The Evolution of Payment Systems: Structural Transformation from Physical Cash to Digital Payment Ecosystems

This study conceptually examines the evolution of payment systems from physical cash-based structures to digital payment ecosystems through the lens of digital economy and governance. Payment systems are treated not merely as technical fund transfer mechanisms, but as institutional infrastructures that organize power relations among money, banks, platforms, and markets. Historically, although cash-based systems offered advantages such as anonymity, universal acceptance, and technological independence, they faced increasing transformation pressures due to rising transaction costs and scalability limitations. Electronic and card-based payment systems represented the first stage of digitalization within a centralized banking architecture, where trust remained largely bank-centered. Mobile and platform-based payment systems, however, shifted control over user interfaces and data flows, integrating payment processes into the broader digital platform economy. This transition has led to the evolution of payment systems from isolated infrastructures into multi-actor, network-based, and data-intensive digital ecosystems. The chapter further analyzes the shift of trust from institutional structures to coded systems, the challenges of data ownership and algorithmic governance, and the structural tensions emerging from cashless society debates. It argues that the transformation of payment systems is not merely a technological progression, but a structural reconfiguration of financial intermediation, platform power, and governance architectures within the digital economy.