THE PERCEPTION OF CASHLESS POLICY IN THE WORLD
Abstract
The present world has moved from cash transactions to cashless transactions. This article examines the impact of implementation of a cashless payment policy on economic development and gradual transition to a cashless economy in India. For this study, the focus is on the time period from 2010 to 2018. The data used for this study are tele transfer, through credit or debit card payment, check payment, and E-money on Indian economic growth. The study has employed the panel vector error correction model, Padroni residual cointegration, and the hypothetical prototypical method. The results show that customers and sellers accept a cashless system policy. In the short period, we have a causality model running from a card system to a check payment and telegraphic transfer system, and a causality model running from a telegraphic payment system to a card payment system. In the long period, there is a positive outcome in using a cashless policy on Indian economic growth. However, the use of a cashless policy on Indian economic development in the short term will be negative, whereas in the long term it will impact positively. Hence, any kind of economic strategy that endorses a cashless payment system cannot have positive impact on the economic development directly.
This study investigated the effect of the Central Bank Cashless Policy on the Payment System in Nigeria. Cognizance of the fact that an improved exchange mechanism and payment system is central to the survival and growth of Nigerian economy which had suffered severe recession between 2015 and 2019, it applied survey research design to poll 204 bank workers from four banks in Nigeria to ascertain their perception on the extent to which the cashless policy has addressed the problem of exchange and payment system in Nigeria. The independent variable was cashless policy while the dependent variables were cash based transactions; modernization of payment system; and volume of cash outside the formal economy. Using Correlation Coefficient with SPSS 10 the test of hypotheses showed that there was a statistically significant relationship between the cashless policy and the development and modernisation of the payment system (i.e. p < 0.05 at 0.05 significance level) while it has significantly trimmed down the volume of cash in the informal sector in Nigeria by nearly 32% among others. It was concluded that the cashless policy has significantly and positively improved exchange and payment system in Nigeria. as well as reduced drastically the volume of cash in the informal sector of the economy including reducing significantly the number of cash based transactions in the economy. It was recommended inter alia, that the monetary authorities should embark on a second phase of the policy to bring more transactions under the cashless policy.
References
- D. Abrazhevich. 2004. Electronic Payment Systems: A User-Centered Perspective and Interaction Design. Technische Universiteit Eindhoven.
- A. Alawiye-Adams. 2013. The cashless payment system as a panacea to the national security challenges in Nigeria. SSRN Electronic Journal. Abstract 2337239.
- W. F. Baxter. 1983. Bank interchange of transactional paper: Legal and economic perspectives. Journal of Law and Economics, 26, 3, 541–588.
