CHAPTER ONE
INTRODUCTION
The Nigerian Banking industry of the 21st century operates in a complex and competitive environment characterized by highly unpredictable economic climate and conditions. Information and Communication Technology (ICT) is at the centre of this global evolutionary change taking place in Electronic Banking System in Nigeria today. The application of ICT concepts, techniques, policies and implementation strategies is of fundamental importance to all Banks and a needed prerequisite for local and global competitiveness. The advancement in Technology is a major player in improved service provision in the banking industry. Automated Teller Machines (ATMs) is the simplest form of providing basic banking services. With online banking, individuals can check their account balances and make payments without having to go to the bank hall. This has created the much anticipated cash-less society where consumers no longer have to pay for all their purchases with hard cash. As most people now own smart phones, banks have also introduced mobile banking to cater for customers who are always on the move. Mobile banking allows individuals to check their account balances and make fund transfers using their mobile phones. This was popularized by First Atlantic Bank, Nigeria (now First Inland Bank) through its “Flash me cash” product Customers can also recharge their mobile phones via SMS. E-Banking has made banking transactions easier around the World and it is fast gaining acceptance in Nigeria. Cash-less delivery channels in the present day Nigerian bank includes; Automatic Teller Machine (ATM), Point of Sales (POS), Telephone Banking, Smart Cards, Internet Banking etc. Virtually all Banks in Nigeria have a web presence to enhance internet banking.
Cashless economy is an economy where transaction can be done without necessarily carrying physical cash as a means of exchange of transaction but rather with the use of credit or debit card payment for goods and services. The cashless economy policy initiative of the Central Bank of Nigeria (CBN) is a move to improve the financial terrain but in the long run sustainability of the policy will be a function of endorsement and compliance by end-users (Ejiro, 2012). The CBN cash policy stipulates a daily cumulative limit of N150, 000 and N1, 000,000 on free cash withdrawals and lodgments by individual and corporate customers respectively in the Lagos State with effect from March 30, 2012. Individuals and corporate organizations that make cash transactions above the limits will be charged a service fee for amounts above the cumulative limits. Furthermore, 3rd party cheques above N150, 000 shall not be eligible for encashment over the counter with effect from January 1, 2012. Value for such cheques shall be received through the clearing house. All Nigerian banks were expected to cease cash in transit lodgment services rendered to merchant-customers from January 1, 2012. The policy through the advanced use of information technology facilitates fund transfer, thereby reducing time wasted in Bank(s). Wizzit, a fast growing mobile banking company in South Africa has over three hundred thousand customers across South Africa. Likewise, M-PESA was introduced in Kenya as a small value electronic system that is accessible from ordinary mobile phones. It has experienced exceptional growth since its introduction by mobile phone operator (Safaricom) in Kenya in March, 2007 and has already been adopted by nine million customers, which is about 40% of Kenya’s adult population. Wizzit and other mobile financial services including MPESA in Kenya are helping low income Africans make financial transaction across long distance with their cellphones, thereby reducing their travel cost and eliminating the risks of carrying cash and also avoiding most banking charges (Akintaro, 2012). It is assumed that the proper implementation of mobile phones and other technologies can aid the implementation of cashless policy and hence, the growth of cashless economy in Nigeria.
The poor implementation of the cashless policy in Nigeria has been below the expectation of the Nigerian populace. The current cashless economy in Nigeria has had its fair share of challenges ranging from illiteracy and a host of other reasons. This has resulted to these cashless policy not fully implemented amidst fear from the public that it may not be effective. The poor level of ICT in Nigeria has also negatively affected the cashless policy currently underway.
The major aim of the study is to examine the impact of ICT in a cashless economy. Other objectives of the study include;
H0: ICT does not have a significant impact on cashless economy in Nigeria.
H1: ICT has a significant impact on cashless economy in Nigeria.
The study would be of immense benefit to the banking sector, policy makers and all related stakeholders as it would reveal the impact of ICT on cashless economy in Nigeria. The study would also be of immense importance to students, researchers and scholars’ who are interested in developing a further study on the subject matter.
This study is restricted to the assessment of the impact of ICT in a cashless economy in Nigeria using selected money deposit banks in Lagos state as the case study.
LIMITATION OF THE STUDY
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).
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.
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