The study appraise Electronic Payment systems in the Banking industry; A
Study of First Bank Plc. The main objectives of the study are to ascertain the effectiveness of e-payment in First Bank and to determine the
level of security in the e-payment products and platform of First Bank. In
carrying out the study, survey design was employed. The population of
the study comprises the entire two thousand five hundred staff of First Bank
Plc in Lagos. By means of convenience
sampling technique, a sample size of 145 was drawn from the population and this
figures represent the number of those that properly filled-out and returns the
questionnaire on the spot. The study found that Epileptic power supply to a large extent affects the effectiveness of
e-payment in First Bank and that e-banking products and platform of First Bank
is secure and acceptable by the respondents. It was recommended based on
the findings that Central Bank of Nigeria should ensure that the cashless
policy is extended to other states in the country so as to extend e-payment to
all state in the country. Also, the CBN
need to consolidate on its achievements by introducing more beneficial policies
and sanctions where necessary.
TABLE OF CONTENT
Inside title page ii
Table of content vii
CHAPTER ONE INTRODUCTION
Background to the Study 1
Statement of the Problem 3
Aim and objectives of the Study 4
Relevant Research Questions 5
Research Hypotheses 5
of the Study 6
1.7 Scope of the Study 6
1.8 Definition of Terms 6
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Preamble 11
2.2 Theoretical Framework of the study 11
2.3. History of E-Banking 15
Trends in Electronic Payments 17
attitude to E-Banking 26
tools in Banking Operations 27
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Preamble 34
3.3 The Population
of the study 34
3.4 The Sample,
procedure and sample size 34
Collection Instrument and Validity 34
3.6 Method of Data Analysis 35
of Methodology 35
CHAPTER FOUR: DATA
ANALYSIS AND RESULT
4.1 Preamble 37
and Analysis of Data 37
4.3 Test of Hypotheses 43
of Findings 45
FIVE: SUMMARY OF FINDINGS DISCUSSION, AND RECCOMMENDATION
5.1 Preamble 47
5.2 Conclusions 48
5.3 Recommendation 49
TO THE STUDY
Nigeria is predominantly a cash-based economy with a
lot of cash in circulation. Analysts opined that the cash based nature of
payments in the country is responsible for the abysmally low level of
participation in e-commerce where the acceptable medium of settling
transactions is e-payment (Ojo, 2004; Ayo, 2007; Ovia, 2002). The Governor of
the Central Bank of Nigeria embarked on bank recapitalization exercise as a
strategic move to save the Nigerian banking sector from incessant failure and
collapse (Nwanchukwu, 2005; Gbolahan, 2005). The result of the exercise brought
about a reduction of the 89 banks to 25 solid and strong banks through mergers,
acquisition and recapitalization of asset base. Evidently, it has been noted
that virtually all the 25 banks in Nigeria that survived the recapitalization
exercise engaged the use of ICT for efficient service delivery (Ayo et al, 21,
2007). All the banks have one form of e-payment system or the other. The
Nigerian cashless system of payment has been evolving in line with the global
payments evolution. Cashless system of payments and instruments are significant
contributors to the broader effectiveness and stability of the financial
system. Innovations in technology and business models have implications for the
efficiency and safety of cashless system of payments. Cashless system of
payment is defined as a society where transactions is functioning, operated, or
performed without using coins or banknotes for money transactions but instead
using credit cards or electronic transfer of funds. New technology and new
participants in the cashless system payments, for example non-bank providers
will support the wider financial inclusion agenda (Sprague and McNurlin, 2003).
Particularly the most prominent form of e-payment
system in Nigeria is the Automated Teller Machine (ATM) card (Alao, 2009). It
remained dominant over the years both in volume and value but there is a
colossal amount of money lost in Nigeria due to ATM fraud through ATM card
cloning, Personal Identification Number (PIN) theft among others and government
had resorted to removing ATM from public places as well as installing security
cameras at the ATM locations to track the activities of fraudsters. However, the
level of ICT usage notwithstanding, the level of adoption of e-payment by the
citizen is still very low (Sprague and McNurlin, 2009).
In the words of Ayo and Ukpere (2010), e-payment
systems refer to the automated processes of exchanging monetary value among
parties in business transactions and transmitting this value over the
information and communication technology (ICT) networks. The common e-payment
channels include the payment cards (debit or credit), online web portals, point
of sales (POS) terminals, automated teller machines (ATM), mobile phones,
automated clearing house (ACH), direct debit/deposit and real time gross
settlement (RTGS) system (Nnaka, 2009).
An Electronic Payment System (EPS) is a form of
inter-organizational information system (IOS) for monetary exchange, linking
many organizations and individual users. This may require complex interactions
between the stakeholders, the technology and the environment. The unique
characteristics of EPS/IOS also differentiate it from traditional internal
based information systems; it is more complex and multifaceted technologically,
organizationally and relationally (Kumar and Crook, 2009), highlighting the
importance of collaboration and the need to bring all the facets together. EPS
transcends organizational boundaries, thus the collaboration of the stakeholders
and sharing of resources and how it interacts and affect the elements of the
payment system may also be key issues in the development of EPS (Briggs and
Furthermore, EPS encompasses the total payment
processes, which include all the mechanisms, technological systems,
institutions, procedures, rules, laws etc. that come into play from the moment
a payment instruction is issued by an end-user. Different kinds of rules,
regulations, mechanisms, technology and arrangements have therefore been put in
place by trading partners, markets and governments (stakeholders involved in
EPS development) in all countries and throughout time to develop effective
infrastructure of monetary exchange, commonly referred to as payments systems
(Bossone and Massimo, 2001).
Alao (2009) reiterated that the other media such as the internet payment, POS
and mobile payments are still at their infancies. The level of involvement of
these instruments of payment presents a clearer picture of the low level of
involvement of Nigeria in e-commerce, knowing fully well that ATM cards are not
suitable for international settlement of transactions. However, the nation’s
quest of migrating from cash to cashless economy has been on the front burner. Boonstra
and de Vries, (2005) posited that
to meet the target of becoming one of the leading world economies by the year
2020, efforts must be made to embrace electronic payment system in its
entirety. It was in this consciousness that the Central Bank of Nigeria (CBN),
the apex regulatory body of the banking sector, came up with a reform policy to
check the increasing dominance of cash in the banking sector in order to
enhance e-payment system in the economic landscape. It is on this background
that this study sets to appraise the role of electronic banking systems
in the cashless economy.
STATEMENT OF THE PROBLEM
move to a cashless society has been a topic of discussion for a long time.
First, in the 1970s and 1980s plastic debit and credit cards were expected to
take the place of cash. And then in the 1990s and 2000s the implementation of
chip cards and, e-money was to replace cash. But still, cash remains
popular and its market share has fallen only gradually over the years. However,
there are lot of problems
associated with a cash-based economy such as money laundering, insecurity of
cash, delayed banking payments, and slow development in the country’s economy.
To improve these problems, the Central Bank of Nigeria has championed the
introduction of cashless economy as a result of the rapid growth in
Information and Communication Technology (ICT), electronic commerce is now
acting as a means of carrying out business transactions through electronic means
such as internet connections.
one of the greatest threats to e-payment in Nigeria today is the increasing
trends of identity theft. This remains a major challenge to the internet age. Customers using the e-banking services are not
adequately protected as cases of fraudsters hacking into people’s accounts
through their passwords and other account information is very rampant (Helmbrecht,
major issue with e-banking is the problem of internet network failure. This
remains a major issue affecting the effectiveness of cashless system.
Similarly, some members of the public
are averse toward using the e-banking system and platforms, especially the
Automated teller Machine (ATM) because they believe rather than reduce the rate
of carrying cash, it increases the same , because with an ATM card , they have
access to cash anywhere, moreover, many believe it indulges them into engaging
in extravagant spending. These among other
are some of the problems this study sets out to investigate.
1.3 AIM AND OBJECTIVES OF THE STUDY
The main aim of this study is to appraise Electronic Payment
systems in the Banking industry; A Study of First Bank Plc.
The specific objectives of the study are to:
effect of epileptic power supply on the effectiveness of e-payment in First
relationship between e-payment and the Nigerian business environment
level of security in the e-payment products and platform of First Bank.
the level of acceptance and adoption of the e-payment products of First Bank by
the banking public
advantages of e-payment to First Bank
Find out the
extent to which the deployment of e-payment has enable First Bank to access new
RELEVANT RESEARCH QUESTIONS
The following research questions will direct the
extent does epileptic power supply affect the effectiveness of e-payment in
Is there a
significant relationship between e-payment
and the Nigeria business environment
are the e-banking products and platform of First Bank?
What is the
level of acceptance and adoption of the e-payment products of First Bank by the
What are the
advantages of e-payment to the selected banks?
Find out the
extent to which the deployment of e-banking has enables First Bank to access
RELEVANT RESEARCH HYPOTHESES
Ho: There is no significant relationship between
e-payment and the Nigerian business environment.
HI: There is a significant
relationship between e-payment and the Nigerian business environment.
Power supply does not have a positive effect on the effectiveness of e-payment
on First Bank of Nigeria.
HI: Power supply has a positive effect on the
effectiveness of e-payment on the First Bank
SIGNIFICANCE OF THE STUDY
The significance of
this study is that primarily it will stimulate an academic incursion in to the status,
adoption and deployment of e-payment
in Nigeria. The study will be of great importance to banks as it highlights the
importance of deploying e-banking strategies in their operations to make
business easy and help retain their customers. The study will also be useful to the customer of the banks because it
highlight the conveniences in e-banking. The study will give an insight to how customer can bank with ease.
The study will also serve as a reference to
student carrying out study in the research domain. The study will also be of importance
to the general public on the economy as a whole
because with e-banking people no longer have to go about with cash on them;
they will make use of electronic purse (debit
and. credit cards). It gives them the ability to have access to their money at
every point in time irrespective
of holidays and weekends. The study will also highlight other added service
they can enjoy without getting into the banking
1.7 SCOPE OF THE STUDY
of this study is restricted to assessing the role of electronic banking systems in the
cashless economy; A Study of First Bank Plc.
1.8 DEFINITION OF
In other to remove ambiguity and give clearer
understanding of this study, the following concepts are defined:
Electronic payment systems
(EPS) – This refer to those
where the processing of payment instructions is carried out by the banking
banking – This is commonly known as
e-banking, is the remote delivery of new and traditional banking
products and services through electronic delivery channels.
commerce – This is commonly known as e-commerce, is a type of industry where buying and selling of
product or service is conducted over electronic systems such as the Internet
and other computer networks.
society – This is a society
where no one uses
being made by credit cards,
cards, cheques or direct transfer
from one account
to another. In other word, it is a society in which consumers pay using credit
or debit cards, electronic funds transfer, or shop online instead of paying by
cash or bank cheques.
Cashless system – This is a (Cashless
Systems) include any payment systems that allow a machine, such as a vending
machine, to accept payment in a form other than cash.
Automated Teller Machine (ATM) - This
is a computerized telecommunications device that enables the clients of a financial institution to
perform financial transactions without
the need for a cashier, human clerk or bank teller.
ATMs are known by various other names including ATM machine, automated
banking machine, "cash machine".
Credit card – This is a payment card issued to users as a system
of payment. It allows the cardholder to pay for
goods and services based on the holder's promise to pay for them.
Debit card – This is a plastic payment
card that provides the cardholder electronic access to his or
her bank account(s) at a financial
institution. Some cards have a stored
value with which a payment is made, while most relay a message
to the cardholder's bank to withdraw funds from a payee's designated bank
account. The card, where accepted, can be used instead of cash
when making purchases. In some cases, the primary account number is
assigned exclusively for use on the Internet and there is no physical card.
These are the constraints that affect smooth operations of business activities.
Prospects – This is an apparent probability of advancement, an anticipation or
expectation of success or profits etc the outlook
for the future.
Policy – A plan of action agreed or
chosen by government.
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