Impact of Electronic Payment System on the Economy Development of Nigeria (a Study of Eco Bank Plc)
Chapter One
OBJECTIVES OF THE STUDY
The main objective of this study is to examine the impact of electronic payment system on the economy development of Nigeria. The specific objectives include the following:
- To assess the effectiveness of the implementation of e-payment system in Nigeria
- To identify the constraints in the implementation of the system
- To proffer solutions to the identified constraints in the implementation of the system.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
INTRODUCTION
This chapter presents the review of related literature on the impact of electronic payment system on the economy development of Nigeria. The views and opinions of other authors will be presented as follows.
THEORETICAL FRAMEWORK
Electronic payment (E-payment) is a subset of an e-commerce transaction to include electronic payment for buying and selling goods or services offered through the Internet. There are many forms of e-payment ranging from cards, Internet, mobile payment, financial service kiosks, biometric payments, electronic payments networks etc and as technology develops, the range of devices and processes to transact electronically continues to increases while the percentage of cash and cheque transactions continue to decrease.
In the Nigerian context, e-payment is effecting payments from one end to another end through the medium of the computer without manual intervention beyond inputting the payment data, it is the ability to pay the suppliers, vendors and staff salaries electronically at the touch of a computer button.
The Federal Government of Nigeria through its treasury circular ref. No TRY/A8 & B8 of 22nd October, 2008 directed that payments from all funds of the Federal Government of Nigeria be made electronically as from 1st January, 2009 in order to eliminate the un-acceptable delay in the payment of government contractors who have been certified to have either partly or totally completed contracts awarded to them and are due for payment; minimize interaction between contractors and government officials who have roles to play in the payment of contractors; check corruption because transaction of government can easily be traced from one source to another, introduce and institutionalize financial probity in the activities of government.
E-COMMERCE AND ELECTRONIC PAYMENT SYSTEMS
The most popular definition of E-Commerce is based on the online perspective of the conducted business. E-commerce provides the capability of buying and selling products, information and services on the Internet and other online environments. As for any trading activity, the issue of safe and reliable money exchange between transacting parties is essential. In an e-commerce environment, payments take the form of money exchange in an electronic form, and are therefore called Electronic Payment (Abrazhevich & Markopoulos, 2009). The merchant sell the goods to customer and customer pay the price with the help of E-Payment system .In offline world the payment are made with cash or through cheque. In online sales accepting payment is a curial aspect of the transaction (Kaur, 2012). The spread of e-payment usage vary unevenly between countries partly due to differences in factors such as quality of regulatory framework and readiness of telecommunication infrastructure. New payment services based on the Internet and mobile phones proliferate in the advanced economies (Izhar, Khan & Sikandar, 2011).
E-Payment system is secure .There should be no threat to the user credit card number, smart card or other personal detail, payment can be carried out without involvement of third party, It makes E payment at any time through the internet directly to the transfer settlement and form E-business environment (Hossein, 2002).
TYPES OF E-PAYMENT SYSTEM
- Credit Cards:A Credit card is a piece of plastic, 3-1/8inches by 2-1/8 inches in size, that carries information that allow you to make purchase now pay for them later (Kaur, 2012). Credit cards from visa maser card or any other network allow you to pay for purchase or services by borrowing from the credit card company. To purchase goods from merchant who accept credit card such as merchant has credit card reader to purchase the payment transaction to withdraw cash from ATM. You then repay by making monthly payment toward the amount borrowed ,that is you don’t have to repay the whole borrowed amount in fill at one go (Joseph 2008; Kumaga, 2010).
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
This chapter is concerned with the presentation of method used in this study to accomplish its purpose on “Impact of Electronic Payment System on the Economic Development of Nigeria”. The following areas were taken into consideration, research design, area of the study, population of the study, sample size and sampling techniques, research instrument, validation of research instrument, reliability of research instrument, administration of the instrument and method of data analysis.
RESEARCH DESIGN
This study adopted survey research design. According to Ekott & Nseyen (2006), a survey research is one in which a group of people or items is studied by collecting and analyzing data from only a few people or items considered to be representative of the entire group. Thus, in this study, the researcher collected data from the staff and management of Eco Bank Plc.
AREA OF THE STUDY
The study is limited to Eco Bank of Nigeria Plc and to examine the Impact of Electronic Payment System on the Economic Development of Nigeria.
POPULATION OF THE STUDY
The population of this study comprises all the staff and management of Eco Bank of Nigeria Plc which was estimated was about 50 personnel. Emphasis was placed on staff knowledge and information concerning the subject of the study.
CHAPTER FOUR
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
INTRODUCTION
This chapter entails the presentation of data analysis and interpretation of data collected. The data collected was through the use of questionnaire while the analysis was based on research questions and research hypotheses stated earlier in chapter one of this study. Simple percentages and tables were used to analyze the research questions and Chi-square statistical tools were used for testing of research hypotheses.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
INTRODUCTION
This chapter presents the summary, conclusion and recommendations for further studies.
SUMMARY OF FINDINGS
This study was carried out to examine the impact of electronic payment system on the economy development of Nigeria. Chapter one is the introduction covering background of the study, statement of the problem, objectives of the study, research questions and research hypotheses as well as significance of the study etc. Chapter two is the review of related literature covering theoretical framework, e-commerce and electronic payment systems, types of e-payment system, etc.
Chapter three was research methodology which included research design, area of the study, population of the study, sample size and sampling techniques, research instrument, validation of research instrument, reliability of research instrument, administration of the instrument and method of data analysis. In chapter four, the data collected were presented, analyzed and interpreted while the summary, conclusion and recommendations were made in chapter five.
The study further revealed the following findings:
- a) The implementation of electronic payment system effectively enhances economic development of Nigeria.
- b) There are no constraints bedeviling the implementation of the system in Nigeria.
CONCLUSION
Technology has inarguably made our lives easier. It has cut across distance, space and even time. One of the technological innovations in banking, finance and commerce is the Electronic Payments. Electronic Payments (e-payments) refers to the technological breakthrough that enables us to perform financial transactions electronically, thus avoiding long lines and other hassles. Electronic payments provides greater freedom to individuals in paying their taxes, licenses, fees, fines and purchases at unconventional locations and at whichever time of the day, 365 days of the year. On the basis of present study, first remark is that despite the existence of variety of e-commerce payment systems, credit cards are the most dominant payment system. This is consequences of advantageous characteristics, most importantly the long established networks and very wide users’ base. Second, alternative e-commerce payment systems are some countries are debit cards. In fact, like many other studies, this study also reveals that the smart card based e-commerce payment system is best and it is expected that in the future smart cards will eventually replace the other electronic payment systems. Third, given the limited users bases, e-cash is not a feasible payment option. Thus, there are number of factors which affect the usage of e-commerce payment systems. Among all these user base is most important. Added to this, success of e-commerce payment systems also depends on consumer preferences, ease of use, cost, industry agreement, authorization, security, authentication, non-refutability, accessibility and reliability and anonymity and public policy.
RECOMMENDATIONS
Based on the findings of this study, the researcher made the following recommendations:
- Dual control for authorization of transactions should be used by Nigerian banks
- Call – back procedures to verify transactions should be adopted by the Nigerian government.
- Strong internal and data processing controls on all date file associated with information of contractors to ensure privacy and security.
- Seamless integration between Government e-payment system and accounting system.
- Standardized format for remittance information
- Enlightenment campaign on the role of e-payment in the economic development of Nigeria
- Government should institute regulatory framework and policies that will further deepen the e-payment system through appropriate regulation.
REFERENCES
- Ailya, Izhar; Aihab, khan; Malik, Sikandar; Hayat, Khiyal; Ajeeh, Javed and Shiraz, Baig (2011). Designing and implementation of Electronic Payment gateway for developing countries”, journal of Theoretical and applied information technology, vol, 26 No. 230.
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- Avison, D.E. and Fitzgerald, G. (2003). Information Systems Development Methodologies, Techniques and Tools. 3rd Ed. London: McGraw-Hill.
- Boonstra, A. and de Vries, J. (2005) Analyzing Inter-Organizational Systems from a Power and Interest Perspective, International Journal of Information Management, 25, 485- 501.
- Elliot, S. and Avison, D.E. (2005). Discipline of Information Systems, in: Avison, D.E. and Pries-Heje, J. (Eds), Research in Information Systems: A Handbook for Research Supervisors and their Students. Butterworth Heinemann, 185-206.
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