Impact of Electronic Payment System on Cash Usage in the Nigerian Financial System
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Date
2015
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Faculty of Management Sciences, University of Ilorin
Abstract
Nigeria is a heavily cash oriented economy with retail and commercial payments primarily made in cash. It is expected that the electronic payment system adopted in the Nigerian banking industry will reduce the amount of physical cash used for transactions and the long queue witnessed in the banking halls. Despite the series of technological innovation of the e-settlement system, the CBN still posited in 2013 that cash usage is very high, as it represented over 99 percent of the total transactions as at December, 2012. This study therefore, examined the electronic payment system and cash usage in Ilorin metropolis of Kwara State, Nigeria. Primary data was obtained through the questionnaire for this study. Data obtained were subjected to dprobit, probit and logit regressions, using the Statistical Tool for Analyses (STATA 11.0). The outcome of this study revealed that: (i) Electronic Payment System has significant impact on cash usage; and (ii) factors influencing the adoption of e-payment facilities include its user¬friendliness, convenience, usefulness and its ease-of-use. The study therefore, recommends that the Central Bank of Nigeria should put in place an e-transact policy to encourage more users to adopt the e-platform. If the above recommendation is fully implemented, more users are likely to adopt the technology in carrying out their transactions, which will in-turn have positive effect on the Nigerianjinanciai system.
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Keywords
Electronic Payment System, Cash Usage, NIgerian Financial System