User Acceptability and Payment Problems in Nigeria
The world has witnessed an upsurge of electronic payment instruments meant to facilitate trade and simplify payments. (Abor, 2004) Before the introduction of electronic payment into the Nigerian banking system, all customers had to walk into the actual bank to do transaction of all kinds. Customers had to queue up and spend more hours to talk to a teller to make their transactions. (Abor, 2004) The inconveniences caused by these long queues can discourage someone to make payment.
For many years, bankers, technology specialists, entrepreneurs, and others have advocated for the replacement of physical cash and the introduction of more flexible, efficient and cost-effective retail payment solutions. Countless conferences and seminars have been held to discuss the concepts of cashless and “chequeless” society. (Bank for International Settlement, 1998)
Electronic retail payment has been designed to help individual customers and companies as well as the banks itself in eliminating or reducing some of the problems inherent in the settlement and payment process. (Federal Reserve Bank of New York, 1996) Customers can pay their bills without having to actually move to the bank’s premises. They may also have access to their account information and even transfer money to other accounts in the comfort of their homes.
Nigerian banks are making huge investments in technology to upgrade their infrastructure, in order to provide new electronic information-based services. Electronic services such as online retail banking are making it possible for individuals and small institutions to take advantage of new technologies at quite reasonable costs. (Abor, 2004)
In Nigeria, electronic retail payments are being continuously developed, to replace or reduce paper-based payments. Many new payment services have come into existence in recent years, most of which are based on technical innovations such as card, telephone and the Internet. (Abor, 2004) 1.2 Definitions of Electronic Payment Systems
Due to the nature of electronic payment systems, there have not been a widely or universal definition for it. But attempt to bring some few notable definitions given by some writers. These range from now-familiar automated teller machines (ATM) to Internet bill payments.
According to Humphrey et al (2001), electronic payment refers to cash and associated transactions implemented using electronic means. Typically, this involves the use of computer networks such as the Internet and digital stored value systems. The system allows bills to be paid directly from bank accounts, without being present at the bank, and without the need of writing and mailing cheques.
E-payment can be defined as ‘payment by direct credit, electronic transfer of credit card details, or some other electronic means, as opposed to payment by cheque and cash’. (Agimo, 2004) It was also defined as “a payer’s transfer of a monetary claim on a party acceptable to the beneficially” (European Central Bank, 2003). According to Kalakota & Whinston (1997:153), “electronic payment is a financial exchange that takes place online between the seller buyer and the seller. The content of this exchange is usually the form of digital financial instrument (such as encrypted credit card numbers, electronic checks, or digital cash) that is backed by a bank or an intermediary, or by a legal tender.”
For the purpose of this presentation, the term “electronic payment” refers to as convenient, safe, and secure methods for payment of bills and other transactions by electronic means such as card, telephone, the Internet, EFT, and etc. Electronic payment gives consumers an alternative to paying bills and debts by cash, cheque, money order, etc. Its main purpose is to reduce cash and cheque transactions.
According to Pariwat & Hataiseere (2004), for the achievement of effective and...