ABSTRACT
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 effect of epileptic power supply on 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. While the sample
size considered for this study was one hundred and forty five [145], represents
the number of those that properly filled-out and returns the questionnaire on
the spot out of the one hundred and fifty administered and the method of
drawing the sample convenience sampling technique. 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 that acceptance. It was
recommended based on the findings of the research 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
Pages
Title Page
i
Certification
ii
Dedication iii
Acknowledgement iv
Abstract v
Table of content vi
CHAPTER ONE
INTRODUCTION
1.1
Background
to the Study 1
1.2
Statement
of the Problem 3
1.3
Aim
and objectives of the Study 3
1.4
Relevant
Research Questions 4
1.5
Research
Hypotheses 5
1.6 Significance
of the Study 6
1.7 Scope
of the Study 6
1.8 Definition
of Terms 6
References 8
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Preamble 10
2.2 Theoretical
Framework of the study 10
2.3. Empirical
Framework of the study 14
References 26
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Preamble 31
3.2 Research Design 31
3.3 The Population of the study 31
3.4 The Sample, procedure and sample
size 31
3.5 Data Collection Instrument and
Validity 31
3.6 Method of Data Analysis 32
3.7 Limitation of Methodology 32
References 33
CHAPTER FOUR: DATA
ANALYSIS AND RESULT
4.1 Preamble 34
4.2 Presentation
and Analysis of Data 34
4.3 Test
of Hypotheses 39
4.4 Discussion
of Findings 41
CHAPTER FIVE: SUMMARY OF FINDINGS DISCUSSION, AND RECCOMMENDATION
5.1 Summary
of Findings 42
5.2 Conclusions
43
5.3 Recommendation 43
5.4 Suggestion for
further Studies 45
Bibliography 44
Appendix
49
.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
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. As reported by Ayo et al. (2007), virtually all
the 25 banks in Nigeria that survived the recapitalization exercise engaged the
use of ICT for efficient service delivery. 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).
Alao (2009) reported that though the most prominent
form of e-payment system in Nigeria is the Automated Teller Machine (ATM) card.
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).
According to 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 Brooks, 2011).
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).
Additionally, 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.