The cashless society in the EU : a comparative study between Malta and Sweden

Abstract

As technology is ever-changing, it is inevitably affecting our daily lives. It has transformed many sectors, including the payments industry. After the invention of the credit card, technology has continued to come up with new and innovative ways for one to pay. As a result, we can see a decline in the use of cash in different countries worldwide, including countries in the European Union (EU). This decline in cash usage is paving the way for the possibility of having a completely cashless society i.e., a form of economic state whereby all payment methods are not made using tangible banknotes and coins but rather by using the transfer of digital information between two parties. This transfer of information can be done using various online payment instruments, which all compete in the digital payment market. Three research questions have been explicitly chosen to help identify different components in a cashless society. The first research question is “What are the benefits and drawbacks of a cashless society?”. Technology brings with it a variety of advantages and disadvantages that need to be assessed in order to evaluate the functioning of a cashless society properly. A cashless society also depends on factors that influence the transition towards a new reality whereby cash use is minimised and electronic payments are the new norm. Thus, the second research question is “What factors determine if society becomes cashless?”. Lastly, these factors will be assessed in the final research question, which is “To what extent do these factors prevail in Malta and Sweden?”. Malta and Sweden were chosen in particular because of the distinctive gap found when looking into the percentage of the population that use online payment methods rather than cash. Sweden has also launched its own instant payments application called SWISH, specifically manufactured to accommodate the Swedish population.