Measuring the path towards a cashless society: the Maltese perspective

Abstract

The need for some form of payment has always existed and when paper-based systems had not yet come into use payments were made through barter. In the 21st century paper-based payments are becoming less common, not because of barter, but because of the use of cashless payment systems. This is conducted through cards, e-payments, cheques, credit transfers, direct debits and other payment instruments. The improvements in technology are a force that makes this system work. This research study provides an insight into the factors that determine the use of cashless payments of business people and non-business people. It aimed to determine the perspective of the Maltese in the use of non-cash payments and the type of transactions Maltese users are more likely to conduct by cashless means. It also explores the reasons behind such choices, and the concerns that still remain. The main data-collection tool was the questionnaire. The study categorizes non-business users by age, level of education and financial literacy. Usage is categorized in terms of the size of transactions. The study found that although statistically speaking Malta has experienced an increase in cashless payments, cash-based transactions are still preferred. It also found that cashless payments are most common among the younger age brackets, which may be attributed to more familiarity with modern technology. In addition, the cheque was found to be the most preferred method of cashless payment, which corroborates the data published by the European Central Bank for 2014. Final results show that 66% of the respondents preferred a cash-based system. The main argument against a cashless system refers to concerns about network problems and fraudulent activities, while the anticipated reduction in the rate of house thefts was the argument used in favour of a cashless society.