IMPACT OF ELECTRONIC PAYMENT SYSTEM IN THE NIGERIAN FINANCIAL INSTITUTION (A CASE STUDY OF FIRST BANK NIGERIA PLC)
ABSTRACT
This project work examines the impact of electronic payment system in Nigeria financial institutional system.
Sequel to the challenges encountered in our financial int6itutions towards meeting up with the responsibilities of the 21st century banking system to enhancing the growth of Nigeria economy sectors for developments in various operations of her economy.
The impacts of electronic payment in Nigeria financial institution are of various advantages and disadvantages. To enhance the operations of Nigeria banking systems, adequate security of fund is needed to be provide, instant accessibility to fund, quick transaction of fund, self transactions, and lots more.
Indeed, the disadvantages of electronic payment system in Nigeria financial institution system can as well be observed or noticed as, mail functioning of the electronic system, hacking of financial data’s and manipulations, to mention fear
This project work gives possible attenuations and recommendations on how electronic payment system in Nigeria financial system could be great advantages to the development and enhancing of operations in Nigeria financial systems
TABLE OF CONTENTS
Title Page
Certification……………………………………………………..ii
Dedication……………………………………………………….iii
Acknowledgment………………………………………………iv
Proposal……………………………………………………………v
Table of Contents……………………………………………….vii
CHAPTER ONE
1.0 Introduction…………………………………………………1
1.1 Background of Study………………………………………1
1.2 Objectives of the Study……………………………………2
1.3 Importance of the Study………………………………… 2
1.4 Definition of Terms…………………………………………4
CHAPTER TWO
2.0 Introduction………………………………………………….9
2.1 The View on Electronic Banking…………………………11
2.2 Electronic Banking and the Common Banking Products………… ….16
2.2.1 Telephone and Pc Banking Products………………….17
2.2.2 The Card System………………………………………….18
2.2.3 The Automated Teller Machine (ATM)………………..20
2.2.4 Cheque………………………………………………………21
2.3 The Entry of Nigeria Banks into Electronic Payment Banking System…………21
2.4 Operational and Financial Institution………………..24
CHAPTER THREE
3.0 Research Methodology……………………………………27
3.1 Methods of Collecting Data………………………………27
3.1.1 Primary Method of Collecting Data…………………….27
3.1.2 Primary Method of Collecting Data (Section B)……...27
3.2 Secondary Method of Collecting Data………………….28
3.3 Research Problem…………………………………………..28
CHAPTER FOUR
4.0 Findings, Data Presentation and Analysis……………30
4.1 Brief History of First Bank Nigeria Plc…………………30
4.2 Organizational Structure of First Bank Nigeria Plc…33
4.3 Impact of E-payment on Nigeria Financial System….34
4.3.1 Positive Impact……………………………………………….34
4.3.2 Negative Impact……………………………………………..36
4.3.3 Constraints of E-payment System………………………38
4.4 Data Presentation…………………………………………...41
CHAPTER FIVE
5.0 Summary, Conclusion and Recommendation…….....56
5.1 Summary……………………………………………………..56
5.2 Conclusion……………………………………………………56
5.3 Recommendations…………………………………………..57
Bibliography………………………………………………….61
CHAPTER ONE
1.0 BACKGROUND OF THE STUDY
1.1 INTRODUCTION
Payment systems are currently being developed around the world. As technology progressed, so too have payment systems. E-payment is the latest method of paying and exchanging value of payment.
The CBN recently has granted approval to a number of Banks to introduce International and money transfer products, telephone banking, on-line banking via the internet, though on a limited scale.
1.2 OBJECTIVES OF THE STUDY
This research work is to examine impact of electronic Banking in Nigeria banking system.
Specifically the study objectives are:
(1) to evaluate the prospects of electronic Banking in unity bank plc
(2) to evaluate the impact of electronic banking in unity bank plc
(3) to examine whether electronic banking has improve the fortune of the Bank
(4) to examine the effect of electronic banking has it improve the fortunes of the Bank
(5) to examine whether the bank electronic banking guideline comply with the CBN Electronic Banking guideline policy
1.3 DEFINITION OF TERMS
Some of the Keywords commonly used in the project work are defined as follows:
1. ICC - (International Chamber of Commerce), this is regulatory body for internal trade.
2. VISA CARD – Its function is to displace cash and cheque which can be used to buy excess. It is a name of electronic payment company.
3. SMART CARD – A method of electronic payment involving the use of plastic cards it is incorporated by inter-name Consulting Ltd, to reduce the stress of carrying cash from one point to another. It is also an electronic purse which holds the electronic equivalent of cash to know as “digital purse” which has a microprocessor embedded which can be loaded with a monetary value. The card value if reduced with each purchase while the power of smart cards lies in their ability to store and manipulated data, to handle multiple applications on one card and to perform secure transaction.
4. AUTOMATED TELLER MACHINE – An ATMs card allows a customer to withdraw cash from his or her bank account by entering a personal identification number (PIN) and having the amount of withdrawal immediately debited to the account. It gives customer easy access to his/her cash whenever he/she needs it (24 hours a day, 7 days a week.)
5. VALUE CARD AND PAY CARD – An electronic equivalent of cash (substitute for cash and coins) are loadable and could be accepted as means of payment for goods and services.
6. TELEPHONE BANKING – Enables customers to transact banking business through the telephone from anywhere there is access to telephone anytime of the day.
7. SWFIT – (society for world wide inter Bank Financial Telecommunication). It is cooperative organization dedicated to the promotion and development of standardized global interactivity of financial transactions.
8. SCAM – An elaborate fraud involving fake financial document, that is undertaken to unjustly enrich the operator.
9. IT (Information Technology) – It center around automation management task in offices and business organization, for the Central Bank of Nigeria (CBN) in the late 1996 granted an approval to a bank in the country to introduced a financial product following the IT innovation system (a closed system electronic purse) known as the Electronic Smart Card Account (ESCA).
10. E-CASH – Is anonymous digital money whose validity is checked online by the corresponding financial institution E-cash is develop by Digit-cash and is offered by Mark Twain Bank, St Louis since 1995. Deutshe bank Ag, Frankfurt (main) offers e-cash as a pilot project to its customer since October 1977. The customers withdraw digital money from his e-cash account using the so-called blinding method and store it on its hard disk.
11. MOBILE BANKING – It offers customer the freedom of banking with mobile phone. The facility keeps a customer in touch with his/her finances all the time and anywhere.
12. THE MILLICENT – The Millicent method is developed by Digital Equipment corporation (DEC) to manage small and smallest payment (e.g. payment for getting information from the internet about the news and stuck quotation or payment for small programmes like java-applets).
CHAPTER FIVE
5.0 SUMMARY AND CONCLUSION
5.1 SUMMARY
This study examines the impact of Electronic Payment System on the Nigeria Payment System in the Nigeria Financial System. It has been discovered that electronic payment system has greatly influenced the development of the financial system and has enable this sector (especially for banks) to provide for efficient customer’s banks of the advanced countries.
This system enables financial transaction to be processed quickly, more cheaply and also offer a much more convenient method of effecting settlement transactions.
5.2 RECOMMENDATIONS
As a result of the findings of this investigation and analysis, the research is recommending the followings:
(i) There should be information education in which there will be education of each cards and computer user on the dangers of the computer crime.
(ii) Computer fraud is common all over the world of which Nigeria is not exemption. This has a negative impact on the 21st century banking hence control and discipline must be started with so that “fraud syndicates” are reduced in the financial system.
(iii) Electronic payment system will have banks depend on the Power Holding Company of Nigeria or any alternatives are not reliable. Most of the electronic banking products depend wholly on efficient and interrupted power supply and communication network.
(iv) There is need for a legal framework to support the development of not e-money activities, but e-banking as a whole. The police will have to develop new detection, surveillance and investigation method in nabbing the perpetrators through more sophisticated developed means.
(v) The federal Government should embark upon operation of “educate all” in this country, so that literacy rate can be reduced upon.
(vi) The CBN is to ensure that price stability and the unit of account, function of money are not jeopardize. It might be important for the conduct of monetary policy; the CBN should examine the need for reserve requirement on unspent card balances to ensure that the objectives of that policy instrument are not compromised.
(vii) The financial institutions in Nigeria are to foster the development of those e-payment schemes whose features include anonymity of transactions.
(viii) Pertaining to security, electronic payment schemes must maintain adequate and re liable safeguards in order to prevent, detect and curtail possible threats to the security and integrity of the schemes including the threat of counterfeits as well as unauthorized access or modification.
(ix) The establishment of an efficient Central Swift network is a fundamental pre-requisite to developing e-payment system in the Nigeria financial market public and private sectors should be encouraged to collaborate in order to fast-forward the digital revolution in Nigeria. Finally, electronic payment system comes along with its demerits and merits, but if the necessary precautions and come could be taken, the demerit would drastically reduces the good inherent and the system will remain within the country.
5.3 CONCLUSION
From the foregoing, with the adoption of industry, there is the possibility that the Nigeria economy which is cashful (i.e. based on e-money product such as credit and etc) like that of the developed economics such as America, Britain, and Germany the benefit of e-payment system can only be realized if sufficient measures are put in place to ensure that the Nigeria public has confidence in the system.
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