An examination of POS terminal challenges on retail banking transactions: a case study of Heritage Bank
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Background of the Study
Point of Sale (POS) terminals are essential tools for facilitating retail banking transactions, enabling quick and secure payments for goods and services. Heritage Bank has invested in modernizing its POS infrastructure to support a high volume of transactions and improve customer convenience. Between 2023 and 2025, the bank has upgraded its POS terminals with digital payment technologies and enhanced security features to meet the increasing demand for contactless payments (Olatunde, 2023; Musa, 2024). However, despite these advancements, the bank continues to face challenges that hinder the optimal performance of its POS systems.
Common issues include hardware malfunctions, software glitches, and network connectivity problems that can result in transaction delays or errors. These challenges not only affect the speed and reliability of retail transactions but also have broader implications for customer satisfaction and operational efficiency (Chinwe, 2023). Frequent downtime or inconsistent performance of POS terminals can lead to customer frustration and may prompt merchants to seek alternative payment solutions. Heritage Bank’s efforts to resolve these issues include regular maintenance, system upgrades, and the integration of real-time monitoring tools. Nevertheless, ensuring uniform performance across diverse retail environments remains a critical concern.
The effectiveness of POS terminals is directly linked to the bank’s ability to maintain customer trust and compete in a rapidly evolving digital payments landscape. As retail banking becomes more integrated with digital technologies, the reliability of POS systems becomes a key factor in sustaining the bank’s market position (Ibrahim, 2025). This study seeks to examine the challenges faced by Heritage Bank in managing its POS terminals and evaluate the impact of these challenges on retail transaction efficiency. Through a combination of quantitative data on transaction times and error rates, as well as qualitative insights from merchants and bank staff, the research will provide recommendations for addressing these challenges and improving overall service delivery.
Statement of the Problem :
Despite significant investments in upgrading its POS infrastructure, Heritage Bank continues to encounter operational challenges that affect retail transaction processing. Frequent hardware malfunctions, software errors, and intermittent network connectivity issues have led to increased transaction times and errors, ultimately undermining customer satisfaction (Olatunde, 2023). These technical difficulties result in revenue losses for both the bank and its retail partners, while also damaging the bank’s reputation for reliable service delivery. Inconsistent performance of POS terminals across different retail outlets further complicates the issue, as some merchants experience prolonged downtimes while others function adequately.
Moreover, the rapid pace of technological change and the increasing demand for seamless, contactless payment experiences place additional pressure on the bank to continuously update its systems. However, the integration of new technologies with existing legacy systems remains a challenge, leading to compatibility issues and inefficient troubleshooting processes. This persistent problem not only affects day-to-day operations but also hinders the bank’s ability to compete with fintech companies offering more advanced digital payment solutions.
This study aims to investigate the specific challenges affecting POS terminal performance at Heritage Bank and assess their impact on retail transaction efficiency. By analyzing performance metrics and gathering feedback from end-users, the research intends to identify key areas for improvement. The ultimate objective is to propose targeted interventions that will enhance system reliability, reduce transaction errors, and improve customer satisfaction (Musa, 2024).
Objectives of the Study:
To assess the challenges affecting POS terminal performance at Heritage Bank.
To evaluate the impact of these challenges on retail transaction efficiency.
To recommend strategies for improving POS system reliability and customer satisfaction.
Research Questions:
What are the primary technical challenges affecting Heritage Bank’s POS terminals?
How do these challenges impact retail transaction processing and customer experience?
What measures can enhance the reliability and efficiency of POS systems?
Research Hypotheses:
H1: Technical challenges in POS terminals significantly increase transaction error rates.
H2: Improved system integration reduces downtime and enhances transaction speed.
H3: Regular maintenance and updates improve overall POS terminal performance.
Scope and Limitations of the Study:
This study focuses on Heritage Bank’s POS terminals between 2023 and 2025, using data from multiple retail outlets. Limitations include regional variations in infrastructure and potential reporting biases from merchants.
Definitions of Terms:
POS Terminals: Devices used to process retail transactions electronically.
Retail Transaction Efficiency: The speed and accuracy of processing payments in retail settings.
Digital Payment Technologies: Electronic systems that facilitate secure and contactless payments.
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