3 ways digital payments can support sustainable economic growth
January 17th, 2020 – Five years ago, every member of the UN agreed to work in partnership with the private sector to achieve the 2030 Agenda for Sustainable Development. As a global payments network with infrastructure that operates in 200 countries and territories, we believe Visa has a role to play in supporting the UN’s agenda for sustainable development. Here is how:
1. Sustainable cities and communities
According to the UN Population Report 2018, the population shift from rural areas could mean another 2.5 billion people are living in urban centres by 2050, with 90% of this increase taking place in Asia and Africa.
The emergence of megacities is well documented; the world is projected to have 43 cities with a population of more than 10 million by 2030. The results of this growth could have devastating effects on the health of our cities. By 2040, transport emissions are projected to make up one-third of global emissions. In these scenarios, public transport is vital to maintaining liveable, workable cities that can thrive. For a city’s domestic economy, offering commuters a seamless, quick, and efficient door-to-door journey will be critical; for tourism, making the experience of visiting the city welcoming and easy to navigate will be a priority.
Digital payments, such as credit and debit card payments processed by open networks and based on global acceptance standards, can help cities connect all forms of transportation – buses, trains, metros and ride-sharing services, but also tolls, bridges, parking and electric vehicle charging points. Digital payments can also give cities the information they need to meet the increasing demand for public transportation, and to reduce congestion while improving the lives of millions of their inhabitants. They provide critical insights to transit operators, such as what nationalities most frequently visit their city and what languages they speak; it also helps them plan routes and make more informed infrastructure investments. We are seeing some evidence, for example, that locating electric vehicle charging points near community areas and shops supports business growth in those areas.
Positive change takes an ecosystem, however, and we are seeing good examples of partnerships emerging. London, New York and Hong Kong are examples of large urban centres in which the partnership between local government, banks and open payment networks is supporting sustainable growth and offering a more seamless journey for millions of tourists and commuters.
2. Gender equality
Women power economies around the world – inspiring and making an impact as household leaders, small business owners and entrepreneurs. Yet women are universally underpaid, underrepresented and face many barriers, such as access to formal financial services. The World Bank reports a staggering $300 billion annual credit deficit for women-owned small and medium-sized businesses. Without capital, it is nearly impossible to start and sustain a business. Yet when women-owned micro and small businesses thrive, their livelihoods improve, and they reinvest in their local communities. This is why Visa created the She’s Next initiative, and is partnering with the International Trade Center (ITC) on the She Trades initiative.
3. Responsible consumption
Evidence suggests that consumer behaviour is shifting toward a preference for sustainable consumption. For example, digital payments data suggest that consumers in the Nordics are responding to the call to action to protect the planet by taking fewer flights. This aligns with data from Swedavia, which operates 10 airports in Sweden, that registered a decline in passenger numbers in 2019. There also is evidence that consumption in the US is changing; sales of sustainably-marketed consumer-packaged goods in the US have grown more than five times faster than traditionally-marketed goods, according to the Sustainability Market Share Index by the NYU Stern Center for Sustainable Business.
Written by World Economic Forum
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