Abstract
This research project focuses on investigating the use of point of sales (POS) systems in enhancing service delivery in rural areas in Nigeria. With the increasing adoption of technology in various sectors, including banking, retail, and healthcare, the use of POS systems has become more prevalent. However, there is limited research on how the implementation of POS systems specifically impacts service delivery in rural areas. The study will examine the benefits and challenges of using POS systems in rural settings, including improved efficiency, increased access to financial services, and enhanced customer experiences. Data will be collected through surveys, interviews, and case studies to explore the impact of POS systems on service delivery in sectors such as healthcare, agriculture, and small businesses in rural communities. By analyzing the findings, the research aims to provide insights into the effectiveness of POS systems in improving service delivery in rural areas in Nigeria. The results of this study will inform policymakers, businesses, and organizations on the potential of POS technology to bridge the service delivery gap between urban and rural areas, ultimately contributing to the development and growth of rural economies in the country.
TABLE OF CONTENTS
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Research Problem
1.3 Objectives of the Study
1.4 Research Questions
1.5 Research Hypotheses
1.6 Scope of Study
1.7 Significance of the Study
1.8 Organization of the Project Report
CHAPTER TWO
LITERATURE REVIEW
2.1 Conceptual Clarifications
2.1.1 Concept of POS
2.1.2 Usefulness of POS System
2.1.3 Reliability of POS System
2.1.4 Speed of POS System
2.1.5 Challenges of POS System
2.1.6 Customer Satisfaction and Service Delivery
2.1.7 POS System and Service Delivery in Rural Areas in Nigeria
2.2 Related Theories
2.2.1 Technology Acceptance Theory
2.2.2 Innovation Diffusion Theory
2.2.3 Theory of Reasoned Action
2.2.4 Contrast Theory
2.3 Review of Empirical Literature
2.4 Theoretical Framework
2.5 Conceptual Framework
CHAPTER THREE
METHODOLOGY
3.1 Research Design
3.2 Population of the Study
3.3 Sample and Sampling Techniques
3.4 Method of Data Collection
3.5 Measurement of Variables
3.6 Reliability and Validity of the Research Instrument
3.7 Model Specification
3.8 Method of Data Analysis
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS
4.1 Data Presentation
4.2 Demographic Representative of the Respondents
4.3 Descriptive Analysis
4.4 Test of Hypotheses
4.5 Discussion of Findings
CHAPTER FIVE
SUMMARY CONCLUSIONS AND RECOMMENDATIONS
5.1 Summary of Findings
5.2 Conclusions
5.3 Recommendations
REFERENCES
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Technology plays an essential role in all aspects of people’s lives such as, education, transportation, communication, and business (Hauert, 2017). Technology helps business people to operate companies more effectively and efficiently (Gregory, 2018). Digital payment systems technologies have risen to position as a critical determinant of economic growth and market competitiveness. With the continuous growing of information technology and the internet, payment systems have taken a new direction, as electronic money is steadily replacing paper money and coins. Traditional payment instruments like bank notes are gradually fading out as an acceptable mode of payment for transactions as more electronic payment channels become applied and perceived as better alternatives across the world (Bonugli, 2016).
The advent of the liberalization of the telecommunication industry in Nigeria in 1999 opened a lot of business opportunities in many facets of the economy both in urban and rural communities. One of such opportunities is the use of Point of Sale (POS) machines in businesses and financial transaction. Point of sale terminals emerged in 1979, when Visa introduced a bulky electronic data capturing terminal which was the first payment terminal. In the same year magnetic stripes were added to credit cards for the first time. This allowed card information to be captured electronically and led to the development of payment terminals (Wikipedia 2022). The POS although has been in use since 1879 in manual form. It has undergone reformation from manual to electric in early 1900 and in the past two decades it has gone into mobile connection (Fergus, & Ikechukwu, 2022). In 2013, the Central Bank of Nigeria (CBN), in a way to implement its policy of financial inclusion and cashless economy in Nigeria gave credence to the use of POS as an agent tool for agency banking (CBN, 2011). This has made the use of POS in Nigeria very popular for the past ten years. Presently. There are about 542,109 POS terminals in Nigeria as at December 2021 (Doris, 2022).
A Point of Sale (POS) terminal is a device that provides customers of banks with access to their bank account to make purchase of goods and services in different commercial centers where this specific mode of payment is deployed. The inference of this is that customers can make payment for goods and services without essentially coming in contact with physical cash as the purchase price would directly be debited from the buyer’s bank account and credited on the seller’s account upon the completion of the purchase transaction (Olanipekun 2013). The POS machine solves the problem of carrying cash and significantly decreases cash handling and management cost for both financial institutions and different business owners. Moreover, POS accept not only domestic debit and prepaid payment cards, but also international debit and credit payment cards. This gives a great opportunity for Nigeria merchants in widening their source of income, through entertaining all types of their customers whether they are paying for the purchase using payment cards or physical cash (Addis, 2015).
Moreover, apart from widening the choice of payment for both cardholders and merchants themselves, having a POS machine reduces the manual processes involved in serving customers and permits service providers to focus on important activities other than cash management. Point of sale software gives business owners a convenient way of finding out customers and of recording sales. It can keep a record of the shop inventory. It can print out receipts; perform credit card processing, track customers, etc. Point of sale software eases the flow at checkout terminals while recording all the data which will assist to make better business decisions (Nilesh, & Sachin, 2020).
Operations in business have shifted from a traditional approach operation to being technology oriented because of the lower cost of operations. Consequently, Small and medium scale businesses in rural areas which do not adapt to the change would not be competitive and would not survive (Olenski, 2016). A POS system is one of the technologies that could be applied to most SMEs in rural areas and increase their service delivery (Nangia, 2017). This is the reason why a POS system is becoming a popular fixture at a check-out counter of most retail businesses. However, It seems that appropriate and adequate awareness creation and culture has not been made for different groups of people and societies in the rural areas to utilize electronic payment channels properly equally with the development and adoption of electronic banking infrastructures. This has created a huge gap on penetrating the market with such solutions and position the electronic products in customer’s mind and POS services are not exception to this (Javadin, 2008).
In this financial inclusion drive, there have been many agents of the banks which are using these POS machines as tools for transactions. The big question still remains how safe are customers money while using the POS machines? The rural dwellers in Nigeria are mostly peasant farmers whose livelihood depends on the sales from their cash crops. The average cash is always very small, and any loss of the smallest kobo means very much to them. Some also depend on their children who live in the cities for livelihood. This means that any loss of money through any form of e-payment systems means a lot for them. This will discourage them and also affect the trust index both on the system and operators (Fergus, & Ikechukwu, 2022). Therefore, this study intends to investigate the extent of POS use and the level of service delivery in rural areas in Nigeria.
1.2 Statement of the Research Problem
In today’s fast changing world, banking environment has become highly competitive & banks are required to respond quickly to the dynamics of fast changing customers’ expectations to be able to survive and exceed in this changing market banks are striving to improve their customer service delivery and productivity through adoption of electronic banking (Tiwari & Kumar, 2012).
While there is volume of studies on electronic-banking products and services such as ATM, Mobile and Internet Banking and other electronic banking services, there has been dearth of literature on POS banking services, especially studies on its service quality impact on service delivery in the context of rural areas in Nigeria. Among the conducted studies on e-banking related topics, Sintayehu (2015) have studied ‘the impact of E-banking Services On customer satisfaction, Bethlehem (2018) has done her research on ‘E-banking Services and Performance of TOP performers’, Sabharwal, (2014) has assessed about the installation of POS (Point of Sale) terminals by Indian Banks and Adeoti (2013) examined about Challenges to the efficient use of Point of Sale (POS) terminals in Nigeria. However, none of these studies have addressed the effect of POS on service delivery among rural areas in Nigeria. The researcher believes that no research has been done in this specific topic. This study therefore seeks to fill this gap by examining the use of point of sales on service delivery in rural areas in Nigeria.
1.3 Objectives of the Study
The main purpose of this study is to examine the use of point of sales on service delivery in rural areas in Nigeria. The specific objectives are;
- To determine the usefulness of POS system on service delivery among users in rural areas in Nigeria.
- To examine the reliability of POS system on service delivery among users in rural areas in Nigeria.
- To examine the speed of POS system on service delivery in rural areas in Nigeria
1.4 Research Questions
Based on the statement of the problem and review of related literature, the study sought answers for the following questions.
- To what extent does the usefulness of POS system affect service delivery among users in rural areas in Nigeria?
- What is the reliability of POS system on service delivery among users in rural areas in Nigeria?
- How does the speed of point of sales system effect service delivery in rural areas in Nigeria?
1.5 Research Hypotheses
HO1: Usefulness of POS terminals has no significant effect on service delivery among users in rural areas in Nigeria?
HO2: Reliability of POS system has no significant effect on service delivery among users in rural areas in Nigeria
HO3: Speed of POS system has no significant effect on service delivery in rural areas in Nigeria?
1.6 Scope of Study
This study was confined to know the level of POS terminals on service delivery in rural areas in Nigeria. It is limited to customers who either used POS terminals or are aware about the service. Purposely, the participants of the study were selected from POS users in Bayelsa state.
1.7 Significance of the Study
The study will help money deposit banks to understand the level of satisfaction among POS users and the perception of potential users. Also to understand the impact of different variables on customer satisfaction from POS terminals and formulate appropriate strategies in improving POS terminal service for enhancing customer satisfaction and service delivery of banks in Nigeria.
This report will help software companies, which develop POS systems, or inventors, who are interested in POS businesses, to gain more insight into the perceptions towards a POS system. Therefore, concepts could be initiated to develop better products which would be suitable for the market, as well as a marketing campaign to encourage SMEs to adopt a POS system into their business. In addition to this, the study is expected to help other researchers who will be interested to conduct a study regarding the issue under investigation by providing useful information.
1.8 Organization of the Project Report
The study includes five chapters. Chapter one is the introduction chapter which includes background of the study, statement of the problem, research questions, objective of the study, significant of the study and scope of the study. The second chapter deals with conceptual review, empirical review and theoretical review. The third chapter deals with the methodology part of the study which includes the research design, population of the study, sample and sampling techniques, method of data collection, measurement of variables, method of data analysis and limitation of the study. The fourth chapter of the study deals with data collection, analysis and discussion of the findings. The fifth chapter deals with the summary, conclusion and recommendations.
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