A STUDY INTO THE ACCEPTANCE AND ADOPTION OF THE CBN CASHLESS POLICY IN PORT HARCOURT, NIGERIA


A STUDY INTO THE ACCEPTANCE AND ADOPTION OF THE CBN CASHLESS POLICY IN PORT HARCOURT, NIGERIA 

CHAPTER ONE INTRODUCTION

BACKGROUND TO THE STUDY

One of the prerequisites for the development of the national economy according to Ajayi et al, 2006 is by encouraging a payment system that is secured, convenient, and affordable. The world today is moving away from paper payment systems to electronic means, especially payment cards (Humphrey, 2004). In most countries, for instance, it is possible to pay for a snack through the vending machine by simply dialing a number on one’s phone bill. In Nigeria, like most developing countries, cash is the main mode of payment and a large percentage of the populations are unbanked (Ajayi et al., 2006) thus making the Nigerian economy to be heavily cash-based. Recently, the Central Bank of Nigeria (CBN, 2011) revealed that the direct cost of cash management is estimated to reach a staggering sum of one hundred and ninety-two billion naira (N192bn) in 2012. Other challenges resulting from high-cash usage among others include armed robberies and cash-related crime, revenue leakage arising from too much cash handling, inefficient treasury management due to the nature of cash processing, high subsidy, high inflation, etc (Akpan, 2009). Against these backdrops, the CBN introduced the cashless policy in April 2011 with the objective of promoting the use of electronic payment channels instead of cash. This no doubt led the CBN into conducting a pilot scheme of the cashless policy in Lagos on January 1st, 2012. So far, the implementation of the policy in Lagos has not gained an expected reaction. Hence a rollout across the country has been substituted with phase implementation in Port Harcourt, Kano, Abia, and the Federal Capital Territory (CBN, 2012). A cashless economy is one where purchases and transactions are done mainly by electronic means and seldom by cash. The policy, introduced by the CBN in April 2011, states that individual and corporate customers are restricted to a daily cash withdrawal and lodgment of N500000 and N3m respectively. By implication, individuals, who make cash withdrawals above the limit will be charged N100 on every N1000 while a corporate organization that exceeds the limit will be charged N200 on every N1000 (Ezio, 2008).

According to the CBN and the Bankers Committee, the economy will be better off with the policy. For instance, it will reduce the dominance of cash in the system, thereby reducing cases of armed robbery and cash-related crimes. It will moderate the cost of cash management; encourage the use of electronic payment channels and reduce lending rates to further make credit accessible to big and small businesses. The committee’s findings showed that running a cashless economy could save the CBN about N192bn, which is the projected direct cost of managing cash for 2012. While Nigerians could not deny the need to prevent too much cash in circulation among other benefits of the scheme; many still believe that the cash limit is too low and query how the CBN arrived at the benchmark. Some also express the need for a gradual transition to the new policy order; while others think that Nigeria is not even ripe for it. As laudable as the cashless idea is, an assessment of the usual inconsistencies in the operation of the Automated Teller Machine (ATM) leaves many stakeholders wondering if the same system could produce a better result. Realizing this potential threat, the CBN recently directed banks and independent service providers to deploy more ATMs and ensure their efficiency to ensure a smooth implementation of the policy. The most outstanding cashless banking channels the world over according to Siyanbola (2013) is Mobile banking; Internet banking; Telephone banking; Electronic card implants; POS terminals, and ATMs. The word mobile is related to mobile business which connotes the possibilities of having access to business activities anywhere and anytime in the world and which is managed by a computer-mediated network. The facility makes service availability location possible. Mobile Banking involves the use of mobile phones in carrying out financial transactions. This is more or less a fund transfer process between customers with immediate availability of funds for the beneficiary. According to Siyanbola (2013), it uses card infrastructure for the movement of payment instructions as well as secured SMS messaging for confirmation of receipts to the beneficiary. It is very popular and exciting to the customers given the low infrastructure requirements and the rapidly increasing mobile phone penetration in the country. In the banking industry, services that are finance-related which involve mobile telecommunication technologies are known as Mobile financial services. These services are therefore categorized into mobile payment and mobile banking (Alex, 2010). Services covered by this product include account inquiry; funds transfer; recharge phones; changing passwords and bill payments (Tiwari & Buse, 2007). Internet banking involves conducting banking transactions on the internet (www) using electronic tools such as the computer without a customer having to visit the banking hall. Internet or electronic banking is also a system by which transactions are settled electronically with the use of electronic gadgets such as ATMs, POS terminals, GSM phones, V-cards, etc, handled by e-holders, bank customers, and other stakeholders (Edet, 2008). These innovations in the banking system no doubt have greatly facilitated e-commerce mostly in effecting payments. Internet banking, like mobile banking, also uses the electronic card infrastructure for executing payment instructions and final settlement of goods and services over the internet between the merchants and the customers. Commonly used internet banking transactions in Nigeria are settlement of commercial bills and purchase of air tickets through the websites of the merchants or service providers.

An electronic card on the other hand is a physical plastic card that uniquely identifies the holder used in transacting business on the internet, automated teller machine (ATM), and point of sales (POS) terminals (Carow and Staten, 2000). This includes debit and credit cards with debit cards linked to local bank accounts and offers immediate confirmation of payment while credit cards can be used for assessing local and international networks. As credit cards are widely accepted in most countries, the underlying infrastructures and operational rules are often provided by global trust schemes (such as visa and master cards) in addition to local lines. Debit cards are the dominant cards in Nigeria, otherwise known as ATM cards and their usage is wider than POS transactions given the current limited deployment of POS terminals. Point of Sale (POS) or Point of Purchase (POP) terminals is the location where a transaction occurs. A POS or POP is generally referred to as the hardware and software used to check out, the equivalent of an electronic cash register. A POS manages the selling process by a salesperson as an accessible interface while allowing the creation and printing of receipts.An automated Teller Machine is a computerized device that provides the customers of a financial institution with access to financial transactions in a public place without a need for assistance from a bank teller or any bank official (Migdadi, 2008). It is the commonest form of electronic banking that has gained popularity among Nigerians including illiterate bank customers. Notwithstanding the benefits posited by the cashless economy from the foregoing, these alternative payment channels are still faced with enormous challenges. According to Wales (2013), the challenge is a general term referring to things that are imbued with difficulty and victory. Thus, there are many difficulties associated with the actualization of the cashless economic policy among the Nigerian populace especially the illiterate family members; those living mostly in rural areas, and the unemployed as well. The Port Harcourt community is among the elite class of the Nigerian society who by virtue of their positions are bound to embrace the cashless policy, giving the presence of commercial banks available at their disposal. To this effect, the study would determine the acceptability and adoption of the cashless policy in Port Harcourt.

STATEMENT OF THE PROBLEM

          According to the Global INDEX Survey in 2011, around one-third of Brazilians and South Africans with debit cards use e-payments, compared with one in ten Nigerians: the 2% of Nigerian adults who currently make e-payments represent a small fraction of the 19% holding debit cards (which is used as a proxy for a type of account more likely to provide e-payment functionality). Similarly, data from EFInA’s Access to Financial Services in Nigeria 2012 survey (A2F, 2012) highlight Nigerians’ limited acceptance and adoption of electronic payments and services to date, with 0.7% of banked adults using POS terminals, 0.8% of banked adults using the internet, and less than 2.5% using mobile phones for banking transactions. The policy has since been affected by many factors namely ineffective sensitization campaign exercise; inadequate protection of the interest of merchants and people in the informal sector; nonavailability of Point-of-Sale (POS) terminals as well as other technological challenges. Thus, these challenges have seriously affected the implementation of the policy. It is therefore the belief that the move is too idealistic in a country like Nigeria where a larger percentage of their population has a low level of functional literacy skills and resides in rural areas were compelling them to travel long distances in order to use these services. It, therefore, becomes pertinent to examine the level of acceptability and adoption of the cashless economic policy in Nigeria.

OBJECTIVES OF THE STUDY

The broad object of the study is to determine the level of acceptability and adoption of the CBNs cashless policy in the Port Harcourt metropolis. The specific objectives are as follows.

To determine the level of acceptability and adoption of the CBNs cashless policy in Port Harcourt. To find out the advantages, benefits, and implications of accepting and adopting the CBN’s cashless policy in Port Harcourt To Determine the challenges facing the use of the internet and mobile banking services/POS and the disadvantages of CBN’s cashless policy in Port Harcourt To find out the factors that can improve the level of acceptability and adoption of the CBN’s cashless policy in Port Harcourt.

RESEARCH QUESTION

What is the level of acceptability and adoption of the CBNs cashless policy in Port Harcourt? What are the advantages, benefits, and implications of accepting and adopting CBN’s cashless policy in Port Harcourt? What are the challenges facing the use of the internet and mobile banking services/POS and the disadvantages of CBN’s cashless policy in Port Harcourt? What are the factors that can improve the level of acceptability and adoption of the CBN’s cashless policy in Port Harcourt?

HYPOTHESIS

The following hypotheses were formulated to guide the study and were tested at the level of significance of 0.05. Ho: The people of Port Harcourt has not significantly accepted and adopted the         CBNs cashless policy HA: The people of Port Harcourt has significantly accepted and adopted the      CBNs cashless policy

SIGNIFICANCE OF THE STUDY

          This study is targeted at determining the level of acceptability and adoption of the CBNs cashless policy in Port Harcourt considering the factors and challenges facing the use and the acceptability and adoption of the policy, therefore this study will educate the general public on the need for the acceptance and adoption of the cashless policy educating the general public of the advantages of the policy. Furthermore, this study will also educate stakeholders in the financial sector on ways to solve the problems limiting the acceptance and adoption of the CBNs cashless policy. Lastly, the outcome of this study will increase the volume of the literature in the area of acceptability and adoption of the CBNs cashless policy.

SCOPE AND LIMITATION OF THE STUDY

In ascertaining the level of acceptability and adoption of the CBNs cashless policy, this study will cover all the Local Government Areas in the city of Port Harcourt. LIMITATIONS OF STUDY Limitations experienced in the course of this study are basically centered on problems relating to:

Difficulty in generating reasonable, adequate, and reliable information from respondents- Respondents tend to provide information that they feel the researcher would be pleased to get, which may not be the right information. Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature, or information and in the process of data collection (internet, questionnaire, and interview). Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted to the research work.

DEFINITION OF TERMS

Payment- the action or process of paying someone or something or of being paid Economy- The state of a country or region in terms of the production and consumption of goods and services and the supply of money. Transactions- an instance of buying or selling something. Cash- money in coins or notes, as distinct from cheques, money orders, or credit. Internet- a global computer network providing a variety of information and communication facilities, consisting of interconnected networks using standardized communication protocols

.

A STUDY INTO THE ACCEPTANCE AND ADOPTION OF THE CBN CASHLESS POLICY IN PORT HARCOURT, NIGERIA



TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.ORG

Researchwap.org is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.org guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.org is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.org" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.