A SURVEY INTO THE ACCEPTANCE AND ADOPTION OF THE CBN CASHLESS POLICY IN NIGERIA

A SURVEY INTO THE ACCEPTANCE AND ADOPTION OF THE CBN CASHLESS POLICY IN NIGERIA

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BACKGROUND TO THE STUDY

According to Ajayi et al. (2006), supporting a secure, convenient, and inexpensive payment system is one of the criteria for the growth of the national economy. Today's world is shifting away from paper payment systems and toward electronic ones, particularly credit cards (Humphrey, 2004). In most nations, for example, one may pay for a snack from a vending machine by calling a number from one's phone bill. Cash is the predominant means of payment in Nigeria, as it is in other poor countries, and a considerable percentage of the population is unbanked (Ajayi et al., 2006), making the Nigerian economy primarily cash-based.

The Central Bank of Nigeria (CBN, 2011) has announced that the direct cost of cash management in 2012 is expected to reach a stunning number of one hundred and ninety-two billion naira (N192bn). Other issues associated with heavy cash usage include, among other things, armed robberies and cash-related crime, income leakage as a result of excessive cash handling, inefficient treasury management owing to the nature of cash processing, expensive subsidies, high inflation, and so on (Akpan, 2009). In light of these circumstances, the CBN implemented the cashless policy in April 2011, with the goal of encouraging the use of electronic payment methods rather than cash. This undoubtedly prompted the CBN to launch a cashless policy trial plan in Lagos on January 1st, 2012. So far, the policy's implementation in Lagos has not elicited the anticipated response. As a result, a nationwide deployment has been replaced with phased adoption in Port Harcourt, Kano, Abia, and the Federal Capital Territory (CBN, 2012).

A cashless economy is one in which most purchases and transactions are done electronically rather than with cash. Individual and corporate clients are limited to a daily cash withdrawal and lodgment of N500000 and N3m, respectively, under the policy, which was implemented by the CBN in April 2011. Individuals who make cash withdrawals in excess of the limit would be fined N100 every N1000, whilst corporate organizations that exceed the limit will be charged N200 per N1000 (Ezio, 2008).

According to the CBN and the Bankers Committee, the policy will benefit the economy. For example, it will decrease the dominance of cash in the economy, resulting in fewer incidents of armed robbery and currency-related crimes. It will minimize the cost of cash management, stimulate the adoption of electronic payment methods, and lower lending rates, making credit more accessible to both large and small businesses. According to the committee's conclusions, running a cashless economy might save the CBN roughly N192 billion, which is the expected direct cost of maintaining currency in 2012. While Nigerians cannot deny the need of preventing excessive cash in circulation, among other advantages of the plan, many still argue that the cash limit is too low and question how the CBN arrived at the benchmark. Some argue that a gradual transition to the new policy order is necessary, while others argue that Nigeria is not even ready for it. As admirable as the cashless concept is, an examination of the typical anomalies in ATM functioning has many stakeholders asking if the same mechanism could deliver a better outcome. Recognizing this possible danger, the CBN recently urged banks and independent service providers to deploy additional ATMs and enhance their efficiency in order for the policy to be implemented smoothly. According to Siyanbola (2013), the world's most notable cashless banking channels include mobile banking, internet banking, telephone banking, electronic card implantation, POS terminals, and ATMs.

The term mobile refers to mobile business, which refers to the ability to access business operations anywhere and at any time in the globe via a computer-mediated network. The location of service availability is made feasible by the facility. Mobile

Banking entails using a mobile phone to conduct financial transactions. This is essentially a financial transfer process between consumers, with monies available to the beneficiary immediately. According to Siyanbola (2013), it employs card infrastructure for the transfer of payment instructions, as well as protected SMS messaging for the beneficiary's receipt confirmation. Given the cheap infrastructure needs and the country's fast expanding mobile phone coverage, it is immensely popular and interesting to customers. Mobile financial services are finance-related services that use mobile communications technology in the banking business. As a result, these services are classified as mobile payment and mobile banking (Alex, 2010). This product provides services such as account inquiry, cash transfer, phone recharge, password change, and bill payment (Tiwari & Buse, 2007).

Internet banking is doing banking transactions through the internet (www) using electronic means such as a computer, rather than visiting a banking hall. Internet or electronic banking is a system in which transactions are settled electronically using electronic devices such as ATMs, POS terminals, GSM phones, V-cards, and so on, and are handled by e-holders, bank clients, and other stakeholders (Edet, 2008). These banking system advances have undoubtedly aided e-commerce, particularly in terms of payment processing. Internet banking, like mobile banking, makes use of the electronic card infrastructure to execute payment instructions and ultimate settlement of products and services between merchants and customers through the internet. In Nigeria, the most common online banking transactions are the payment of commercial invoices and the purchase of airline tickets through the websites of merchants or service providers.

An electronic card, on the other hand, is a tangible plastic card that uniquely identifies the bearer and is used in internet, automated teller machine (ATM), and point of sale (POS) terminal transactions (Carow and Staten, 2000). This comprises debit and credit cards, with debit cards linked to local bank accounts and providing quick payment confirmation, and credit cards used for evaluating local and worldwide networks. Due to the widespread acceptance of credit cards in most countries, the underlying infrastructures and operating regulations are frequently provided by global trust schemes (such as Visa and Master Card) in addition to local lines.

Debit cards, often known as ATM cards, are the most commonly used cards in Nigeria, and their use is more widespread than POS transactions due to the current limited deployment of POS terminals.

A point of sale (POS) or point of purchase (POP) terminal is where a transaction takes place. A point of sale (POS) or point of purchase (POP) is the hardware and software used to check out, similar to an electronic cash register. As an accessible interface, a POS oversees the selling process by a salesperson while also facilitating the generation and printing of receipts.

A teller machine is a computerized device that allows clients of a financial institution to conduct financial transactions in a public location without the aid of a bank teller or any other bank representative (Migdadi, 2008). It is the most widespread type of electronic banking, and it has grown in popularity with Nigerians, especially illiterate bank customers.

Regardless of the benefits stated by a cashless economy from the preceding, these alternative payment channels confront huge hurdles. According to Wales (2013), a challenge is a broad phrase that refers to everything that involves both struggle and victory. Thus, there are several challenges related with the implementation of the cashless economic policy among the Nigerian public, particularly among illiterate family members, those living mostly in rural regions, and the jobless.

The Port Harcourt community is among the top class of Nigerian society, and their positions obligate them to accept the cashless policy, despite the presence of commercial banks at their disposal. To that end, the research will assess the acceptance and implementation of the cashless policy in Port Harcourt.

STATEMENT OF THE PROBLEM

According to the 2011 Global FINDEX Survey, almost one-third of Brazilians and South Africans with debit cards utilize e-payments, compared to one in ten Nigerians: the 2% of Nigerian adults who now make e-payments constitute a small percentage of the 19% who have 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) show that Nigerians have been slow to accept and adopt electronic payments and services, with only 0.7 percent of banked adults using POS terminals, 0.8 percent using the internet, and less than 2.5 percent using mobile phones for banking transactions. Many issues have since influenced the policy, including insufficient sensitization campaigns, inadequate protection of the interests of merchants and persons in the informal sector, a lack of Point-of-Sale (POS) terminals, and other technological problems. As a result, these issues have had a significant impact on policy implementation. It is also believed that the move is overly utopian in a nation like Nigeria, where a major part of the population has low functional reading skills and lives in rural regions, forcing people to travel considerable distances to get these services. As a result, it is necessary to investigate the extent of acceptance and implementation 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 Port Harcourt metropolis. The specific objectives are as follow.

1.    To determine the level of acceptability and adoption of the CBNs cashless policy in Port Harcourt.

2.    To find out the advantages, benefits and implications of accepting and adoption of the CBN’s cashless policy in Port Harcourt

3.    To Determine the challenges facing the use of internet and mobile banking services/POS and the disadvantages of CBN’s cashless policy in Port Harcourt

4.    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

1.    What is the level of acceptability and adoption of the CBNs cashless policy in Port Harcourt?

2.    What are the advantages, benefits and implications of accepting and adoption of CBN’s cashless policy in Port Harcourt?

3.    What are the challenges facing the use of internet and mobile banking services/POS and the disadvantages of CBN’s cashless policy in Port Harcourt?

4.    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 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 area in the city of Port Harcourt.
LIMITATIONS OF STUDY

Limitations experienced in the course of this study are basically centered on problems relating to:

1.    Difficulty in generating reasonable, adequate and reliable information from respondents- Respondents tend to provide information which they feel the researcher would be pleased to get, which may not be the right information.

2.    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).

3.    Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for 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

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