The Effect of Electronic Payment System on Customer Satisfaction in Nigeria Banking System
Chapter One
Objectives of the study
The main objective of this research is to appraise the effect of electronic payment system on customer satisfaction in Nigeria banking system. Specifically, the study will examine the following objectives:-
- To evaluate the effects of electronic payment system on banks customers.
- To assess the impact of electronic payment system on the bank’s service delivery.
- To examine the effect of electronic payments on competitive advantage of the bank.
- To ascertain the effect of electronic payment system on increase in market size of the banks.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
INTRODUCTION
The Federal government of Nigeria through its agencies and the banking sector has taken significant strides in the last 15 years to modernise the payment system. The system has been unexploited, problematic and constrained by diverse challenges ranging from lack of adequate legal backing, credibility of the human element, integrity of data transmitted, to interconnectivity and interoperability (CBN 2010). The Nigeria payment system is predominantly cash based due to a culture informed largely by ignorance, illiteracy and lack of appreciation of other non-cash instruments (Ovia 2005). The development of Nigeria’s national payment system has thus witnessed some remarkable achievements in the last ten years, evolving from paper payment systems to electronic payment instruments. The pace of development is described as high in terms of achievements within its short life span and the challenges encountered. The technological infrastructure put in place by the private stakeholders such as the banks and switching companies for the EPS, is also seen as current and of high standard, comparable to some payment infrastructures in other developed countries. For instance, the use of chip and pin electronic cards, currently used in Europe and just taking off in America, started in Nigeria five years ago. The CBN guided by the economic policies of the government and in collaboration with the bankers committee has introduced several measures to modernise the payment system in Nigeria with mixed results. (Briggs & Brooks 2011) Computerization of the Nigerian Banking Industry is a kind of electronic banking, which involves an electronic form of money transmission. Electronic Banking Services are fully automated such that al transactions are concluded in a jiffy. It involves the use of computer network in dispensing cash and transfer of funds. But most customers however, still patronize bank branches in person and find interactions with human teller as very important. Customers enjoying electronic payment services are still not satisfied with the quality and efficiency of the services because of the huge logjam, breakdown and epileptic functioning of the machines. Some banks are lackadaisical about repairing these machines when they breakdown whereas there are a lot of experts around who can be called upon to repair and maintain them. Most customers are afraid they might be hooked up in a corner making them to loose their money. This is expressed in the number of times customers visits bank, their waiting time in banks, their queuing period also pose a lot of challenges to customers. Security of both bank staff and customers is also major source of concern as most of them are afraid the armed robbers may attack the bank. The world has witnessed an upsurge of electronic payment instruments meant to facilitate trade and simplify payments, before the introduction of electronic payment into Nigerian banking system; customers had to walk into the banking hall to do transactions of all kind. They had to queue up and spend more hours to talk to a teller to make their transactions. Inconveniences caused by these long queues discourage most customers who sometimes renege from the queues in annoyance. For many years, bankers, IT experts, entrepreneurs, and others have advocated for the replacement of physical cash and the introduction of more flexible, efficient and cost effective retail payment solutions (Siyanbola 2013 in Ahmadu Abubakar 2014). Success in the electronic banking era is measured in the eyes of the customers. A bank has to profitably meet the needs of customers and continuously improve its ability in doing so. It has to be effective, accurate, reliable, helpful and understanding thereby retaining existing customers’ and adding more customers. More so these days that banks saddle the responsibility of marketing to staff, it is not always easy to loose customers that are hard to win because of malfunctioning of machines and ill-satisfaction of customers. Agboola (2001) studied the impact of computer automation on the banking services and discovered that electronic banking has tremendously improved the services of some banks to their customers. He made a comparative analysis between the old and new generation banks and discovered variation in the rate of adoption of the automated devices. The 21st century has witnessed a dramatic evolution in the financial service industry as a result of the rapid advancement in technological transformation which has become known as e-developments. These changes have engulfed all areas of financial intermediation and financial markets such as e-finance, e-money, e-banking, e-brokering, e-exchange, esupervision etc. This new information technology (IT) is turning into the most important factor in the future development of banking, influencing bank’s marketing and business strategies. As a result of rapid advances in IT and intensive competition in the banking sector, the adoption of e-banking is being increasingly used as a channel of distribution for financial services (Mahdi & Mehrdad, 2010 cited in Ahmad Abubakar 2014) Ahmadu Abubakar (2014) studied the effects of Electronic Banking on Growth of Deposit Money banks in Nigeria using all the deposit money banks in the country spanning between 2006 -2012.
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought the effect of electronic payment system on customer satisfaction in the Nigeria banking system
Sources of data collection
Data were collected from two main sources namely:
(i)Primary source and
(ii)Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
DATA ANALYSIS
The data collected from the respondents were analyzed in tabular form with simple percentage for easy understanding.
A total of 133(one hundred and thirty three) questionnaires were distributed and 133 questionnaires were returned.
Question 1
Gender distribution of the respondents.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain the effect of electronic payment system on customer satisfaction in the banking system. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing challenges of electronic payment system on customer satisfaction in the banking system
Summary:
This study was on the effect of electronic payment system on customer satisfaction in the banking system. Four objectives were raised which included: To evaluate the effects of electronic payment system on banks customers, to assess the impact of electronic payment system on the bank’s service delivery, to examine the effect of electronic payments on competitive advantage of the bank, to ascertain the effect of electronic payment system on increase in market size of the banks. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of UBA, Onitsha.
REFERENCES
- Akwaja, C. (2010). “Nigeria Connects 99 million Subscribers”. Fin. Standard, 10: 15-512.
- Ayo, C. and Ukpere, W. (2010). African Journal of Business Management, 4(9): 1753-1760.
- Baddeley M. (2004). “Using e-Cash in the new Economy: An Economic Analysis of Micropayment Systems”. J. Electronic Res., 5(7): 239-253.
- Gbolahan Dada (2005). “Banking Sector Consolidation – Integration of IT applications is key”. Fin. Standard., 6: 11-24.
- Sanusi, S. (2012). “Banking Reform and its Impact on the Nigerian Economy”. CBN Journal of Applied Statistics 2(2): 115
- Surabhi, S. and Renu A. (2011). “A Comparative Study of Banking Services and Customer Satisfaction in Public, Private and Foreign Banks”. Journal of Economics, 2(1): 45-56.
- Chakrabarty, A. (2006). Barking up the wrong tree – factors influencing customer satisfaction in retail banking in the UK. International Journal of Applied Marketing, 1 (1). Retrieved from http://www.managementjournals.com/journals/marketing/article27.htm
- Croxford, H., Abramson, F., & Jablonowski, A. (2005). The art of better retail banking. England: John Wiley.
- Gupta, A., & Dev, S. (2012). Client satisfaction in Indian banks: an empirical study. Management Research Review, 35(7), 617-636.
- Habibi, S., Azari, A. D., Toloue, G., Ejlali, N., & Nejadjavad, M. (2013). Customer satisfaction and its impact on improvement of banking services. Interdisciplinary Journal of Contemporary Research in Business, 4(10), 998-1003.
- Hoq, M. Z., & Amin, M. (2010). The role of customer satisfaction to enhance customer loyalty. African Journal of Business Management, 4(12), 2385-2392.
- Hoyer, W. D. & MacInnis, D. J. (2001). Consumer Behaviors 2nd ed., Boston, Houghton Mifflin Company
