Social Value of Payments Technology Innovation

This report presents research findings on the social value of payment technology innovations, specifically focusing on tokenization and contactless payments. The study quantifies the benefits these technologies provide to consumers, merchants, and the innovators behind them, such as Visa and Mastercard. It highlights significant advantages, including reduced fraud rates, increased authorization rates, and decreased cart abandonment, leading to substantial time savings for users. The report also calculates the social internal rate of return (IRR) for these technologies, revealing that the social benefits exceed those accruing to the private sector. For instance, the social IRR for contactless payments is 39%, compared to Visa's private IRR of 26%. The findings underscore the transformative potential of payment technologies and the need for further research to fully understand their societal impacts, which can guide future investments in innovation and economic empowerment.