THE ROLE OF ELECTRONIC PAYMENTS IN THE TRANSITION TOWARD A CASHLESS ECONOMY: EMPIRICAL INSIGHTS FROM BOSNIA AND HERZEGOVINA
THE ROLE OF ELECTRONIC PAYMENTS IN THE TRANSITION TOWARD A CASHLESS ECONOMY: EMPIRICAL INSIGHTS FROM BOSNIA AND HERZEGOVINA

Summary/Abstract: In the digitalisation era, the financial sector's transformation has become a global force reshaping economic development by integrating technology, regulation, and user experience into a unified digital framework. This paper examines the impact of electronic payments on the transition to a cashless economy in Bosnia and Herzegovina, with a particular focus on trends, structural changes, and the dynamics of transformation during the period 2020–2024. Contemporary research increasingly recognises card payments as a driving force behind the emergence of cashless societies, emphasising their contribution to reducing reliance on physical cash and enhancing the transparency of financial flows. In this regard, payment cards are not merely a means of transaction, but also a tool for strengthening institutional infrastructure and modernising payment systems. Empirical data from Bosnia and Herzegovina further support this assertion, indicating a growing contribution of card payments to modernising the financial system. Card payments represent a key instrument of digital transformation in the financial sector, particularly in developing countries such as Bosnia and Herzegovina, where they facilitate the acceleration of the shift toward a cashless economy and promote broader financial inclusion. Using descriptive analysis, this study examines the total value of card transactions, the number of transactions performed, and the prevalence of various payment instruments-including ATMs, POS terminals, and internet transactions in Bosnia and Herzegovina. The results indicate a consistent growth in electronic payments in Bosnia and Herzegovina, with internet transactions recording the highest growth rate (over 40%), reflecting the rapid adoption of digital payment tools. These findings suggest that card payments are increasingly integrated into the daily lives of citizens and the operations of financial institutions and businesses, laying the foundation for a more stable, efficient, and transparent financial system. Accordingly, card payments in Bosnia and Herzegovina are not merely a technical innovation but a strategic lever for economic development, fiscal stability, and digital inclusion. Their growing adoption confirms that Bosnia and Herzegovina is gradually moving toward the model of a modern cashless society.

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