Why are Digital Payments a key element of digital transformation?

Date: 5 Jul 2023

Digital payments are an essential part of a comprehensive urban digital transformation and resilience strategy, by embedding the ability for city governments and programs to make and receive payments simply, securely, and transparently.

The benefits of digital payments include

Creating financial and process efficiencies for city programs.

Reducing vulnerabilities associated with physical cash or checks in times of crisis.

Fostering prosperity and inclusion, by increasing financial access among populations traditionally excluded from the banking system.

Improving access and interaction for people and small businesses with the public sector.

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The public sector can strengthen trust between residents, businesses, and government institutions by increasing transparency and reducing fraud. It can also foster innovation—helping small businesses and start-ups gain credibility with their products or adopt new technologies to improve public sector services.

Through all of this, governments have a compelling chance to foster prosperity by creating an environment that helps individuals, businesses, and key economic sectors to thrive.

$470B per YEAR

Total potential net benefits from digital payment to 100 cities

CITIZENS

Time savings in banking, transit and retail transactions
Savings from avoidance of late payment fees
Improved budgeting and expense tracking
Better data to build credit profiles

$28B

BUSINESS

Reduced theft and piferage
Labor time savings
Savings from reduced float times
Potential for sales through digital medium
Better data to improve customer experience

$312B

GOVERNMENT

Increased tax revenues from recaptured informal economy
Smart cities to enhance quality of life for citizens
Toll road and transit agency cost savings
Better tracking of movement of money

$130B

Note: Survey conducted in 2017 across 100 cities segmented by different states of digital maturity and then modelled to adopt “achievable levels of cashlessness” where population will move to usage of digital payments equal to top 10% of users in that city today.

Source: Visa, Cashless Cities: Realizing the Benefits of Digital Payments, 2017