Abstract

Moving toward a cashless economy has become an important policy in many countries due to digital banking and payment systems can improve financial inclusion, increase transaction efficiency and boost economic transparency. In Afghanistan, even with recent developments in digital banking and payments, cash remains the dominant medium of exchange and all payments are made in cash due to people in the country preferring cash instead of digital services. Limited empirical research has examined the role of banks, Electronic Money Institutions (EMIs), and other financial institutions in promoting a cashless economy in Afghanistan. This study examines the role of banks and EMIs in advancing of cashless economy in Afghanistan, with specific emphasis on Azizi Bank’s Digital Banking services and the role of Afghanistan Payment System (APS). A quantitative research method was employed using a structured questionnaire distributed to professionals working in Banks, EMIs and APS. A total of 396 valid responses were collected and examined using descriptive statistics, reliability, correlation, multiple regression testing and analysis through Microsoft Excel. The findings indicate that banks and EMIs play complementary and significant roles in promoting the adoption of digital payment systems through digital banking services, including debit, prepaid, and credit cards, mobile banking, mobile wallets, ATMs, POS networks, and other fintech initiatives that expand and enhance financial services. APS acts the critical role as the national payment switch by enabling the interoperability between banks, EMIs and other financial institutions. Low financial literacy, Public trust and security concerns are the key barriers for the adoption of cashless economy in Afghanistan. The research concludes that for the successful development of a cashless economy in Afghanistan requires coordinated action by the financial institutions and regulators and enhancing digital infrastructure, educating financial literacy and improving interoperability are the key accelerators toward sustainable digital ecosystem for cashless economy.

Keywords

Cashless Economy Banks Electronic Money Institutions Afghanistan Payments System Digital Payments