Abstract:
Banking industry and information technology together has transformed the world. Increase in the practices of internet and other services of information and technology has progressively shifted the paradigm of banking practices from conventional physical banking to branchless banking. Due to convenience, cashless payment mode is preferred by customers as they can buy or sell even from their homes and do not have to carry cash. Also, transactions via this method are quick and save time. These digital services mainly include call center banking, automated teller machine transactions, point of sale transaction, internet banking and mobile banking. Factors like customer should have bank accounts, knowledge on use of mobile and internet services, funds to make exchange etc. play major role for adopting cashless services by the people of a country. In Pakistan, as people still has concern regarding cashless services like cyber security issues, fraud, scamming, attack on privacy etc. which make cashless services difficult to adopt which affect the profitability of banking system. Data will be obtained from the 1st quarter of 2010 to 4th quarter of 2020 totaling to 44 observations. This study was designed to find out the correlation of cashless services on profitability of the banking sector in Pakistan in the recent decade. The result of the study proves that there is positive correlation between cashless banking services i.e. ATMT and POST with profitability of banking system. With increase in the use of cashless banking services, return on equity and return on assets was increased. While CCT, INT and MOBT do not have any significant effect on profitability.
