Cashless society and digital payments: Consumers' economic habits

Advancements in information and communication technologies are leading to significant changes in economic systems and consumer behaviors. These innovations are reshaping individuals' daily lives and payment habits. The proliferation of digital payment systems is causing a decline in the use of traditional paper money and the adoption of the concept of a cashless society. This shift enhances economic efficiency and makes money management more secure. One of the most striking examples of this transformation is Sweden. The country has announced that it will eliminate the use of paper money by 2025. In Sweden, cash usage has decreased by 40 percent, and digital payments constitute 85 percent of total transactions. Similarly, in Norway, over 95 percent of the population prefers mobile payment applications, encompassing more than 70 percent of total retail transactions. Finland aims to become a completely cashless society by 2029. Currently, 98 percent of the Finnish population uses bank cards, and digital payments account for 80 percent of total transactions. Globally, digital payment systems are being rapidly adopted. In the United States, 40 percent of the population did not use cash at all in 2022, with 11 percent having completely abandoned it. In the United Kingdom, more than 23 million people hardly use cash(TUNÇSİPER, 2024). This study aims to contribute to understanding the effects of digitalization on consumer behavior and to assess the development of the cashless society concept. It will provide significant academic and practical insights into the adaptation process of individuals in Turkey to digital payment systems and the challenges they encounter. Moreover, the findings of this study will offer strategic information for financial institutions and policymakers in Turkey.