TABLE OF CONTENTS

Introduction- - - - - - - - - - -

Background of the Study - - - - - - - - -

Statement of Problem - - - - - - - - -

Purpose of the Study- - - - - - - - - -

Significance of the Study- - - - - - - - -

Limitation and Delimitation of the Study - - - - - - -

Delimitations- - - - - - - - - - -

LITERATURE REVIEW- - - - - - - - -

Costs and benefits of cashless society- - - - - - -

Challenges of Cashless Society- - - - - - - -

RESEARCH METHODOLOGY- - - - - - - -

3.1Research Method- - - - -

3.2 Research design- - - - -

3.3 Population of the Study- - - - -

3.4 Simple Size and Sampling Technique- - - - -

3.2 Data Collection Procedure and Instrument- - - - -

DATA PRESENTATION- - - - - - - - -

Research Findings - - - - - - - - - -

Conclusion- - - - - - - - - - -

Recommendations - - - - - - - - - -

References - - - - - - - - - - -
 INTRODUCTION

According to Akinola (2012), “a cashless society is a community in which all payments are

electronic”; a community in which everything is paid through digital electronic money, for

instance with online payments, credit or debit cards or mobile payments. Online payments by

using mobile devices or tablet have been used by several businesses to make transactions.

Payments are essential in the exchange of money for goods and services between sellers and

buyers. The most used payment instruments in point of sales locations are cash and payment

cards. Over the past decades, we have witnessed changes into how individual’s pay. In particular,

there has been a drop in the use of cash as payment instrument both in terms of value and

frequency. Payment cards, such as charge, credit, and debit, and more recently new payment

instruments, such as mobile payments and e-money, are replacing cash. These changes occur

more or less in all economies and across the globe, but are particular evident in the Nordic

countries, where you also can find a lively debate on the cashless society [3, 4, 8]. For instance,

in Sweden there is a cash rebellion “Kontantuppror”, where lobby groups in particular

representing the cash-in-transit service industry and older people, demand that banks accept cash

again (Note that most Swedish bank branch offices are cashless). Cashless systems remove the

need for proximity to financial services infrastructure. Instead by utilising mobile transactions,

users are empowered to manage their finances better and have access to more financial services

such as savings, payments, credit and insurance. Access and use of appropriate financial services

can help people better manage risks, step out of poverty and build a better life (Grandolini,

2015). The Cashless payments have been used to make payment from one individual/company to

another in all over the world. The perceived easy to use and low-cost transaction equipment has

attracted vendors to shift to these payments’ methods.

Background of the Study

Cashless societies have existed since the moment mankind came into existence, based on barter

and other methods of exchange. However, the true Cashless Society should be understood in the

sense of a move towards, as well as the consequences of, a society in which cash is replaced

by its digital corresponding. In other words, “legal tender (money) exists, is recorded, and is

exchanged only in electronic digital form” (Fabris, 2019). Over the past several decades,

financial markets and institutions underwent radical transformation and a sudden expansion,

induced by general trends in deregulation, liberalization, globalization, as well as computer

technologies advances. International capital flows intensified; markets have developed new and

sophisticated instruments, with the drastic improvement in the speed of financial transactions

execution significantly lowering financial transaction costs (Fabris, 2018). The degree of cross-

border financial interdependence has increased dramatically, and financial sector development

exceeded that of the real economy by far, resulting in financial assets in developed countries

being multiple times higher than their GDP. These trends have also led to a better allocation of

capital, reduction of costs, and other numerous positive effects, but also to easier crisis spillover

and changes in economic policy pursuit that relies more on discretion than rules (Prašćević,

2013). The manner of payment has changed in parallel with the aforesaid changes. Credit and

debit cards have become widespread and started squeezing out cash, whereas the emergence of

contactless technologies has further enhanced the use of these payment instruments. There have

been a growing number of products and services paid without cash such as various applications,

bus fares, airline tickets, internet stores, and the like. Smart phones also revolutionized payments.

There have been less high-denomination banknotes and coins in circulation, the latter in
particular due to high minting and handling costs. Banks have been reducing the number of their

branches and employees and started encouraging cashless payments.

Statement of Problem

e appearance of a cashless
society raises a number of
dilemmas for economic
policymakers and all open
questions are still le without
nal answers. Certainly
the key dilemmas refer to whether
a cashless society implies welfare
growth or
not; what implications would it
have for monetary policy, and
would the attain-
ment of key objectives be
facilitated or made more dicult?
What are the risks?
Would a cashless society be better
in meeting user demand for
money? What is
certain is that a lot of research is
needed that would shed light on all
potential
implications and they must always
start with country specic
circumstances.
However, considering all the
above, it is not reasonable to
expect the emergence
of a cashless society in the near
future, same as expecting that it
could be based
on private money. Nonetheless,
what cannot be excluded and what
may be likely
in the near future is the emergence
of central bank digital currencies,
at least in
some countries and as an
alternative to cash. is is also
supported by the fact
that a number of central banks are
very actively investigating the
costs and ben-
ets of introducing this money.
The appearance of a cashless society raises a number of dilemmas for economic policymakers

and all open questions are still left without final answers. Certainly the key dilemmas refer to

whether a cashless society implies welfare growth or not; what implications would it have for

monetary policy, and would the attainment of key objectives be facilitated or made more

difficult? What are the risks? Would a cashless society be better in meeting user demand for

money? What is certain is that a lot of research is needed that would shed light on all potential

implications and they must always start with country specific circumstances. However,

considering all the above, it is not reasonable to expect the emergence of a cashless society in the

near future, same as expecting that it could be based on private money. Nonetheless, what cannot

be excluded and what may be likely in the near future is the emergence of central bank digital

currencies, at least in some countries and as an alternative to cash. is is also supported by the

fact that a number of central banks are very actively investigating the costs and ben-ets of

introducing this money.

Purpose of the Study

The purpose of this study is to review various research articles which cover cashless payments

from various scholarly sources to determine the benefits and their challenges so as to suggest and

give recommendations on the way forward for adoption of non-cash payments successfully.

Non-cash (Cashless) payments discussed in this study are the ones used to make payment

without using cash. It includes crypto currency, cheques, bank cards, online payments, and

mobile money. There are several drawbacks associated with usage of those methods which

includes those borne by consumers, associated with vendors, and the ones imparted to the

government of Liberia at large.

Significance of the Study

This study will be relevant and significance because it deals with a contemporary issue. Financial

exclusion has been pointed as one of the major drivers of poverty; hence, financial inclusion is

attracting worldwide attention. Poverty alleviation is one of the eight (SGDs) which Liberia

seeks to achieve. Mobile banking has the potential to be embraced by people of all social groups

for as long as one has access to a mobile phone. It is anticipated that the findings will give

insights to the policy makers so that they can formulate policies that encourage effort to embrace

the ‘unbanked’ population. The business community will also draw a leaf from the study’s

findings and put strategies that respond to the opportunities and threats uncovered through the

research effort. The public will make informed choices on whether to adopt or reject mobile

banking products. Other scholars may use the research findings to identify areas for further

studies. Mobile banking has the potential to offer wider markets for financial institutions by

reaching to the previously ‘unbanked’ people.

Limitation and Delimitation of the Study

Limitations are potential weaknesses or constraints that are beyond the control of the researcher

(Wargo, 2015). This study wants constraint on three primary limitations: the first limitation was

that the researcher was restricted only on impacts of cashless society with references to the

Liberian Economy. The second limitations was insufficient information on the impacts of

cashless society due to the case study area. The third is limited resources; there is no enough

money to travel to and fro in collecting the data.

Delimitations

Delimitations are the boundaries researchers set for the study (Leedy & Ormrod, 2013). This

study was contingent on two primary delimitations. The first delimitation was restricted to the
impact of cashless on the economy; case study of Central Bank of Liberia,. The second

delimitations is based on three years period from 2019 – 2022.

LITERATURE REVIEW

In this section, a detailed description of an imminent Cashless Society and the preeminent drivers

behind the implementation of such a critical step in a country’s economy will be provided

(Liberia). Moreover, an explanation of the pivotal distinct drivers will be reported, along with an

explanation of the crucial stakeholders participating in the process and the necessary pre and post

Cashless Society stages to undertake. Further, the relevant theories and empirical evidence

related to the Cashless Society concept provided by academia will be discussed and scrutinized

in detail.

Costs and benefits of cashless society

It is obviously that there are

arguments that support that we are
moving towards
a cashless society and those that
argue against it,
It is obviously that there are arguments that support that we are moving towards a cashless

society and those that argue against it, So let us consider both arguments, starting with the

arguments in favour of a cashless society:

1. First, the elimination of cash may seriously impair criminal activity, especially those

connected with drugs and money laundering. These activities can be hardly carried out
 without cash. Also, cash cannot be tracked, which is very beneficial for criminals.

Transitioning to cashless society will also make counterfeiting of money virtually

impossible. A recent US study found that an increase in cashless transactions has led to a

reduction in burglaries and the overall crime rate (Achord et al., 2017).

2. Not only there are credit and debit cards, but there are also bank transfers, direct deposit,

and online payments. It’s simply too convenient to make pay-ments electronically,

particularly with the Internet, as well as the fact that merchants and vendors can now be

hundreds or thousands of miles away. The survey from FED showed that total noncash

payments increased at an annual rate of 5.3 percent from 2012 to 2015 (Mercadante,

2018).

3. It will decrease shadow economy, which will result in increased public revenues, with the

final outcome being the strengthening of fiscal stability. Most of shadow economy

trading nowadays includes unreported transactions that would otherwise be taxed. With

the transition to a cashless society these transactions would enter legal flows and be

subject to taxation. This would increase public revenues, with the domino effect being

lowered fiscal deficit and public debt. Tax savings are difficult to quantify, but a UK

study pointed to potential savings in tax evasion of £6bn for UK.

4. Fast development of IT technology, smart phones, and electronic application support e-

payment. Digital society development has brought about an in-crease in digital payments.

Mobile phones are increasingly becoming a type of digital wallets, and there are more

and more applications and digital services that can be paid only electronically.
 5. The issue of personal safety should not be ignored either. Individuals who have

substantial amounts of cash on them or in their homes can become victims of robbery

which could lead not only to material loss but also to jeopardized personal safety.

Challenges of Cashless Society

Tough many believe a cashless society is inevitable, there are a few signicant reasons why that

may not be the case.

1. Poor and elderly population still remains disproportionately dependent on cash. Their

knowledge of the use of digital money is limited and the question is how the majority of

them would manage in a cashless society. Also, there is a significant part of the

population in all countries that do not have access to bank accounts, mostly poor

individuals and marginalized groups. Then a certain part of population does not have

access to the Internet and are not IT literate. The data from the USA showed that 11% of

the population does not use the Internet (Mercadante, 2018). However, the opposite effect

in terms of financial inclusion should not be excluded. For example, in some rural areas

or remote parts of the country with very limited financial infrastructure (banks, ATMs,

etc.) digital money could lead to an increase in financial inclusion.

2. Low level of financial literacy can prevent some part of population from using cashless

means of payment. With the emergence and development of the Internet, the

globalization of economic business and, in particular, electronic payments, finances have

become different from what they once were.

3. Privacy - some persons want privacy in their financial transactions. Electronic payments

provide possibilities for tracking all financial transactions. is will be a burning issue in
 the future because it is not difficult to imagine the future where an individual will have a

chip in their body that will replace their ID card, a health insurance card, a driver`s

license, a key to open an apartment and a car, and this will also be a digital wallet. The

key issue will be the risk of a complete loss of privacy, as well as the dilemma of who

will have access to the supervision of individuals.

4. Tradition - Paying with cash is a traditional means of payment. Abolishing cash would

certainly be a revolutionary change and behavioral theories suggest that individuals tend

to behave conservatively, that is, often they strongly resist major changes when they are

uncertain how those will affect their position. Thus, cash is much more used in Germany

and Austria than in Sweden or Belgium. There are also studies suggesting that a greater

share of cash use in these countries is not related to a higher level of shadow economy.

(Achord et al., 2017)

5. IT risk – If we fully transit to a digital society and our IT systems fail, what shall we do

then? An outage of visa services in June - caused by a system failure gave a small taste of

the risk. Customers across the EU were left unable to pay for goods and services. The

only people who could eat were those with cash (Cerulus and Contituglia, 2018). Also,

the recent hurricanes in the USA led to power outages in a great number of areas and

electronic money was virtually useless.

RESEARCH METHODOLOGY

3.1Research Method

The researchers used the qualitative method because social life cannot be understood by the same

way used to understand the natural world (Barnes, 1925). The qualitative method makes social

phenomena clear and well understood. Furthermore, the qualitative method can be characterized
as the attempt to obtain an in-depth understanding of the meaning and definition of the situation

"presented by informants", rather than producing a quantitative definition of their characteristics.

3.2 Research design

The design used by the researcher is descriptive. Descriptive writing analyzes and explains

information on the area of research and educates readers. According to Burns and Grove (2003),

research design is a blueprint that is used for conducting study with maximum control over

factors that may interfere with the validity of findings. Research design can also be defined as a

plan that describes how, when, and where data are collected and analyzed. The choice of a

particular type of research design is based on the research problem, and the purpose of the study

(parahoo, 1997).The research is non-experimental, which means that variables are not

manipulated because no intervention take place, and there is no random assignment of subjects to

groups (Dempy, 2000). The primary data will be sorted, coded, disaggregated and group into

tables to enable the researcher adequately assess the impacts of mutilated banknotes on the

Liberians economy.

3.3 Population of the Study

The study's target population was the population of the Central Bank of Liberia. The population

of is 450 employees at the Central Bank of Liberia (CBL). From the population of 450, the

researchers selected a sample of 20 respondents to provide the needed data. Defining the

population allows the researcher to establish boundary conditions that specify who is included in

or excluded from the population (Tuckman, 1985). Parahoo (1997) defines the target population

as the total number of units from which data can be collected, such as individuals, artifacts,

events or organizations. Burns and Groves (2003) also define a population as all the elements

that meet the criteria for inclusion in a study. Moreover, the target population contains a member
of a group that a researcher is interested in investigating. The target population for the study is

the entire set of units for which the survey data are to be used to make inferences.

3.4 Simple Size and Sampling Technique

The sample size of 50 respondents were selected for the research which is ten percent (10%) of

the target population. Therefore, the sample size for the study was 50 teenage girls. Polit (2003)

defines sample as the proportion of a people. According to John Curry (2001), if the study's

target population is between 101- 1000, the researcher could use ten percent of the people to

conduct the study. The sampling technique used for this study was purposive and random

sampling technique. The Purposive Sampling Technique was used in selecting respondents for

this study. Moreover, the purposive sampling technique helped to purposively select respondents

who can provide the needed information for the study. Purposive sampling is used because it is

based on the argument that the investigator wants to discover, understand, and gain insight and

therefore must select a sample from which the most can be learned(Merriam,20000).

3.2 Data Collection Procedure and Instrument

The researcher developed ten (6) questions for the study. A data collection instrument is a tool

used in precision work in science, medicine, and technology. Moreover, data collection is

something used as a means of achieving the desired result or accomplishing a particular purpose

(Encarta Dictionary, 2001). Data collection instrument helps the researcher to make the right

'connections' between the researcher and the respondents. Quantitative research deals with close-

ended questions, while qualitative research deals with open-ended questions. Since this research

is qualitative, the data collection methods include; questionnaires (self-administered

questionnaires), and personal interview. In most instances, interviews are usually conducted

using structured or standardized interview schedules (Tagoe, 2003). The researchers visited the
 study area and applied for institution entry by seeking permission from the administration and

stakeholders to conduct the research.

DATA PRESENTATION

No. Questions Agreed Strongly Disagreed Strongly

Agree Disagree

1 The issues of cashless society have negative 10 30 7 3

impacts on the Economy.

2 Cashless payment lead to high inflation in the 15 25 6 4

country economy.

3 the advancement of technology and lack of 20 22 8 0

sufficient banking institution are the cause of

cashless society

4 The mismanagement and money laundering 10 2 20 8

paved the way for cashless society.

5 The avoidance of high cost of printing and 15 5 20 10

mutilated banknotes call for cashless society.

6 The economy of Liberia can transition to 10 30 2 8

cashless payment in the next future.

Total 80 114 63 33
 The impact of Cahless Payment
40%

35%

30%

25%
Axis Title

20%

15%

10%

5%

0%
Agree Strongly agree Disagree Strongly disagree

Research Findings

The findings of the research shows out of the 50 respondents that took part in the research, 36%

of the respondents strongly agreed on the six research questions, 25% of the respondents agree,

20% disagree, while, 10% strongly disagree on the six research questions that were asked during

the research. Therefore majority of respondents obtained cashless payment has many impacts of

the Economy.
 CONCLUSION

If we look at the history of money,

we will notice that it went through
evolution-
ary changes starting from the
barter system, precious metals
used as the means
of payment, money made from
precious metals and gold backed
money to money
whose value is completely separate
from the material from which it
was made.
Central bank digital currency is a
completely logical next step in this
process of
money evolution.
Divergent processes are at play
today as at the same time we have
an increase
in the share of cashless
transactions but also growth of
cash. e paper clearly
shows potential benets as well
as risks that cashless society would
bring about.
Unfortunately, there are not
enough arguments at this moment
to assume an
unambiguous view of the impact
of a cashless society on welfare.
However, the
analysis provides two unequivocal
conclusions:
• cashless society is not
something that can be expected in
the near future, and
• private crypto currencies are
not the backbone on which a
cashless society
could be based.
However, it is reasonable to expect
that central bank digital currencies
would
emerge in some countries but this
step, as well as the transition to a
cashless so-
ciety, would require a set of policy
responses. e paper points out
that the key
reactions of economic
policymakers must address the
inuence of digital curren-
cies on nancial stability and the
eciency of monetary policy. It is
also neces-
sary to adopt a set of new
regulations, then deepen our
knowledge about them,
improve security of IT technology,
increase IT literacy, and so on.
If we look at the history of money, we will notice that it went through evolutionary changes

starting from the barter system, precious metals used as the means of payment, money made

from precious metals and gold backed money to money whose value is completely separate from

the material from which it was made. Central bank digital currency is a completely logical next

step in this process of money evolution. Divergent processes are at play today as at the same time

we have an increase in the share of cashless transactions but also growth of cash. The paper

clearly shows potential benefits as well as risks that cashless society would bring about.

However, it is reasonable to expect that central bank digital currencies would emerge in some
countries but this step, as well as the transition to a cashless society, would require a set of policy

responses.

Recommendations

The paper points out that the key reactions of economic policymakers must address;

 The influence of digital currencies on financial stability and the efficiency of monetary

policy;

 It is also necessary to adopt a set of new regulations, then deepen our knowledge about

them, improve security of IT technology, increase IT literacy, and so on.

 Decentralized and encourage cashless payment on the local Liberian market every

counties.

 The should be absolutely no fees attached for any transaction done through cashless

payment; with that citizens will be encourage to adopt the new system.

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