Factors Affecting Adoption of POS by Business Organizations in Nigeria(a Case Study of Delta State)
CHAPTER ONE
OBJECTIVE OF STUDY
The primary of objective of this study is ;
- To examine the factors that drive adoption of POS by business organization in delta state.
- To investigate the relationship between customer trust and the adoption of POS of selected business organization in delta state.
CHAPTER TWO
LITERATURE REVIEW
INTRODUCTION
Our focus in this chapter is to critically examine relevant literature that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.
Precisely, the chapter will be considered in three sub-headings:
- Conceptual Framework
- Theoretical Framework
- Chapter Summary
CONCEPTUAL FRAMEWORK
Historical evolution of financial payments systems
Historically, societies, world over had used various means of exchange before the cash and cheque system. Over decades, payment systems have passed through a lot of transformation. For instance, before 700 BC when cowries were introduced in Asia Minor, barter remained the only medium of exchange. Trade was carried out by goods being exchanged for other goods before money came to be used. Trade by barter encountered some serious problems such as the problem of double coincidence of wants, absence of common standard of value, problem of storage, indivisibility of some goods,and impossibility of standard of differed payment (Taiwah, 1978). In view of all these problems, money was developed as a medium of exchange. However, with the introduction of coins and notes, the era of cash as payment system emerged. In A.D. 1000, first notes appeared in China. This was later followed by the use of cheque as written instructions to transfer precious metal coins from one holder to another. Thus, the period of barter was later succeeded by another system, which featured the use of multiplicity of coins and commodity money such as metal coins, cowries, brass, and copper bracelets (Nnanna and Ajayi, 2005). According to Ovia (2005), the notes and coins issued by the Central Bank of a country constitute the currency or cash for that country. Currency is made up of a country’s notes and coins. It is a means of payment that a debtor can legally compel his creditor to accept. In Nigeria and other West African countries, greater use is made of currency than cheques or other means of exchange. The opposite is the case in the advanced countries like Britain, USA, Germany, and France where the use of cheques accounts for about 90% in all business transactions (Ovia, 2005). It is usually argued that “money” is what money does. In this sense, other instruments of payment like cheques, postal orders, money orders, bills of exchange and postal stamps are money. These are, however not “true money” in Nigeria since they cannot be spent everywhere in their present forms. The motivation behind the excessive desire to hold money, that is, to keep one’s resources in liquid form instead of investing it by Nigerians is of interest to economists. This is because holding money involves loss of the interest it might otherwise have earned if it were invested. Another consequence of holding liquid money may be looked at from the security perspective. Among advanced reasons for this practice were ignorance, illiteracy, and lack of appreciation of the merits of digital payment instruments such as debit card which does not involve the use, touch, and transfer of liquid fund (Ovia, 2005). Social miscreants and fraudsters over the years have studied Nigerian financial system that is mainly cash-based and thus identified banks, financial institutions, companies, churches, mosques and rich individuals as targets. In view of the above, this study seeks to evaluate the challenges to the efficient use of point of sale terminals in Nigeria.
The Mechanics of the Cashless Policy in Nigeria
The cashless initiative is an alternative to cash transactions through electronic means using information and communications technology (ICT). Ndifon and Okpa [Ndifon E 2014] maintain that the future of all business, particularly those in the service industry lies in information technology. This technology as far as cashless policy is concerned is not only computer. Information technology for banks takes different forms; computerization of customers’ accounts and account information storage and retrieval; deposit and withdrawal through Automated Teller Machines (ATMs); and networking to facilitate access to accounts from any branch of the bank, bio-metrics, use of mobile phones to consummate transactions, internet, and websites. It also involves the use of credit cards, debit cards, mobile pay and many other forms of payment, but always only in digital ways, as paper currency does not come into play. Babalola [Babalola 2008] identified seven different electronic payment channels in Nigeria, Automated Teller Machines (ATM), points of sales terminals, mobile voice, web, inter-bank branch and kiosks. Ogbuji et al. [Ogbuji 2012] noted that ATM allows a bank customer to conduct his/her banking transactions from almost every other ATM machine in the world. In this type of economy, the amount of cash in one’s wallet is not relevant. One can pay for purchases by any one of the forms of transactions in cashless economy which includes the use of credit cards or bank transfer. Cashless economy is enhanced by e-finance, e-money, e-brokering and e-exchanges Moses-Ashike, [Moses 211]. Central Bank of Nigeria introduced Point of sale and gave the guidelines in 2011 with maximum service commission of 1.25% or a maximum of NGN2000 and limiting the role of connecting and maintaining POS devices only to licensed Payment Terminal Service Providers (PTSPs). These POS terminals serve like the Automatic Teller Machines (ATM) across commercial points in the country. At the completion of a transaction and the value ascertained, the amount is entered into a POS terminal into which the electronic card has been slotted. The cash equivalent of the amount will be automatically transferred from the payer’s account into the account of the payee’s account. In Nigeria today, private enterprise, religious bodies, educational institutions and other service providers such as hotels, transport firms etc. have embraced the POS option in their transactions.
CHAPTER THREE
RESEARCH METHODOLOGY
AREA OF STUDY
Delta State is an oil and agricultural producing state in Nigeria. It is situated in the region known as the South-South geo-political zone with a population of 4,112,445.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of one hundred and eight (108) questionnaires were administered to respondents of which one hundred (100) were returned and all were validated. For this study a total of 100 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS:
Introduction
This chapter summarizes the findings on the factors affecting adoption of POS terminals by business organizations in Nigeria using business organizations in Delta State as case study. The chapter consists of summary of the study, conclusions, and recommendations.
Summary of the Study
In this study, our focus was to assess factors affecting adoption of POS terminals by business organizations in Nigeria using business organizations in Delta State as case study. The study specifically was aimed at examining the factors that drive adoption of POS by business organization in delta state, and investigating the relationship between customer trust and the adoption of POS of selected business organization in delta state.
The study adopted the survey research design and randomly enrolled participants in the study. A total of 100 responses were validated from the enrolled participants where all respondent are staff of selected business organizations in Delta State.
Conclusions
The relevance of efficient payment systems is a subject of interest to all stakeholders. However, the Nigerian payment system that is cash-driven cannot and has not guaranteed the much needed efficient and effective transactions required for a sustainable economic development due to the diverse environmental challenges. Based on the findings of this study, the researcher made the following conclusion.
- The factor which drive the adoption of POS terminal by business organizations include the fact that POSfacilitates better purchasing / supplier order management, simplify invoicing, facilitate effective time management, facilitates quick payments services, improve payment security and simplifies of operations.
- There is a relationship between customer trust and the adoption of POS of selected business organization in delta state.
5.4 RECOMMENDATIONS
Based on the findings and conclusion the study recommend that;
- Regulatory agencies should carry out enlightenment programs that will inform both customers and businesses on the benefits of adopting electronic payment systems, especially POS terminals.This is expected to further encourage its adoptability and usage.
- Banks should intensify efforts to deploy more POS to organisations in the locations of study as well as other parts of the country to further promote the adoption of POS among organisations that are yet to adopt.
- As a critical factor for success, the necessary infrastructure, such as internet access, that would make the cash-less policy to work in Nigeria should be made available.
REFERENCE
- Achugamonu BU, Taiwo JN, Ikpefan OA, Olurinola IO, Emena OU. Agent banking and Financial Inclusion: The Nigerian experience, Proceedings of the 28th International Information Management Association Conference-Vision 2020: Innovation Management, Development Sustainability, and Competitive Economic Growth. 2016;4418-4430.
- Adams, D. A., Nelson, R. R., & Todd, P. A. (1992). Perceived usefulness, ease of use, and usage of information technology: A replication. MIS Quarterly, 16(2), 227-247.
- Adeoti, O. (2013). “Challenges to the efficient use of point of sale (POS) terminals in Nigeria”, African Journal of Business Management Vol. 7(28), pp. 2801-2806,
- Adeoti, O. and Oshotimehin, K. (2011). “Factors influencing consumers’ adoption of point of sale terminals in Nigeria”, Journal of Emerging Trends in Economics and Management Sciences (JETEMS) 2 (5): 388-392
- Adeoti, O. O. (2013). Challenges to the efficient use of point of sale (POS) terminals in Nigeria. African Journal of Business Management, 7(28), 2801-2806. doi: 10.5897/AJBM12.1129
- Adeoti, O. O., & Oshotimehin, K. O. (2011). Factors influencing adoption of point of sale terminals in Nigeria. Journal of Emerging Trends in Economics and Management Sciences (JETEMS) 2 (5), 388-392
- Adeoti, O. O., & Oshotimehin, K. O. (2012). Adoption of point of sale terminals in Nigeria: Assessment of consumers’ level of satisfaction. Research Journal of Finance and Accounting, 3(1), 1-5.
- Adeoti, O.O. (2013), ‘’Challenges to the efficient use of Point of Sale (POS) terminals in Nigeria’’ African Journal of Business Management, 7(3), 67-88.
- Agarwal, R., & Prasad, J. (1997). The role of innovation characteristics and perceived voluntariness in the acceptance of information technology. Decision Science, 28(3), 557–582. doi: 10.1111/j.1540-5915.1997.tb01322.x
- Agarwal, R., & Prasad, J. (1999). Are individual differences germane to the acceptance of new information technologies? Decision Sciences, 30(2), 361-391. doi: 10.1111/j.1540- 5915.1999.tb01614.x
