Cashless transactions refer to the method of paying in the absence of banknotes (Kumari & Khanna, 2017). Cashless instruments, such as debit cards and electronic wallets, have caused a significant impact on economic growth due to their convenience and security for users. Hence, cashless transactions can stimulate economic growth and development of a country as revealed in the following three works of literature that demonstrate this argument. Firstly, Aminata and Sjarif (2020) reported that cashless payments lower the costs of manufacturing money resulting in stimulating a country’s economic growth. For instance, cashless payments decrease the expenses for producing banknotes which allow funds to be invested in government expenditure, boosting the country’s economic growth. Moreover, Kumari and Khanna (2017) identified that cashless transactions strengthen the economic stability of a country as it elevates the overall efficiency to collect and transfer money. The authors supported this point by claiming that the duration for garnering money is eradicated, and funds can be instantly transferred to bank accounts of recipients that are under financial aid programmes. Lastly, Wong et al. (2020) revealed that cashless payments will cause a rise in private consumption because it facilitates the acquisition of products and services. For example, the implementation of cashless payments has resulted in a 0.17 per cent Gross Domestic Product (GDP) growth contributed by a 0.7 per cent increment from private consumption (Zandi et al., 2013, as cited in Wong et al., 2020). In conclusion, long-term enforcement of cashless payments can foster a country’s economic growth and development as the positive effects will not surface instantaneously. Hence, it needs to be imposed for extended periods to achieve the prolonged advantages that contribute to economic expansion. As such, governments should encourage the adoption of cashless transactions by giving government incentives that encourage consumer spending.

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