ABSTRACT
This research is on the
investigation of cashless policy and consumer acceptability in umuaiah
metropolis abia state. The general objective of this study was to investigate
the cashless policy and consumer acceptability in Umuaiah metropolis Abia
state. specific objective (1) To determine the level of acceptability of the
CBN cashless policy on consumers (2) To examine the level of preparedness of
the financial institutions in the terms infrastructures to provide the needed
service to customers (3) To examine whether there is any incentive to encourage
the consumers to embrace the policy to solve the research problem, primary and
secondary data were collected. the research instrument used in collecting data
was questionnaires. The respondents comprised of the relevant staff of and
management of Diamond Bank plc Timber Branch, Abia state.in organizing and
presenting data collected, tables, frequencies and percentage were used. The
various hypothesis formulated were tested using chi-square. Data analysis and
interpretation gave the following findings. The respondents were undecided
about the majority of Nigerians who operate basic technological appliances. The
respondent said that they strongly disagree that cashless policy a can prevent
money laundry and –corruption and the respondent agree that the era of cashless
policy will be advantageous to all sector of the economy.
TABLE OF CONTENTS
Pages
Title page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
Table of contents vi
List of tables viii
CHAPTER
ONE
Introduction
• Background of the study: 1
• Statement of Problems: 5
• Objectives of the study: 7
• Research Hypothesis 7
• Research Question: 8
• The significance of the study 8
CHAPTER TWO
Review of related literature
2.1 Academic review: 9
2.1.1 Cashless Economy Policy: 9
2.1.2 Cash-Based Nigeria versus
“Cashless” Nigeria: the Rationale for
Policy Shift in Payment System and Cashless
Policy. 9
2.1.3 E-transactions and Consumer Protection: 14
2.1.4 Costs of the Cashless Economy 17
2.1.5 Challenges of Cashless Economy 22
2.1.6 Benefits of cashless economy 25
2.2 Theoretical Review 26
CHAPTER
THREE
METHODOLOGY
3.1Research design: 37
• Area of the study: 37
• Population of the study: 38
• Sampling Techniques and method: 38
• Determination of sample size: 39
• Measurement of instrument 41
• Source Of Data 42
• Validity and reliability of the
instrument 42
CHAPTER FOUR
FINDINGS AND DISCUSSONS 43
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS 85
REFERENCES
LIST OF TABLES
Tables Title Pages
4.1 Above showed the number of
questionnaire distributed and
returned. Out 369 questionnaire
distributed 305 (82.2%) were
returned and were used for the study 43
4.2 Response
on whether respondents/head about cashers
economy
policy 43
4.3 Responses
on through which mean respondents came to
know
about cashless economy policy 44
4.5 Responses
on whether the majority of Nigerian law
operates
basic technological appliances with regard to
e-payment services 45
4.6 Responses
on whether cashless economy policy will prevent
money
laundry and corruption 47
4.7 Responses
on whether the era of cashless economy
will
be advantageous to all sectors of the economy 48
4.8 Responses
on the whether electronic development are emerging
and
advancing rapidly all areas of financing institution
and
markets 49
4.9
Responses on whether
Nigerians are well aware and sensitized
of
the acceptance of the cashless economy policy 50
4.10 Responses on whether the acceptance
of cashless economy
policy
will enable Nigeria achieve vision 2020 51
4.11 Responses of whether
infrastructures available in Nigeria
are
adequate to ensure a smooth run of cashless
economy
policy 52
4.12 Responses on whether the level of
literacy and acquaintance
with information communication technology
(ICT) among
Nigeria
is adequate to enable the implementation to the
cashless
policy 53
4.13 Responses
on whether the acceptance of the cashier policy in
Nigeria
will bring about business, price and economic stabilization 55
4.14 Respondents on whether the operation of cashless policy in
Nigeria
is a wise strategy for fast tracery growth in the
Nation’s
Financial sector 56
4.15 Reponses
on whether the cashless policy has been general
accepted
by the Nigerians 57
4.16 Responses on how long it takes customers to make transaction
using any electronic means 58
4.17 Responses on whether Diamond bank receive customer some
incentives
to enable them to embrace the cashless policy 59
4.18 Responses on whether the
majority of Nigerian can operate
basic
technological appliances with regard to e-payment services 60
4.19 Responses on whether cashless economy policy will prevent money
laundry
and corruption 61
4.20
Responses on whether the era of cashless economy will be
advantageous
to all sectors of the economy 62
4.21 Responses on whether cashless policy will
reduce cost of banking
Services
and drives financial inclusion by providing more
efficient
transaction option and by providing more efficient
transaction
options and greater reach for Nigerian- Diamond bank 63
4.22 Responses on whether e-payment tends to
maximize business
opportunity by extending customers base by
boosting cash flow,
reducing
cost, enhancing customer services and improving
competitive
advantage 65
4.23
Responses on whether electronic development are emerging and
advancing
rapidity in all financial institution and market 66
4.24 responses
on whether Nigerians are well aware and sensitized
on
the acceptance of the cashless economy policy 67
4.25
Responses on whether the acceptance of
cashless economy policy
will
enable Nigeria achieve vision 2010. 68
4.26
Responses on whether infrastructures available in Nigeria banking
institutions
are adequate to ensure a smooth running of cashless
economy
policy 69
4.27 Responses on whether the level of literacy and acquaintance
information
communication technology (ICT) among Nigerians
adequate to enable the implementation of the
cashless policy. 71
4.28 Responses on whether the cashless economy policy will be very
effective
in solving the problems faced in the
Nigerian
financial sector 72
4.29 Responses on whether cashless
policy will help in breaking down the
traditional
barrier hindering the financial inclusion of millions
of
Nigerians 73
4.30
Responses on whether the acceptance of the cashless policy in
Nigeria
will bring about business, price, and
economic
stabilization 75
4.31
Responses on whether the operation of a
cashless policy in Nigeria
is a wise strategy for fast tracking growth in
the nation’s
financial
sector 76
4.32:
Responses on whether the cashless policy has been general accepted
by
the Nigerians 78
CHAPTER ONE
Introduction
1.1
Background
of the study:
Contrary
to what is suggestive of the term, cashless economy does not refer to an
outright absence of cash transactions in the economic setting but one which the
amount of cash-based transactions are kept to the barest minimum. It is an
economic system in which transactions are not done predominantly in exchange
for actual cash. It is not also an economic system where goods and services are
exchanged for goods and services (the barter system). It is an economic setting
in which goods and services are bought and paid for through electronic media.
It is defined as “one in which there are assumed to be no transactions
frictions that can be reduced through the use of money balances, and that
accordingly provide a reason for holding such balances even when they earn rate
of return” (woodford, 2003).
Cashless
economy does not mean a total elimination of cash as money will continue to be
a means of exchange for goods and services in the foreseeable future. It is
financial environment that minimizes the use of physical cash by providing
alternative channels for making payments (Alionu, 2012).
The
cashless economy policy of the CBN is designed to provide mobile payment
services, breakdown the traditional barriers hindering financial inclusion of
millions of Nigerians and bring low cost, secure and convenient financial
services to urban, semi-urban and rural areas across the country. This has however
become an albatross to some elites, the poor, the uneducated and traders
(Eromosele and obinna, 2010). Valentine obi, Managing Director/CEO e-Tranzact
International PLC, a leading provider of mobile transaction services defines
cashless society as one where no one uses cash, all purchases being made by
credit cards, charge cards, cheques and direct transfers from one account to
another. In other words, it refers to the widespread application of computer
technology in the financial system. According to him, in the western world
today, almost 97% of transactions are done without physical cash being
exchanged and this has greatly reduced cost, corruption and money laundering.
In Nigeria today, it is the opposite-with majority of transactions done with cash.
In
a cashless economy, how much cash in your vault is practically irrelevant. You
can pay for your purchases by any one of a plethora of credit cards or bank
transfer (Roth, 2010). Some aspects of the functioning of the cashless economy
are enhanced by e-financed, e-money, e-brokering and e-exchange. These all
refer to how transactions and payments are affected in a cashless (Ashike, 2011).
Electronic
cash is a system which allows individuals to purchase goods or services in
today’s society without the exchange of anything tangible. The term becoming
more acceptable as the world makes a shift towards a cashless society. Since
the 1960’s government and financial institutions globally have made slow, but
steady steps towards the goal of a society without cash. The cashless society
is being said as a more convenient method of payment, and a method of
preventing crime all the way from the robbery of cash from an individual to the
extent of money laundering among crime syndicates and cash stocking at home by
corrupt government officials.
The
case may conveniently be made that the future of all businesses, particularly
those in the service industry lays information technology. In fact, information
technology has been changing the way companies compete. Banks are companies
engaged in banking business.
Their
future is, therefore linked to the pervasive influence of information
technology.
At
the down of January 1, 2012, the pilot scheme of mobile money, one of the
financial services introduced by the Central Bank of Nigeria, via CBN circular
Ref: No. COD/DIR/GEN/CIT/05/031 dated 20th April, 20111, to achieve a
cashless economy took off in Lagos, the commercial nerve centre of the country.
Barely a year after the Central Bank of Nigeria, introduce cashless policy in
Lagos State, Abia, Anambra, Ogun, Rivers, Kano, And FCT, Abuja have been
enlisted to do same. Other financial services under this payment platform are
consumer accounts information and updates, alerts, which have been in existence
but not widely subscribed to by accounts holders. Payment of bills, person to
person transactions and remittances in different forms also is part of cashless
economy drive. With the introduction of the mobile payment, Nigeria is only
keying into a fast evolving global payment system. The mobile money platform is
a technology driven payment system that will open several other business
opportunities in the economy.
Essentially
mobile money payment system allows user make payments with their GSM phones. It
is a saving and transfer system that turns GSM phones into a savings accounts platform,
allowing the owner save money in it and from which withdrawals of transfers
cloud be made. Under the payment systems, customers could do their normal basic
financial transactions on a daily basis by making payments for goods and
services or by engaging in person to person transfer directly on their GSM
phones. For instance, the system also allows for payment to be made through a
mobile phone after purchase has been made at a supermarket or shopping mall.
Through the system, users can also pay utility bills, school fee, flight and
hotel bookings and house rents, among other transactions, using a mobile phone
device. Dugeri, Michael (2013).
Recently,
i.e. 2013, school of Postgraduate Studies, Ebonyi State University, Abakaliki
introduced students’ identity card that
has ATM facilities which can enable them load cash to pay their school fees,
make withdrawals and some other transactions. But up to this very moment many
students have not started making use of this facility because many of them
don’t know how to use it and also for fear of uncertainty.
1.2
Statement
of Problems:
The
last few months in the Nigeria financial sector have witnessed a growing chorus
of voices calling for a shift from cash-based economy to cashless economy. The
move is fast becoming a top priority for government, NGOs and companies focused
on expanding financial access to the underserved. Recent statistics show that
nearly 2.5 billion people (almost half the world’s adult population) do not
have access to the financial services without basic payments and savings
accounts, money is often kept in cash under the mattress then moved around from
person to person drastically increasing the risk of theft or loss. Even a task
as simple as paying a bill in person to person via cash, can be unsafe, costly
and time consuming. The implications of this financial exclusion are
significant and far-reaching reinforcing the cycle of poverty and slowing
economic progress. Information Technology plays an important role in bringing
about sustainable development in every nation. Without an optimal use of
information technology, no country can attain a speedy socio-economic growth
and development (Dugeri, Michael, 2013). The idea of cashless economy or
e-banking first comes into our everyday lexicons with the disclosure of the
apex bank to introduce it. This intention, laudable as it has been greeted with
lots of skepticism as captured by Gibson who brought religious dimensions into
the disclosure. He said, “I am foreseeing the ANTI-CHRIST stepping in and the
fulfilment of the biblical prophecy that a time for cashless society will come
and nobody will buy or sell except you have a number”. This short quite aptly captures
the feeling of Nigerians who believes amongst others, that it is a sign of
biblical end times. With such feeling of skepticism among the populace, many
have doubted the workability of the policy (Ochei victor, 2013). Also the
policy has since been affected by many factors namely ineffective sensitization
campaign exercise; inadequate protection of theinterest of merchants and people
in the informal sector, non-availability of Point-of-Sale (POS) terminals as
well as other technological challenges. Thus, these challenges have seriously
affected the implementation of the [policy. It is therefore the belief that the
move is too idealistic in a country like Nigeria where a larger percentage of
their population has low level of functional literacy skills and resides in
rural areas where compelling them to travel long distances in order to use
these services. It therefore becomes pertinent to examine the level of
acceptability and adoption of the cashless economic policy in Nigeria.
1.2.1
Objectives
of the study:
The
general objective of this study is to review literatures on cashless policy and
consumers acceptability which has been developed by different researchers, that
is applicable in different business (marketing), especially the cashless
society in Nigeria. Specific objectives are:
1. To
determine the level of acceptability of the CBN cashless policy on consumers
2. To
examine the level of preparedness of the financial institutions in the terms infrastructures
to provide the needed service to customers.
3. To
examine whether there is any incentive to encourage the consumers to embrace
the policy.
1.3
Research
Hypothesis
The following
hypothesis will be tested:
Ho1: the level of
acceptability of the CBN cashless policy is low.
HO2: the level of
infrastructure by the financial institution to provide the needed services is
high.
HO3: there are no
incentives to encourage consumers to embrace cashless policy.
1.5: Research Question:
1. What is the
level of the acceptability of the CBN cashless policy?
2. What is the
level infrastructure by the financial institution to provide the needed
services to customers?
3. Is there any
incentives to encourage the customers to embrace the policy?
1.6 The significance of the study:
This
study is targeted at determine the level of acceptability and adoption of the
CBNs cashless policy on consumers, considering the challenges facing the use
and the acceptability and adoption of the policy, therefore this study will
educate the general public on the need for the acceptance and adoption of the
cashless policy educating the general public of the advantages of the policy.
Furthermore, this study will also educate stakeholders in the financial sector
on ways to solve the problems limiting the acceptance and adoption of the CBNs
cashless policy.
Finally,
it will serve as a reference point for researchers, consultants, academia and
other interested persons in their respective endeavor or functional areas.
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