Not All Revenue Stays Where It’s Earned

When a customer spends money at a local business, it feels like that dollar stays in Hawaiʻi. In reality, a meaningful portion often leaves the islands immediately through payment fees and settlement infrastructure.

This phenomenon is known as economic leakage — and payments are one of its most overlooked drivers.

What Is Economic Leakage?

Economic leakage occurs when money generated in a local economy flows out to external entities instead of circulating locally.

In payments, leakage typically happens through:

• Card network fees

• Payment processor margins

• Out-of-state banks and intermediaries

• Delayed settlement held off-island

While each transaction fee may seem small, the cumulative effect across millions of transactions is significant.

Why Hawaiʻi Is Especially Impacted

Hawaiʻi’s economy is more vulnerable to leakage because:

• Most major financial infrastructure is mainland-based

• Tourism drives high transaction volume

• Small businesses dominate the local economy

• Margins are already thin due to higher costs

When fees leave the islands, they don’t:

• Support local jobs

• Get reinvested in Hawaiʻi businesses

• Strengthen community resilience

How Payment Choices Shape Local Economies

Payment systems aren’t neutral. The way money moves determines:

• Who earns interest on held funds

• Where fees accumulate

• How quickly capital recirculates

Systems designed far from Hawaiʻi naturally optimize for scale — not local impact.

Keeping More Dollars Circulating Locally

When more transaction value stays local:

• Merchants retain more revenue

• Vendors get paid faster

• Employees benefit from stronger businesses

• Communities become more resilient

Even small improvements in payment efficiency can have outsized local effects.

Payments Without Forcing Change

Keeping dollars local doesn’t require abandoning existing systems.

Modern payment rails can:

• Operate alongside cards and banks

• Offer merchants optional alternatives

• Reduce unnecessary intermediaries

• Improve transparency and settlement speed

Choice matters. Optionality matters.

Why This Matters Long-Term

Payments may seem like plumbing — invisible until they fail. But over time, they shape:

• Business survival rates

• Local investment capacity

• Economic independence

USD Hawaiʻi is designed to explore how modern payment infrastructure can reduce leakage while operating within clear legal and regulatory boundaries.

Early-access participants help define what works best for Hawaiʻi.