Moving Towards A Cashless Society: A Review Of Cash-Based And Electronic-Based Payment Systems, Essay.

The article above indicates that the world is rapidly moving away from cash-based payment systems to electronic-based payment systems (EFTPOS). ls Bruneifollowing this pattern? you are required to:-
1. Conduct a literature review to support the information in the article. You will need to review definitions of both types of payment systems, the criteria needed for a country to successfully implement such an e.system, and the key indicators that which inform us of this change in any country.
2. Design a research proposal to determine the level of electronic payments (compared to cash) being used in Brunei.
3. Give an overview of how you will collect data to address the research objectives above.
4. Conduct the research.
5. Analyse and present the data collected to reach a conclusion.
6. Discuss any potential limitations with the data collected.

Cash-based payment systems and electronic-based payment systems

The world is moving rapidly towards the electronic-based payment systems from the cash-based payment systems. There are many reasons for the non-acceptance of cash but people still like the cash-based world. The development of a cashless world is being shaped by many local factors. Cash transaction accounts for 85% of the total consumer transactions in the world. The world is gaining access to multiple non-cash options to make payments. There are many countries that have focused on moving towards the cashless society (Batiz-Lazo, Haigh & Stearns, 2011).

The share of noncash payments of the total value of payments in Belgium is 93%. The percentage of the population using a debit card is 86%. The share of noncash payments of the total value of payments in France is 92%. The percentage of the population using a debit card is 69%. The share of noncash payments of the total value of payments in Canada is 90%. The percentage of the population using a debit card is 88%. The share of noncash payments of the total value of payments in the United Kingdom is 89%. The percentage of the population using a debit card is 88%. The share of noncash payments of the total value of payments in Sweden is 89%.

The percentage of the population using a debit card is 96%.  The share of noncash payments of the total value of payments in Australia is 86%. The percentage of the population using a debit card is 79%. The share of noncash payments of the total value of payments in The Netherlands is 85%. The percentage of the population using a debit card is 98% (Ray, 2015). The countries are pushing people to use digital payments systems and developing digital infrastructure. The main objective of the government is to decrease costs by increasing profitability.

The service application has been introduced which allows the managers of the financial institutions to control and monitor directly interactions with the customers.  The financial institutions are instructed to focus on digital banking and the payment organizations have to enhance the quality of their services. The financial institutions are putting efforts for increasing the convenience and services at ATMs, branches and cash. The government of many nations are decreasing the dependence of the people on the cash transactions and adopting the digital payment techniques. 

Cash-based payment systems and electronic-based payment systems

The cash-based payment system is an instant payment of cash for any product or service.   It is a fast and convenient way where the provider receives the payment immediately at the point of the sale itself (Cateora, 2005). Cash-based payment is a cheaper option for transactions. There are multiple vendors who provide a discount on cash payments for purchasing any product or service.  

Electronic funds transfer at point of sale is a system which allows making payments or funds transfers using the debit or credit card. This technology firstly used in 1981 in the United States and then it reached Australia and New Zealand. EFTPOS is an electronic device which helps in making fund transfers to merchant's bank account from the customer's bank account. And it only accepts debit or a credit card. EFTPOS can only be used for the business based transaction. There are some criteria to get access to this device, an applicant has to apply for the membership and it must be a company (Jain & Kailay, 2018).

Advantages and disadvantages of cash-based payment systems and electronic-based payment systems

Advantages and disadvantages of cash-based payment systems and electronic-based payment systems

The electronic mode of payments cost the merchants, usually 3% of the total cost of the transaction. Merchant passes this charge onto to the buyer, which make electronic payments costly than cash payments.  Cash payments also reduce the risk of any type of fraud or identity theft.  Credit card information can be stolen very easily by the fraudster using a skimming device or a wireless card reader (Upadhyay & Chattopadhyay, 2015).  The online banking credentials can also be hacked and sold which can destroy the privacy of the account holder.

Cash payment helps to maintain a budget. It is found that people spend less when they are using cash for purchasing. A person, who is carrying cash, cannot purchase something which is out of his/her budget or he/she cannot afford at that moment. In the other hand credit card provide an option to buy now and pay later option.

On the other hand, cash is very hard and risky to carry. It is highly possible to get noticed and stolen by a thief. It also takes more time to go to the bank or an ATM to withdraw it than using a card which already available in the wallet. Cash payment puts a cap on spending but in an emergency situation, it could be a trouble. Online shopping has become very popular and they receive payments online which can be a problem for those who use cash only for the payments. In some countries people are not allowed to carry a large amount of cash, it is a criminal activity (Churchill & Brown, 2009).

EFTPOS reduce the labour cost as the money directly goes to the bank account so there is no cost of maintaining cash reports or receipts. It is a faster and convenient system in processing payments. This saves a lot of time for the merchant and the customer. It also generates a receipt which is helpful in case of dispute.

 It is unable an option to dispute a charge in case the merchant is refusing to refund the amount which not seems legitimate charge to the customer. EFTPOS system is very convenient it helps to avoid carrying a large amount of cash. Debit and credit cards are being used to make payments for purchasing any service or product (Dugar, Shreshtha & Jain, 2014). It is also expending the purchasing power. It allows making large purchases and the payments are getting broken down in different instalments.

A huge amount of cash can be noticed and stolen very easily. An organization that keeps a huge amount of cash as a stock can be easily targeted by the robbers. EFTPOS system reduces the risk of theft as the money directly goes to the bank account. And all the transactions which go through this device are absolutely safe. There is a safety feature enable in this device which not only tracks all the transactions but also block fraud transactions. EFTPOS has brought revolution in the payment system and the whole world is adopting this to make a cashless society.

There is a huge challenge for the organizations to provide EFTPOS facility to the customers in order to do business with them. Customers are not carrying cash any more, cards are being used to make payments and the origination has to accept all the cards in order to do business. It is a convenient option for the customers, as they do not require carrying a large amount of cash to make a payment (Johnson, Kiser, Washington & Torres, 2018).

A payment through EFTPOS charges the merchant. Whenever a customer pay using the debit or credit card for any purchase there is a service fee which generally bears by the merchant. EFTPOS payment generates receipt automatically and keeps records for every transaction which may hamper some customer’s privacy. Since it is a 21 century’s technology, it requires electricity to process any transaction and sometimes accesses to mobile networks as well, so in ruler areas, it may not work (Papadopoulos, 2007).

Implementation of E-system

The government plays a significant role in any country in bringing significant changes. The government should focus on the technologies by increasing online facilities for the citizens in order to support the implementation of the electronic based payment systems. The government with the help of financial institutions and other organizations would be able to move towards the cashless system for decreasing costs and increasing efficiency. The internet facilities need to be available for 24*7 in order to support the transaction process (Szmigin & Foxall, 1999).

The electronic based payment systems are being controlled by the banks which mean they are very much important for managing the whole process. The electronic payments can be done through electronic banking and electronic cards. Thus, the infrastructure needs to be developed focusing on implementation of transaction systems for the convenience of the people. The electronic payment systems should be available in each store of the market.

The government of the country should ensure that there should be no system failure and if occurs then there should organizations who would be responsible to manage the situation. The main focus would be that the citizens should not face any kind of problem while they carry out their payment process. The use of plastic cards (credit and debit cards), SMS payment, internet banking, virtual currency, a virtual wallet and electronic cards should be encouraged among people of the country.

The technological revolution in the field of communication and information has supported the improvement and development of cashless instruments and applications for both organizations and individuals (Wakamori & Welte, 2017). The investment should be made in the development of 3G/4G networks, QR code, NFC, smartphones and Wi-Fi in order to speed up the flow of data and information. The flow of information is safer, easier and faster which enhances the productivity of the nation. The e-transfer infrastructure needs to be more efficient in order to avoid any kind of problem that may arise during the whole process. The availability of competitive marketplace, dynamic business environment and affordable products are significant factors for the implementation of the electronic based payment system within the nation.

The role of government will not be limited to only individuals but also applicable to society, family and the entire and nation. The government has to identify the basic needs of the citizens which will help to implement the e-systems within the nation. Banking is considered to be the backbone of the economy and it acts as a bridge between organizations and customers. The banking system is being dependent on human skills and knowledge for carrying basic functions such as posting, journal, ledger and trial balance creation. The banking system needs to be very efficient and advanced for ensuring smooth functioning of the process (Worthington, 1995).

The citizens need to be provided with adequate knowledge about the use of the electronic based payment system and its benefits. The digital transactions will assist to solve many problems of the citizens in the country. The transfer of money and electronic exchange can be carried out with the assistance of electronic devices such as cards, computers and phone. Thus, the government can invest into the economy for developing infrastructure (Borzekowski & Kiser, 2008).                 

Key indicators that inform to bring change in any country

The revolution in IT has changed the entire payment system. The electronic based payment system is not only fast and convenient but also cost-effective. Card payment is increasing rapidly as the banks are providing added value services to the customers (Malhotra, 2015).

Businesses have also started moving towards online shops and enabling an option for the customers to pay using their debit card or credit card or an internet banking account which is more convenient to them. Even though the trend, there are still many consumers who afraid to adopt electronic payment system. Mostly the emerging countries feel convenient to use cash. It is more than half of the population use cash or cheque as a payment (Arango, Huynh & Sabetti, 2015). Even though the adults who want all other things to be fast and with high-end technology but apart from the payment system.  Additionally, there are numerous numbers of customers who do not want to use such a system due to their perception of risk in making online transactions.

Reducing technology cost

The technology has been using for EFTPOS system is getting cheaper day by day. Computers can be afforded by most of the people and internet service is becoming free in money countries (Oliveira, Thomas, Baptista & Campos, 2016).

Decreasing operational and processing cost

An electronic based payment saves paper and time both. Online fund transfers have become easy, it has just come under on click. There is no need to go to the bank and stay in queue to withdraw money or to do fund transfer. Internet banking has made it easy and time-saving.

Convenience

Old payment system requires the customer to visit the bank with a paper cheque and sign it to withdraw money. This may become inconvenient for the customer some time. Credit and debit card has changed the entire system. The ATM machines are now available at every corner of the world to withdraw money and also help to do fund transfers (Jain & Kailay, 2018).  

Security

The traditional way of banking allows the customer to send confidential data in form of paper via post, which is not secured. The electronic mailing system has reduced the concern of security. All the documents can be sent to the bank within an encrypted email which reduced the chance of getting misplaced (Johnson, Kiser, Washington & Torres, 2018).

Coverage

In term of business, an organization requires a faster way of the transaction and that needs to be accessible 24*7. This is not possible for any bank to open a branch near every organization's office. But an ATM machine can be installed at every doorstep which assists to withdraw money and the funds transferred can be done very easily using internet banking (Wilson, 2012).

Research proposal

The understanding of the difference and importance of cash based payment systems and electronic based payment systems are considered to be very much important for the development of the economy.

Research question

• How electronic payment systems are being used in Brunei?

Research objectives

The main objective of the research is to determine the level of electronic payments being used in Brunei.

Methodology

The research methodology determines and evaluates the best suitable techniques on the basis of the nature of the research topic. A standardized process is to be followed with the use of different tools and techniques. The researcher has synchronized all the process of the research. The use of proper tools and methods are considered to be significant for improving the quality of the study (Christensen, 2008).

Research philosophy 

The research philosophy assists in explaining the knowledge which is being developed during the process of carrying out the study. The nature of knowledge is being distinguished providing a better description of the study. The research philosophies consist of realism, interpretivism and positivism. Positivism assists in attaining positive examination of the research study. The realism evaluates the reality which is being existed around the world (Dixon, 2010).

The realism explains that the human mind is being influenced with effective clarifications and reasoning. The interpretivism explains that the world is a non-objectivity place where the external elements are not being available. The research philosophy which is being selected by the researcher is positivism in order to determine the level of electronic payments being used in Brunei. The researcher with the use of the positivism can determine the process of the research for better understanding of the topic.

Research approach 

The research approach describes the progress pattern of the study. The research approach provides a pattern for the study which examines the contents and objectives of the research topic. The inductive and deductive are the two research approach in nature. The deductive approach provides support to the observations on the basis of different information sources. The inductive approach determines any lacks in research of the study. However, the researcher has selected a deductive approach to study the pattern of the study in an appropriate manner (Drexl & Nikulin, 2005).

Research design    

The research design designs the outline of the process of the research in which the contents are being recorded. The research design is of different forms such as exploratory, descriptive and explanatory. The explanatory research design initiates the process of the research following a pre-planned process. The descriptive design determines the main reasons behind the incidents for its occurrence by verifying the research study theories. The exploratory design is consists of the mixture of explanatory and descriptive research designs which is applied for achieving the results. The researcher has selected the descriptive design because it evaluates the details of the study. The descriptive design will explain the importance of determining the level of electronic payments being used in Brunei (Vaus, 2007).

Working data type

Data collection is considered to be very much important for observing the research study closely. Data assists in identifying whether the research study is successful or unsuccessful. The data collection process is being adopted by the research on the basis of the nature of the study (Goddard & Melville, 2011).

Primary and secondary data

The quality of research can be enhanced with the help of data collection as increases the knowledge base. The process of the research has been carried out on the basis of the secondary and primary data (Vogt, 2010). The first-hand collection of data is referred to primary data which is being adopted by the researcher. The primary data collection provides most relevant information and facts but it is considered to be a lengthy process (Panneerselvam, 2014). The secondary data is easy to collect and consumes less time. The primary data has been collected by the research through ZOHO survey and shared it to family, school friend and colleague of work. The secondary data is being collected from secondary sources such as books, articles and internet.

Quantitative data

The researcher has tried to examine the responses of the research participants. The researcher collected quantitative data from the respondents. The quantitative data consists of the numerical data which is being recorded with the use of statistical tools. The large observations can be easily recorded with the help of collecting quantitative data. The survey questionnaire assisted in collecting quantitative data from the research participants (Treiman, 2009).

Sampling        

The researcher cannot take into account all the people for conducting the research. The sample study provides support for analysing the study in a better way. The respondents are being selected with the help of the sampling technique on the basis of the study. The researcher has adopted the probabilistic sampling technique for the collection of data. The survey questionnaire was prepared and distributed to the respondents. The participants were selected randomly for the collection of the primary data. The sample size is 54 for achieving better results from the study. The survey questionnaires were answered by the participants (Thompson, 2013).

Research ethics

The research provides rules and regulations which need to be maintained and followed by the researcher. The right code of conduct is to be taken into account with the assistance of ethical consideration. The research ethics helps to avoid any kind of issues that arise during the process of the study. The main reason for carrying out the research process is to be distributed among the research participants (Thompson, 2006). The data collected during the research process will not be used for commercial purpose. The collected data will be used for the only academic purpose. The in-depth analysis of the study will be carried by following the ethical rules and regulations.   

Gantt chart

The research study is to be carried out within a specified time framework. The researcher would be able to arrange all the tasks in an appropriate manner of the research process. Gantt chart is considered to be an effective tool that allows listing all the tasks as per the time is taken for carrying out the study.  

Main Activities/ Stages	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6
Selection of the research topic and its scope	Ø
Determination of the secondary data sources	Ø
Preparation of the research proposal	Ø
Preparation of the literature review		Ø
Explanation of the research methodology			Ø
Preparation of  ethics form, interview/survey			Ø
Gathering primary data			Ø
Evaluating data				Ø
Comparing and examining findings				Ø
Conclusion and recommendations					Ø
Submission						Ø

The above table depicts the researcher has arranged and listed all the major tasks which are being needed for conducting the whole research. The tasks are being highlighted which need to carry out for the accomplishment of the research objectives. The status of the research study can be determined with the help of the Gantt chart (Welman, Kruger & Mitchell, 2005).  

Survey 

Question 1

What is your gender?

Question 2

Age range?

Question 3

How much is your monthly income?

Question 4

How many times do you pay using CASH in 2 days?

Question 5

How many times do you pay using Card in 2 days?

Question 6

In the following range, would you prefer to pay use: (You can tick more than one)

Question 7

If it’s possible, which market will you use card? (You can tick more than one)

Data analysis

The data analysis highlights the issue that is being existed in the study. Data analysis is important for understanding the research study in an appropriate manner. The literature review theories can be related with the assistance of the data analysis. The primary data has been collected in form of quantitative from the participants (Sarantakos, 2007).

 

Analysis

The above question shows the number of times cash payments are being done by the participants in 2 days. It is found that 24.07% of the participants are paying cash for 2 times, 3 times and 5 and above times. 12.96% of the participants are paying cash for 4 times. 11.11% and 3.70% of the participants are paying cash for 1 time and 0 times. The data shows that most of the participants are using cash for paying.

Analysis:

The above survey question shows that 48.15% of the participants are not using the card in 2 days for paying for their purchases. 22.22% of participants are using 1 time, 11.11% of participants are using 2 times, 9.26% are using 3 times, 7.41% of participants are using 4 times and 1.85% of participants are using 5 and above. The analysis shows that most of the participants are not paying using the card.

The above question shows in which markets will the participants use their card. It is found that 75.93% of the participants will use in the supermarket. 29.63% of the participants will use in the fish market, 38.89% of participants will use in the mini market, 61.11% of the participants will us in a fast food outlet, 59.26% of the participants will use in a petrol station and 9.26% of the participants will not use in any of the markets. Most of the participants will use their card in different markets.   

Discussion

The data analysis depicted the electronic payments being used in Brunei. It is being found that most of the participants are using cash for the transactions. The card is not used so much in comparison to cash by the participants. The participants use the card for paying a high amount of money. They are using the card in the supermarket, mini market, fast food outlet and petrol station. The card is still not frequently used in Brunei as per the results from the data analysis.   

Limitations 

The research study has been carried out on many structures and processes that create complexities within the process. The research has been conducted on a limited number of participants which means the data collected is limited to the involved participants. The data is being collected from the participants of different age, income and behaviours which created difficulties in understanding the pattern of the responses. Apart from this, the research has also faced problems due to the restrictions on time. However, the researcher has been tried to overcome the limitations with the application of appropriate tools and techniques.

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