Paper currency vastly expands the money supply. With Banks, people can borrow, lend, and invest these new riches, increasing the wealth and economic power of the entire city. Also with the new economic prosperity, cities can afford to pay Pikeman to defend them.
The first banks developed in response to the great risk of early trading, the earliest known being the Egibi Bank in Babylon around 600 BC. But Bandits, uncertain foreign markets, and a multitude of foreign currencies made caravans and trade ships very vulnerable. It was even more difficult to transfer funds from the city where the trade originated to other cities and civilizations where it was needed to buy goods. The answer was a new type of artificial money made of paper: intrinsically worthless, but symbolizing actual coins or other wealth stored somewhere else. The first simple paper "drafts of deposit" or receipts for coinage placed in the bank, were printed in China in 812 AD, and by 1023 the Chinese government was issuing paper money backed by stored government gold. Just a few years later Italian bankers were issuing "Instruments of Credit" on paper, which could be presented at any other bank branch in foreign cities and exchanged there for coin. This convenient method of transferring money to where it was needed made international trade exquisitely easy, and with the new banking services European trade within Europe and with other civilizations began to expand rapidly.
As the cash economy took off within the great cities of Europe, they applied the wealth to their military as well. Virtually all of the cities had had some kind of militia or local defense forces, but by the 14th century they were able to hire and pay full time larger and larger forces of infantry for the defense of their cities. Most of these troops were armed with pikes rather than spears, the difference being that the pike was up to 21 or 24 feet long and held in both hands rather than one. A hedge of pikes, whether it was composed of Swiss, Scots schiltron or Flemish city militia, could stand off a charge of knights easily. To break it the knights required missile troops, and so combined arms became paramount in warfare once again.