Barriers to Cashless Payment Adoption among Millennial Civil Servants in Johor, Malaysia

Abstract

The global shift toward cashless payment systems has transformed financial transactions. However, millennial civil servants in Johor, Malaysia, face notable barriers to such adoption. This study examines the social, economic, and psychological barriers that hinder the adoption of cashless payment methods among this group. Using a qualitative approach and case study design, with in-depth, semi-structured interviews conducted with six informants, the study highlights three key barriers, i.e., social, economic, and psychological barriers. The social barriers include peer influence, local businesses’ preference for cash, syariah compliance issues, concerns about fraud and scams, data privacy concerns, and failed and erroneous transactions. Economic barriers include transaction fees, financial illiteracy, and inconsistent incentives across platforms. Finally, stress caused by poor internet connectivity and system downtime is categorized under the psychological barrier. These issues, rooted in social, economic, and psychological factors, hinder the adoption of cashless payments despite Malaysia’s digital economy initiatives outlined in the 2021 Malaysia Digital Economy Blueprint. The study further recommends targeted actions, such as subsidizing SMEs for digital tools, cybersecurity education, syariah-compliant payment options, and peer-led awareness campaigns. These strategies aim to enhance trust and accessibility, enabling the public sector to meet Malaysia’s financial inclusion goals. This research enhances understanding of barriers in developing economies and guides policies to promote fair adoption of cashless systems among government employees.