The recent cashless policy of the Central Bank of Nigeria CBN has generated mixed reactions, controversies and public debates over the citizens’ preparedness and relevance of the policy. For1 instance, public argument on the one hand is that banking services in Nigeria are faced with low penetration, financial exclusion and poor infrastructure.
Notwithstanding, the CBN has made it known that there is no going back on the policy because of the enormous challenges and cost associated with the cash based system, Clearly, according to the CBN governor, the policy is aimed at reducing the cost of cash management which was estimated at N114. 5 billion in 2009 and projected to reach N200 billion by 2020.
Further, he argued that the policy was not to scare customers but make banking easier and more convenient as Nigerians would be encouraged to use internet mobile banking and point of sale machines to make bulk payments. Banks in the country and the regulators seem to have taken a common front. This is understandable. Clearly, banks of the future realize that the banking of tomorrow requires more of electronic manipulations and shuffling of bits-based money and other banking transactions, instead of paper.
Paper based transactions are being replaced by card payment both debit and credit card for making payment online or making purchases at supermarkets, hotels obtaining services such as education, settling debts and transfering funds on electronic-based platforms over Automated Teller Machines, the Internet, the telephone and now through point of Sales terminals.
Whether a bank would be successful or not depend on the extent to which it is prepared for the full take-off of the e-payment system, its infrastructure and IT investment, its readiness to forsee and overcome nagging problems, its level of innovation and adaption or compatibility with the Nigerian business environment. Although, this has been tip to be a major competitive ground for banks in Nigeria nonetheless the doubts of success pervades.
This study however desires to unravel the operations, challenges and prospects of the recent general adoption of the point of Sale mode of electronic payment system in Nigeria. 1. 1Problem Statement Nigeria have not yet realize the full benefits of the technological advances in electronic payment such as the use of debit cards on point of Sale terminals and automated teller machines (ATM), the Internet, mobile phones. Payment for goods and services in Nigeria is characterized by long queues; long distance travelling and time wasting that generally affect business activities and ultimately economic development.
Payment for goods and services, settling utility bills, and money transfers has been a major headache for individual and firms in Nigeria resulting in declined business activities and huge debt to most of the utility providers (Sarpong, 2003). The banking halls continue to be immersed with the long queues as people come in to collect their monthly wages or salaries. Many people continues to hold large sums of money outside the banking system as a result of the ordeal one has to go through before withdrawing money or making payment.
However, faced with such problems in the payment process, only a few payment solutions have been introduced so far in Nigeria to solve them. Cash still remains the most popular retail payment instrument, despite the increase in the introduction of electronic payment schemes in the country. 1. 3Objectives of the Study The study seeks to add to the body of knowledge in behavioural and information science. The study shall examine the operation, problems and prospect of utilization of electronic payment system.
The aspect of the electronic payment system that will be examined that will be examined in this study is the point of Sale terminals commonly used in merchant premises such as hotels, supermarkets, bank premises and other locations with such facilities. In order to pursue this main objective, the following specific objectives shall be pursued: 1. To examine the relative advantage of electronic payment system at the points of sale on customer service by banks in Nigeria.
To examine the problems facing the implementation of electronic payment system at the point of sale terminals in Nigeria; 3. To examine the prospect of electronic payment system at the point of sale for Nigerian economy. 1. 5Justification for the Study This research study would enlighten the stakeholders in the banking sector that is, the public, respective bank customers, banks’ regulatory authorities, the academia and interested persons and organizations on the adoption of electronic payment system.
The research shall basically examine the operations, problems and prospects of the newly adopted electronic payment system by the Central bank of Nigeria which include the use of debit and/or credit cards for making purchases, settling debts and exchange through the use of point of Sale in Nigerian business environment and suggests ways by which they could be tackled. Scope of the Study The study shall examine the operations, problems and prospects of electronic payment system at the point of sale terminals in Nigeria.
The study shall rely on empirical evaluation of the adoption of electronic payment system at the point of Sale terminal in Nigeria. The study population shall comprise users of point of Sale terminal in 2 local governments in Lagos state. Methodology The study shall rely on cross sectional data generated from primary sources. The target population is bank account holders in 2 local governments in Lagos state while the sample population shall be 250. The sampling techniques shall be based on random sampling.
The target points of Sale terminals shall range from those found within the bank premises and those with merchants. The research instrument is a 5-point Likert scale questionnaire. The research analysis shall make use of percentages, frequencies while, the test of hypothesis shall rely on the ordinary least square correlation analysis to test the significance of correlation/association between the target explanatory and explained variables. 1. 7Breakdown of the Study into Chapters
Clearly, in chapter one the researcher undertake an introduction of the study while in chapter two, the background of electronic payment system in Nigeria is made. This includes the subtopics such as the origin of electronic banking system in Nigeria, Volume of transaction under e-payment compared with other countries. Chapter three shall undertake the review of related literature while data shall be presented, analyzed and interpreted in chapter four. Finally, the summary, conclusion and policy recommendation shall be provided