The impact of cashless payments on economic growth in Azerbaijan

Our aim is to prove relationship between electronic payments and overall economic growth in Azerbaijan. Using data from Azerbaijan markets over the period 2008–2015, the results confirm that migration to efficient electronic retail payments stimulates overall economic growth and consumption. In this paper, among payment instruments, only payment cards have been used for measuring the impact on economic growth. Retail payment transaction technology itself is also associated positively to real economic aggregates. We also show that initiatives to integrate and harmonize retail payment markets foster consumption and thereby have a beneficial effect for whole economy. Additionally, the findings reveal that the impact of cashless payments on economic growth is more pronounced in Azerbaijan. Our findings are robust to different regression specifications. The study supports the adoption of policies promoting a swift migration to efficient and harmonised electronic payment instruments in Azerbaijan.