CHAPTER ONE
1.1 Background To The Study
The Cashless application policy implies
an economy in which transactions can be conducted without the use of
physical cash in the exchange, purchase and sale of goods and services
through the use of debit card, credit card to facilitate such
transactions. .This is a policy initiative of the central bank of
Nigeria aimed to further improve the financial sector of the economy.
However it is expected that the implementation shall receive
commendation from the end users (Ejiro, 2012). The CBN regulations
regarding the cashless policy provides a daily cumulative limit of
N150, 000 and N1, 000,000 on free cash withdrawals and lodgments by
corporate and individual customers respectively in the Lagos State
beginning from March 30, 2012. Consequently the regulations stipulate a
service charge for any cash transaction above the CBN provides cashless
policy guideline involving Individuals and corporate organizations.
Also cheques drafted for a 3rd party above N150, 000 shall be received
through the clearing house and not be eligible for encashment over the
counter with effect from January 1, 2012. This therefore required that
All Nigerian banks cease cash in transit lodgment services rendered to
merchant-customers from January 1, 2012. The cashless application
policy also provided for easy transfer of funds through the use of
information technology thereby reducing waste of time in the bank. The
implementation of cashless policy began in Lagos State, Nigeria. This is
because of the high volume of business and financial transaction in
Lagos state according to Central Bank of Nigeria (CBN, 2011) . It is
believed that its full implementation shall cut down the cost of
maintaining cash based economy. The research seek to proffer an
investigation on improving security in cashless application.
1.2 Statement of the Problem
The CBN cash policy implementation
implies a reduction in physical cash transaction and more dependence on
technologies provided for the purpose. But the nature of the Nigerian
economy poses a great challenge as to the security of financial
transaction conducted over the ATM and the use of other technologies and
facility provided for the cashless policy implementations. Many cases
of fund loss have been recorded concerning ATM transactions and the use
of other technologies. Also the poor level of illiteracy,commnunication
network and internet facility poses further challenge to the effective
and safe implementation of the cashless policy. The use of credit cards
and debit cards often do not meet customer cash needs and the security
situation around the facility had in recent times brought under security
challenge. Consequently the
Problem confronting the research is to proffer an appraisal on improving security in casheless application
1.3 Objectives of the Study
To proffer an appraisal on improving security in casheless application
1.4 Research Questions
What is casheless application?
What is the requirement for improving security in casheless application?
1.5 Significance of the Study
The study shall proffer appraisal on the requirement for improving security in casheless application
1.6 Research Hypothesis
Ho The security challenges in cashless application is low
Hi The security challenges in cashless application is high
1.7 Scope of the Study
The study focuses on the appraisal on improving security in casheless application
1.8 Limitations of the Study
The study was confronted by some constraints including logistics and geographical factor.
1.9 Definition of Terms
Access Products- Products that allow consumers to access traditional
payment instrument electronically, generally from remote locations
ATM Card- An ATM card (also known as a bank card, client card, key
card, or cash card) is a payment card provided by a financial
institution to its customers which enables the customer to use an
automated teller machine (ATM) for transactions such as: deposits, cash
withdrawals, obtaining account information, and other types of banking
transactions, often through interbank networks.
CBN - Central Bank of Nigeria.
Chip Card- Also known as an integrated circuit (IC) Card. A card
containing one or more computers chips or integrated circuits for
identification, data storage or special purpose processing used to
validate personal identification numbers, authorize purchases, verify
account balances and store personal records.
Electronic Data Interchange (EDI)- The transfer of information between organizations in machine readable form.
Electronic Money- Monetary value measured in currency units stored in
electronic form on an electronic device in the consumer’s possession.
This electronic value can be purchased and held on the device until
reduced through purchase or transfer.
Internet Banking- This is a product that enables the Bank leverage on
the Internet Banking System Module in-built on the new Banking
Application (BANKS) implemented by the Bank to serve the Internet
Banking needs of the Bank’s customers.
Mobile Banking - This is a product that offers Customers of a Bank to
access services as you go. Customer can make their transactions
anywhere such as account balance, transaction enquiries, stop checks,
and other customer’s service instructions, Balance Inquiry, Account
Verification, Bill Payment, Electronic fund transfer, Account Balances,
updates and history, Customer service via mobile, Transfer between
accounts etc.
Payment System- A financial system that establishes that means for
transferring money between suppliers and of fund, usually by exchanging
debits or Credits between financial institutions.
Point Of Sale (POS) Machine - A Point-of-Sale machine facilitates
customer payment, withdrawals , fund transfer needs and the provision of
credit/debit Balance Inquiry, Airtime Vending, Loyalty Redemption,
Printing mini statement etc.
Smart Card- A Card which is embedded with a computer chip, on which
financial health, educational, and security information can be stored
and processed.
Transaction Alert – The transaction alert is to provide for the
tracking of customer debit and credit transactions on their accounts.
The alert system also informs the customer other financial transaction
of the bank involving the customer.
Western Union Money Transfer (WUMT) – This is a facility which
enables the transfer of money from foreign countries into the country.
This is a facility used by business men, families and relatives for the
transfer of money to their counterparts.