DigiPay4Growth: how digital payments can stimulate local and regional growth

DigiPay4Growth: how digital payments can stimulate local and regional growth

 

DigiPay4Growth, a project co-financed by the EU, aims at generating a new economic model in order to find a solution to the economic crisis that is affecting the Eurozone. The idea is to implement a new system of digital payments (DPS – digital payment system) through a business network, in order to stimulate local and regional economic growth.

The software produced, Cyclos, has been tested in four pilot regions: Britols, Sardinia, Catalonia and the Netherlands. As explained by the website, it creates a system where purchasing powers is “trapped” within a local system for a specific amount of elapsed time so to increase economic activity and provide more income for local businesses while it remains in a networked business of SMEs.

Cyclos channelled inflows of purchasing powers from different sources in order to finance the development of SMEs in the regional and local economy. The three-year project, partially funded under the ICT Policy Support Programme (ICT PSP) as part of the Competitiveness and Innovation Framework Programme by the European Community, involved 10,000 Small and Medium Enterprises (SMEs). Those SMEs circulated around EUR 34 million of digital payments.

Through the DPS, and by means of the Cyclos software, local and regional institutions optimized their revenues. SMEs could have more credit and consumers received bonuses if they supported local and regional SMEs.

In fact, the DPS worked on two different levels:

  • Conditioning (government) expenditures to positively increase of the local/regional multiplier effect of those expenditures;
  • Providing a counter cyclical credit to SMEs, named also Social Trade Credit. Though this mean actors that will benefit from the inflow of credit within a specific supply chain, are also contributing to the cost of credit risk.

Find out more here.

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DigiPay4Growth, progetto co-finanziato dalla Commissione Europea, propone un nuovo sistema digitale di pagamenti volto a stimolare la crescita economia a livello regionale e locale. Scopri di più qui.