ABSTRACT
The
study examined the impact of e-payment on online shopping behaviour in Nigeria.
The undergraduate students of Distance Learning Institute Business Administration,
University of Lagos served as the sample population. The study adopted the
survey research design using primary source of data with questionnaire as
instrument of data collection. A total of 100 copies of questionnaire were
administered to 500 level Business Administration undergraduate students of
Distance Learning Institute, out of which 82 questionnaires were duly filled
and returned. Chi Square test method of data analysis was used to examine the
impact of e-payment on online shopping behaviour. The result of the findings
revealed that price, trust and convenience have significant influence on online
shopping attitudes of consumers. Besides, the result of the analysis showed
that online shoppers are usually skeptical in making online payment either
because of inability to access internet or fear of being compromised. Based on
the empirical findings, the study recommends that e-commerce platform should be
easy to access and navigate to avoid doubt in the minds of the customers and
e-commerce companies should ensure their platforms have the best of security
features and finally regular discounts and update of products and services
should be done to attract customers..
TABLE OF CONTENTS
Pages
Title
page
i
Certification
ii
Dedication
iii
Acknowledgement iv
Abstract
v
Table of
content
vi
CHAPTER ONE: INTRODUCTION
1.1 Background of the study
1
1.2 Statement of Problem
5
1.3 Aim and Objectives of the study
6
1.4 Relevant Research Questions
6
1.5 Relevant Research Hypotheses 6
1.6 Significance of the study
7
1.7 Scope of Study
7
1.8 Definition of terms
7
References 8
CHAPTER
TWO: LITERATURE REVIEW
2.1 Preamble
9
2.2 Theoretical Framework of the Study 9
2.3 Conceptual Framework
11
2.4 E-payments
21
Reference
25
3.0
CHAPTER THREE: RESEARCH METHODOLOGY 28
3.1 Preamble
28
3.2
Research Design
28
3.3
Population of Study 28
3.4
Sampling Procedue and Sample size
29
3.5 Data collection Instruments and
Validation
29
3.5 Method Data Analyses
30
3.7 Limitation of the Methodology
30
4.0
CHAPTERFOUR: DATA PRESENTATION ANALYSIS
4.1 Preamble
33
4.1.1
Data presentation and Analysis according to Research Questions 35
4.2 Test of Hypothesis
39
4.3 Discussion of Findings 49
5.0
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary
43
5.2 Conclusion
44
5.2 Recommendation
44
Bibliography 45
Appendix 49
CHAPTER
ONE
INTRODUCTION
1.1 Background to the Study
The 21st century has
witnessed a great exodus from the traditional business model (Brick) to
Electronic business (Click).This paradigm shift can be associated with the
corresponding increase in the knowledge of information technology and its
advantages. In the emergence of e-commerce, credit cards have long been
represented by electronic means of payment, credit cards in shopping malls.
Many hotels and other places and items could swipe off the card, POS terminals,
ATM cash forms of payment, and online electronic payments. Online payments also
known as electronic currency, broadly speaking, refer to a transaction in the
online exchange of funds. It is a network-based electronic financial and
business card transactions for all types of electronic tools and media. The
electronic computer and communications technologies serves as a means
Electronic data (binary data) stored in the bank's computer system and through
the computer network system in the form of the flow of electronic information
transfer and payment.
Electronic Payment System is the
basis for online payments, and online payments system development is a higher
form of electronic payment. It makes electronic payment easier at any time,
through the Internet directly to the consumer, settlement and form e-business
environment.
With e-commerce being at an early
stage in most third world countries of the world, online shopping trend in
Nigeria is not as advanced as it is in developed countries (Olusoji James
George, Olufemi A., Lasisi Jubril O. and Lucas O., 2015).
Although, people engage in online
banking (ebanking), most people are still not open to the idea of shopping
online and prefer to carry out their transactions traditionally, i.e.
face-to-face. Folorunso, (2006); Adeyeye, (2008); Ajayi, (2008); Ayo, (2008);
Egwali, (2009); Ayo, (2010) identified various contributing factors to
hindering the adoption of e-commerce and online shopping in Nigeria. One of
such factors is accessibility to the Internet.
The ease of access to the Internet
has been identified as one of the factors encouraging the adoption and growth
of e-commerce and online shopping in the UK (Soopramanien and Robertson, 2007).
In contrast, majority of the Nigerian
populace do not have access to the Internet.
In the year 2006 – the number has grown to
5,000,000 (again just 3.1% of the national population). This figure doubled in
2008 with 10million people having access to the Internet. In 2009, the figure
went above double as 23,982,000million people used Internet in Nigeria. By June
2010, the number of internet users in Nigeria has grown to 43,982,200 that is
29.5% of the country’s population. The increasing users of internet in Nigeria
from 0.1% in 2000 to 29.5% of its population in June 2010, revealed that the
use of internet in the country is growing at a sporadic rate and still has the
potential to grow higher (Ayo et al,2011).
Nevertheless, a study recently conducted on internet usage in Nigeria
shows that about 46.1% (86,219,965) of the total population (186,987,563 people) are
internet users and about 53.9% of the total populace (i.e. 100,767,598 people) are
non-internet users (Internet World Stats, 2016). From these percentages, it is
obvious that only a fraction of the general populace uses the Internet and even
those who access it do so through numerous cybercafés scattered all over urban
parts of the country (Ayo, 2006). Cybercafés according to Adomi et al., (2003:489) “are places where
Internet public access services are provided by entrepreneurs for a fee on amount
of data used” and are quite popular among Nigerians because of the high cost of
connectivity by individuals.
However, due to the public nature of
these cybercafés, people are not comfortable carrying out e-commerce activities
there for privacy, security and network reliability issues, and this negatively
affects online shopping trends in the country (Ayo, 2006).
Increasing numbers of people are
gravitating towards more intensive use of the Internet as the accessibility of
technology, the availability of information, and the ability to interact
through the Internet increase and evolve (Changchit, 2006). Obvious
capabilities of the Internet include avenues for gathering information,
purchasing a product, or rendering a service. These advances in Internet
technology allow for the expansion of shopping options beyond traditional
methods that may be more time consuming. Issues with having to physically
gather information with offline shopping methods are alleviated, and customers
are better able to efficiently use their time. For instance, instead of having
to physically visit different stores to compare prices or rely on circular
pamphlets in newspapers, a consumer is able to search and retrieve needed
information through the Internet, this trend has greatly encouraged the
tendency for consumers to shop online.
As Internet usage is increasing, so
is online shopping, especially in those countries whose marketing
infrastructure are well developed (Kau, Tang, and Ghose, 2003). Consumers can shop any time and have
access to products not available in their geographic region. Furthermore, they
are now able to access the Internet, not only from their personal computers,
but from advanced electronic devices such as Palm-Pilots and mobile phones
(Kau, Tang, and Ghose, 2003).Also, due to an increase in high speed Internet
access connections, lower connection costs, and increasing consumer competence,
e-commerce activity will continue to grow as the availability and ease with
which the Internet provides consumers the ability to handle needed tasks
increasingly develops.
In conjunction with the increases in
Internet capabilities, it is estimated that about 53% of Internet users in the
United States have made an online purchase. However, not all consumers are
turning to the Internet for shopping. While the number of Internet users who
have made a purchase at one time is more than half in the United States, this
does not explain the disparity between the number of visits websites recorded
and the number of actual purchases made online. One report shows that although
a web site may receive millions of visitors, only about 3% of those visits
result in a purchase online (Betts, 2001), and according to another study,
about 65% of online shopping carts are abandoned before a purchase is completed
(O’Neill,2001).
An explanation of these occurrences
is that the majority of consumers are going online to window-shop with plans to
make their purchases in a more traditional, offline setting (Forsythe and Shi,
2003). Hence, this study will be examining the impact of e-payment on shopping
behaviour of consumers.
1.2 Statement of the Problem
At
any given time there are millions of people online and each of them is a
potential customer for a company providing online sales. Due to the rapid
development of the technologies surrounding the Internet, a company that is
interested in selling products from its web site will constantly have to search
for an edge in the fierce competition. Since there are so many potential
consumers, it is of the utmost importance to be able to understand what the
consumer wants and needs. The importance of analyzing and identifying factors
that influence the consumer when he or she decides to purchase on the Internet
is vital and since the internet is a new medium, for there have been new
demands set by the consumer. That is why it is crucial for the online
stores/retailers to know what influences the online consumer. Since online
retailing is a new retailing medium and online consumers’ behaviour is diverse
from traditional consumer behaviour, one must identify what influences the
online consumer. Analyzing the process that the online consumer goes through
when deciding and making a purchase over the internet, shows some factors that
consumers consider. They include issues like trust, convenience, pricing,
security with e-payment. These factors need to be identified and taken into
account by online retailers in order to satisfy consumer demands and compete in
the online market. To further understand how these factors influence different
types of consumers, it is important to identify the impact that e-payment have
had on shopping behaviour since.
1.3 Aim and Objective of the Study
The
aim of this study is to examine the impact of e-payment on consumers shopping
behaviour online. While the specific objectives are to:
1) examine
the relevance of making online payments.
2) examine
the behaviour of online shoppers with respect to price, trust, convenience and
security.
3) determine
ways e-payment has influenced online shopping.
1.4. Relevant Research Questions
The
principal question of this research is: what is the impact of e-payment on
online shopping. This research will also try to provide answers to the
following sub-questions in the course of this study:
1) What
is the relevance of online payment?
2) How
does price, trust, convenience and security influence online shopping
3) What
is the influence of e-payment on online shopping behavior
1.5. Relevant Research Hypotheses
H0: Price, trust and convenience have no
significant influence on online shopping attitudes of consumers
H1: Price, trust and convenience have
significant influence on online shopping attitudes of consumers
H0: online shoppers do not like to make
payment online
H1: online shoppers like making payment online
1.6. Significance of the Study
This
study will be significant in the following areas:
v It
will increase the understanding of what e-commerce (online store) really is and
factors that shape consumer’s behavior when shopping online.
v Also
it will create a better understanding of strategies to use in attracting
customers to online stores and increase customer loyalty and constant patronage
v It
will also improve the relationship between the online stores and consumers of
products and services on them
1.7. Scope of the Study
It
will amount to a herculean task to start studying all the online stores in
Nigeria or all the consumers who shop online, hence, the researcher will focus
only on Jumia shoppers with respect to e-payment.
1.8 Definition
of Terms
E-commerce:
E-commerce (electronic commerce or EC) is the buying and selling of goods and
services, or the transmitting of funds or data, over an electronic network,
primarily the Internet.
Consumers: An individual who buys products or services for personal use
and not for manufacture or resale. A consumer is someone who can make the decision whether or not to purchase an item
at the store,
and someone who can be influenced by marketing and advertisements.
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