Small frictions, big payoffs

In mature payments markets, the biggest gains no longer just come from expanding basic access. They also come from making everyday transactions faster, safer and more reliable. Our latest report, commissioned by Google, shows how small reductions in payment friction, repeated across billions of transactions, can add up to a material contribution to GDP.

The findings are based on new research combining bespoke consumer and business surveys across six European markets with economic modelling designed to estimate how improvements in payment performance translate into wider economic value. Full details of the methodology are provided in the accompanying report.

Digital payments are now part of the basic infrastructure of the modern economy. For consumers, they shape whether a purchase feels quick, trusted and effortless. For businesses, they can increase conversion rates and sales by helping more transactions complete successfully, reduce the number of failed payments, lower exposure to fraud, ease staffing pressures through more efficient payment handling, and reduce the time and cost of back-office administration, including payment reconciliation and processing. Those effects can appear minor when viewed one transaction at a time. But multiplied up to the scale of a whole economy, they become significant.

That is the central finding of our new report on the economic value of Google Pay in the EU and UK:

• Drawing on new consumer and business surveys, the analysis suggests that these services contributed around €20bn to combined GDP in 2025, rising to over €30bn in 2030 (in today’s terms) as adoption and transaction volumes grow.
• Put differently, every €100 transacted through Google Pay is associated with roughly €13 of additional value added across the EU and UK economies.
• The relative contribution is particularly strong in the UK, consistent with its high online spending and earlier digital adoption patterns.

Where the economic value comes from

The economic value is not driven by a single breakthrough effect but comes from multiple, reinforcing mechanisms operating across both in-store and online payments: faster authentication, fewer payment failures, lower cart abandonment, lower fraud and chargeback costs, and reduced administrative burden for merchants. Around half of the GDP impact comes from incremental sales and around half from cost efficiencies and productivity gains.

That split matters because it shows that secure digital payments are not just consumer conveniences. They are part of the operating infrastructure of day-to-day business activity. They affect whether initiated purchases complete, how much staff time is absorbed by payment handling, and how much cost and risk sit around the transaction itself.

This is especially relevant in mature markets such as the EU and UK. In these economies, the next phase of value creation in payments is less about moving people from no access to access, and more about improving performance within systems that are already heavily used. Reliability, speed, security and lower operating burden become economically important because they shape outcomes repeatedly, every day, across huge numbers of transactions.

Our survey evidence points clearly in that direction. Consumers reported several benefits, including:

• Materially higher confidence when using these services, especially in higher-friction situations such as when buying from a business for the first time.
• More than 80% reported greater confidence when using the Google Pay button online in those circumstances.
• They also perceived payments to be substantially faster – on average, 28 seconds faster in-store and 26 seconds faster online than their preferred alternatives.

Businesses reported complementary effects:

• After integrating Google Pay, 56% of online businesses in the survey reported fewer payment declines.
• Around a quarter reported lower cart abandonment.
• And a significant share reported lower fraud-related compliance costs and reduced operating costs after offering Google Pay.

The report also distinguishes between GDP and the wider value experienced by users. Convenience, confidence and multifunctionality matter economically, but do not always appear in measured output. So the report separately estimates consumer welfare, finding an aggregate EU and UK consumer surplus of around €5.4bn in 2025.

The economic benefit at scale

For the EU and UK economies, the important point is not that any single payment is transformed, but that small improvements in speed, reliability and security are repeated across billions of transactions. At that scale, reducing payment friction can mean more completed purchases, lower operating costs, stronger business performance and measurable gains in economic output.

Read our full report for the evidence behind these findings.

This blog was written by Surjinder Johal (Director), Patricia Pinto e Filipe (Director), Alonso Barnechea (Consultant) and Andy King  (Specialist Partner).

Flint's experienced economic modelling team applies rigorous analytical methods to help clients understand complex markets, assess policy options, and quantify the impacts of strategic and regulatory decisions. Our economists design models tailored to client needs – from scenario and risk analysis to full macroeconomic and sectoral impact assessments – delivering clear, evidence-based insights to inform strategy and investment.