The Role of POS Business on the Growth of Nigeria Economy. A Survey of Analysis
Objective Of The Study
The major aim of this research epistle is to evaluate The role of POS Business on the growth of Nigeria Economy. A survey of analysis. In respect to the above, below are the specific objectives:
- To assess the impact of POS business on unemployment.
- To know if POS is being used by small business in Nigeria
- To learn if POS business decreased unemployment in Nigeria.
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 two sub-headings:
- Conceptual Framework
- Chapter Summary
The Evolution Of The Nigerian Payment System
The Nigerian payments system has evolved over the past few decades. The modern payments system started being completely paper-based with the use of banks notes, payment orders, and cheque. In 1996, the payments system was modified to include card-based e-payment products. This was followed by the introduction of pay card in 1997. By 1999, card based payment products assumed an open platform with authorization from the CBN for the floating of two card service companies by a consortium of over 20 banks. In 2003, the CBN, in collaboration with the Bankers Committee, launched the first major initiative to modernize the payment system, granting approval to a number of banks to introduce international money transfer products, telephone banking, and online banking via the internet on a limited scale. Today, virtually all banks have introduced electronic funds transfers (EFT), debit and credit cards, internet banking, mobile banking and deployed Automated Teller Machines (ATM). The Nigerian payments system has further evolved with the introduction of the Payments System Vision 2020, launched in 2007 to facilitate a wider range of electronic payment methods such as POS terminals, facilitated by a wider range of service providers. By 2007, the payment system had transitioned from being cash-heavy to a bulk payer status, which is a combination of cash, and some electronic instruments, mainly Automated Teller Machine (ATM). Post 2007, Nigeria continues to embark on measures to increase the use of electronic channels in its journey to a cash lite society with efficient payment systems. In 2011, the CBN launched a cash policy to modernize Nigeria’s payment system (in line with the country’s vision 2020), reduce the cost of banking, foster economic growth and improve the effectiveness of monetary policy. The cash policy is to reduce the rate at which cash is physically moved in the country. The cashless economy, as explained by NIBSS (2015) is aimed at reducing and not eliminating the stock of paper currency circulating within the economy. It does not refer to an outright absence of cash transactions in the economic setting but one in which the amount of cash-based transactions are kept to the barest minimum. Several electronic payment systems such as payment cards (smart card) and paper-based instrument that were introduced by the CBN gave rise to significant growth in the use of electronic payment systems. The CBN strategic plan on e-payment system is to ensure that a larger proportion of currency in circulation is captured within the banking system, thereby enhancing the efficacy of monetary policy operations and economic stabilisation measures. E-payment initiatives such as the establishment of switching companies that facilitate inter-connectivity, introduction of payment instruments such as Automated Teller Machine (ATM), web transaction, e-money products such as credit and debit cards and Point of Sale (POS) have drastically helped reduce the volume of cash transactions and the flow of cash in the Nigeria economy. Electronic payment systems that have been introduced in Nigeria are Automated Teller Machine (ATM), web transaction, electronic money products (such as credit and debit cards), and POS. These e-payment systems provide a better audit trail than transactions which involve physical cash and thus reduce the amount of currency in circulation (Adeoti & Oshotimehin, 2012). POS is one of the e-payment systems introduced in Nigeria to further the course of cashless policy. POS is an electronic payment device which enables individuals to make purchases with electronic cards. POS accepts ATM cards for payment of goods and services. This card stores account information on microchips. The microchip contains a purse in which monetary value is held electronically. The card can be used to make purchase of goods and services online, in supermarkets, shopping malls, and other market places. POS allows cardholders to have a real time online access to funds and information in their bank account through debit or cash cards. POS deployment is projected to hit 350,000 in 2014 from 120,191 in 2013, reflecting growing acceptance of POS and electronic card payments. This is because between 2012 and 2014, it was found that the volume of transactions conducted via POS increased by 183% compound annual growth rate (CAGR) suggesting significant adoption and usage of POS (NIBSS, 2015).
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. Users are issued with a card (the electronic purse). The electronic purse is topped up using revaluation terminals. There are different types of terminals: coin & note, credit card and payroll deduction terminals.
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
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.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitute of individuals or elements that are homogeneous in description.
This study was carried out to evaluate The role of POS Business on the growth of Nigeria Economy using POS businesses in Asaba. Hence, the population of this study comprises of selected POS businesses in Asaba Delta.
DATA PRESENTATION AND ANALYSIS
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 sixty five (65) questionnaires were administered to respondents of which fifty (50) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 50 was validated for the analysis.
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS:
This chapter summarizes the findings on the evaluation of The role of POS Business on the growth of Nigeria Economy using Asaba, 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 on evaluation of The role of POS Business on the growth of Nigeria Economy using Asaba, Delta State as case study. The study is was specifically focused on assessing the impact of POS business on unemployment, determining if POS is being used by small business in Nigeria, and ascertaining if POS business decreased unemployment in Nigeria.
The study adopted the survey research design and randomly enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent are staff and owner of POS business inn Asaba Delta State.
The time at which banking business required only the physical presence of the customers or their agents in the bank premises has gone to the era where banking activities can also be carried out from anywhere in the society with the aid of electronic devices. The implication is not that Nigerian banking system has gone to the era where there is an outright absence of cash transactions in the banking sectors or to rapidly increase the rate of unemployment but the one in which the amount of cash-based and in-bank cash transactions are kept to the barest minimum. This innovation has in-turn generated humongous employment opportunities to a good number of Nigerians. As many individuals has secured a self-employment space for themselves through the use of POS devices and even to the extent of having employees who work at different branches. Since the POS was introduced in the financial sector, the Point of Sale terminal has evolved from being an electronic device, used during transactions to process card payments, to a source of livelihood for many Nigerians. Thus, the report from the findings analyzed shows that;
- POS businesses has affected employment in Nigeria.
- Small businesses in Nigeria do make use of POS machine.
- POS business has decreased unemployment in Nigeria as well.
Based on the findings the researcher recommends that the Nigerian Government should empower a good number of unemployed citizens of the nation through the establishment of POS businesses. In addition to this, the Government should ensure adequate availability of power and stability of mobile network in the society. This will go a long way in promoting the profitability and effectiveness of POS businesses. Lastly in other to curtail the vexatious rate of unemployment in the country the government should utilize the numerous recommendations outlined in chapter two of this study.
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