Airport (PHL) hired Econsult Solutions, Inc. (ESI) to study the direct and indirect regional economic impacts that can be attributed to PHL on an annual basis within the 11-county Philadelphia Metropolitan Statistical Area (MSA). PHL serves more than 30 million commercial passengers annually and offers approximately 500 daily flights to more than 120 national and international non-stop destinations.

Using a customized economic impact model based on IMPLAN’s input/output modeling system, ESI found that the direct and indirect economic activity associated with PHL annually produces $15.4 billion in output within the 11-county Philadelphia MSA, supporting 96,300 jobs and $4.8 billion in total earnings. These earnings have significant fiscal impacts for state government and for local jurisdictions, generating $78 million in annual tax revenue for the City of Philadelphia and $295 million in state tax revenues for the four states touching the Greater Philadelphia region.

The report shows that the benefits of this significant center of economic activity are shared equitably by local residents and firms, and by employees of color and disadvantaged business enterprises. Most employees reside in the Philadelphia region and are members of minority groups. Besides, PHL’s procurement policies promote diversity in its suppliers, ensuring that a significant proportion of vendor spending (22%) accrues to minority and women-owned firms.

Additionally, the airport’s extensive national and international network of air service connections through PHL allows regional residents to easily access destinations, saving them an estimated 200 million miles each year in travel distance relative to alternative airports in the region.

Beyond the businesses who directly serve airport passengers, a range of business activities that occur throughout the region and have an impact on the regional economy are dependent on the connections enabled by air service, and the Philadelphia region could not support the broad base of business activity critical to economic growth without the contributions of PHL. PHL is thus an essential quality of life amenity, as well as a vital economic driver for the Philadelphia region.

The Economic Impact of Greater Philadelphia Gardens

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Econsult Solutions, Inc. (ESI) was retained by Greater Philadelphia Gardens (“GPG”), a consortium of more than 30 public gardens, arboreta, historical landscapes and supporting organizations all located within a 30-mile radius of Philadelphia, to assess the economic impact of the organization on the Greater Philadelphia region.

In our study, we found that the collective economic footprint GPG has as employers and purchasers of goods and services is sizable and yields significant spillover economic activity. The public gardens have a pristine reputation amongst tourists and increase visitor attraction and spending from outside the region. The presence of these gardens throughout the local communities increases property values for surrounding the real estate markets.

The study also determined the total impact of the operations and visitation to GPG member institutions within the 11-county Philadelphia region is estimated at $256 million on an annual basis. The 30 gardens employ over 1,520 employees resulting in $79 million in total earnings.

Furthermore, the total economic impact of GPG member’s capital investment over the past three years within the 11-county Philadelphia region is estimated at $232 million. These investments support more than 1,400 jobs across the region and result in $96 million in total earnings.

Of the 30 gardens not all are the same and thus have different types of economic impact from regional and state benefit standpoints. The study found that there are destination attraction, local attraction, component of institutions, and industry advocate gardens. For example, destination attraction gardens bring in new visitor spending from outside the region which have a different economic profile than local attractions that rely on regional visitation and institutions that operate a discrete garden are different from those in which the garden is a larger component of a larger institution.

Our in-depth research showed that 29% of the 2.5 million annual visitors come from outside of the Philadelphia region, while 71% are from within the Philadelphia region. 43% of non-local visitors came to the garden(s) on a day trip while 32% visited the area for 2-3 days. The average amount of time was 3.4 days. This resulted in economic spillover into other tourism industries within the Philadelphia region such as hotels, restaurants, Air B&Bs, etc.

The Economic Impact of RURCBOG on the City of Camden and New Jersey

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Econsult Solutions, Inc. (ESI) produced the second of three reports in a series commissioned by The Rowan University/Rutgers-Camden Board of Governors (RURCBOG) to determine the potential economic gains of its efforts at both a local and statewide level. The initial report outlined the importance of “Eds and Meds” as an economic engine for the City of Camden and the State of New Jersey, while the second report estimates the magnitude of this impact on the City and State economies and on their tax bases.

For this report, ESI used IMPLAN, an industry standard input-output modeling software program, to generate economic and fiscal impact estimates. In addition to the input-output modeling, the report examined the impacts of similar national joint health science efforts to demonstrate that the approach taken by RURCBOG has successfully enhanced research efforts, educational experiences, and economic benefits of university partnerships.

An important way that RURCBOG will be contributing to the City and State economy is through its capital investments in creating both the Joint Health Sciences Center and the Healthcare Simulation Center. ESI discovered that through construction alone, the development of these two centers will generate approximately $122 million in economic impact, and $3 million in revenue for the State. Additionally, the centers will impact the Camden and New Jersey economies annually through employment, procurement, and the provision of educational, medical, and legal services.

Through this analysis, ESI determined that the State’s investments in RURCBOG have yielded a meaningful financial return. This is represented not just in the immediate and direct economic impacts they have produced, but also in the ways they have positioned the State for future economic competitiveness.