Background and Problem statement

Banking has undergone a revolution, just like the industrialization of economies. An old legend goes that money is King. Nevertheless, transactions are supported entirely by money, and the use of money dates back to the 15th century from Mesopotamia the present-day Iraq and Egypt. During the time, money existed as precious metals, jewels, and other valuables. The ancient Chinese empire is also taunted as the first place in the world where the use of money began. Historical site excavations have found coin-shaped clay coins which were used in trade during such times. Expansively, the spread of money was accelerated during the Roman Empire, where the use of money spread out from Egypt across the Mediterranean to other western nations.

Nations, later on, developed currency systems for their countries controlled by well-organized systems we refer to as the Reserves or simply central banks. Early banking systems backed the exchange on the use of Gold as a store of value, and later on, banks issued notes as I owe you, which later became notes which act as a medium of exchange and store of value. People use cash notes and coins to transact and keep their wealth. Similarly, governments depend on their central banks to manage their cash resources and spur economic growth by trading with other nations. However, the use of Fiat money has dramatically come to a disruption resulting from technological developments. Because anyone can presumably develop an exchange system, people have resorted to electronic transfer of funds and trade across countries. Transactions have all been facilitated by cash, but Barter trade did serve the same purpose earlier on. In line with the idea of an item for an item exchange, the technology-savvy young generation has come up with more novice ways of transacting using digital money. One notable technological disruption is that of cryptocurrencies and Electronic transfer. Economies are undergoing radical changes because of the financial innovations like credit cards by companies like Visa, Mastercard, and pulse. The monetary shift from a cash society to a world with electronic non-cash development means that payments will be cashless, which will revolutionize banking and payment systems. It’s on this backdrop that this paper seeks to find out the effects of moving towards “no cash”transactions.

Research question

What is the impact of digital payments on retail transactions

Research objectives

To find out the impact of moving towards no cash retail transactions

How the country and markets are affected:

Digitization comes with its challenges when all the parties involved embrace such technology. The use of cash-less technologies, including cryptocurrencies, credit cards, debit cards, electronic transfers, and blockchain technology, affects the country and markets differently.

First, the country will enjoy the benefit of reduced cases of money laundering. Money laundering is a vice where dirty money is placed in financial institutions, layered in fraudulent accounting undertakings, and later integrated into the financial system. Through blockchain technology, cashless transactions can wholly eliminate money laundering. Secondly, fraud can be eliminated because no one carries cash. Before a transaction is completed, all the parties concerned would verify the transaction, making cash-less payments more superior to cash transactions. Thirdly financial access and deepening will be increased if cashless payments are embraced. Vulnerable groups in society like the orphans, elderly, and disabled can be reached directly by the governments instead of in a situation where direct cash has to be given to them.

In most cases, they are not reached. Studies show that transactions in banks are on the decline as non-cash and financial securities are on the rise in most cases. Having a smartphone will directly link them, and they can easily make payments and receive money. Fourth, cash transaction costs are high in comparison to cash-less transactions. Traditionally, cash has to be moved from one place to another. Businesses have to worry about keeping cash, but with the cash-less transactions, businesses continue operating without the worry of theft or the cost of moving and safekeeping of money. Fifth, governments will fully monitor the actions and activities of individuals. Data from individuals can be mined with ease, and criminals will easily be trailed. In a cash-less economy, individuals’ purchases can also be monitored, and controlling the consumption of harmful items becomes more accessible.

Despite the imminent benefits highlighted,non-cash transactions pose a lot of risk and dangers to an economy and individuals. Cybersecurity is a challenge that the digitization of the financial system faces. Most of the world’s central banks have a realization that digital currency is the new financial innovation and are developing the Central Bank Digital Currencies(CBDC).If an entire financial  system of CBDC failing through a terror or cyber-attack, economy as an whole instantly fails.Internet financial system attacks by hackers is a great danger to the cashless payments system. Massive employment can arise as most economies go digital in payments since most of the work done by individuals will soon be done by the system which does self-independent verification of details.

Currency markets are undergoing changes because of the cashless payments systems.Most the financial markets use the Distributed Ledger Technology that is enabled to monitor and track transactions without the presence of the parties involved. Trading if financial securities has been made easier through Block chain technology like the Bitcoin currency. However the use of this currency faces uncertainty in fluctuations.Currency markets have to change to a digital form to eliminate the high costs of trading and increase efficiency.

Lessons from the use of non-cash payments

Non-cash payments a lot of lessons arise that will inform policy makers on the next direction in which they will manage and control the cashless society.Aneed arises for increased access to internet infrastructure and other technological gadgets. Cashless society needs more smartphones which should have internet connectivity which consumes a lot of electricity.Cybersecurity skills should be imparted in most academic fields to improve and counter hacking terror activities. Monitoring will not be done away with, but all individuals will become more aware that they are under watch and will change behaviors to counter such measures by their governments.

Ways in which a Multinational company will manage non-cash payments risks

Multinational companies are businesses with a presence all over the world and transact remotely with their branches as well as other companies.For the MNC’s to manage the risks arising from digital currencies, they have to undertake the following measures:

1.Develop internal cybersecurity measures to curb hacking and ratify the different anti –cybersecurity laws from countries where they operate.

2.Hire well-skilled persons in information technology

3.Invest in technological research and development to make it easier to transact and create value for their organizations

4.Develop and acquire the best software to be used in their organizations that cannot be hacked. They may develop an independent cloud-computing infrastructure

5.Create credit and debit cards for their customers and agree on a uniform platform of Customer RelationShip management CRM to safeguard the customer data.


Digital currencies will soon replace most of the world’s traditional way of transacting, leaving most central banks and economies changed. Large and small businesses should be ahead in time to embrace the non –cash payments systems which research has shown to a greater extent as the most favored. Most young entrepreneurs and individuals are using digital cash transactions that save on costs and improve service and product delivery efficiency for the customers. Similarly, the central banks and governments should move with speed to control and regulate the digital currency to stream m line the financial systems so that individuals do not suffer in case of digital currency failure.

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