Why We Do What We Do
Debit and credit cards are not just a convenient way to pay; they play a much bigger role in stimulating economic growth globally. First, let’s take a quick look at the history of money in general.
The first known currency was created in Lydia (now part of Turkey) in form of coins in 600BC. The coins were stamped with pictures to show denominations. Money increased the speed of doing business and fueled the economies that accepted money as a medium of exchange. Money allowed people to understand the real price of goods and be able to store wealth and save for larger purchases in the future. Having an official currency allowed Lydia to significantly increase their internal and external trade and become one of the wealthiest empires of its days.
Europe used coins for up until 1600 when coins started to get replaced by banknotes. Electronic payments are a relatively recent thing in human history. The first widely used service for wire transfers was launched by Western Union in 1872 on its existing telegraph network. One of the first credit cards was issued by American Express in 1959.
Cash-operating economies tend to grow slowly and experience many setbacks along the way. Making it simple to securely send and receive funds is the key to help the economies grow. The consumption cycle speeds up increasing the demand, creating new jobs and new business opportunities.
Here are a few things that the electronic payments industry does:
- It boosts buyer’s confidence giving consumers peace of mind to spend their money. Products and services purchased using credit cards include fraud protection and warranty.
- It creates trust by verifying buyers and sellers to make sure the majority of them are legitimate.
- It helps merchants increase sales. Most people don’t carry the exact amount of cash they need on a specific day. Unplanned purchases contribute to higher expenditure as shoppers don’t have to go to the ATM to get cash to purchase an additional item at the store.
- It provides instant loans in form of funds available on the credit card. Most people get paid on a bi-weekly basis and an unforeseen expense can burn a hole in their pocket. But with credit cards available, one can easily pay and put the money back on the next pay cycle.
- It helps reduce the cash-related fraud and significantly reduce the number of unreported transactions by creating an electronic trace.
- It helps keep the merchants safe. If there’s little or no cash in your cash registry, your business might not be worth robbing.
- According to Moody’s Analytics, electronic payments added $296 billion in real (U.S.) dollars to GDP in the 70 countries studied between 2011 and 2015. That is equivalent to the creation of about 2.6 million jobs on average per year over the five-year period in the 70 countries.
Payment companies change lives around the world! They create new jobs, prosperity and help the communities take care of their families. We are very proud to be a part of something bigger than ourselves.