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Appraisal of the effect of electronic payment

system on customer satisfaction in Nigeria
banking system

CHAPTER ONE
INTRODUCTION
1

Descriptive Background of the Study

Todays business environment is extremely dynamic in

nature. It has experienced rapid changes as a result of

technological

improvements,

increased

awareness

and

demands for banks services. The Banking industry of the 21st

century operates in a complex and competitive environment
characterized

by

these

changing

conditions

and

highly

unpredictable

economic

climate,

thus,

information

and

communication technology (ICT) is at the centre of this global

change. Amedu (2005) asserts that banks over the time have
been using electronic and telecommunication networks for
delivering a wide range of value added products and services.
Therefore, information systems could not be ignored because
they play a critical role in current Banking system in Nigeria.
Electronic banking is known as e-banking, virtual banking
or an online Banking, it is a service that allows customers to
access their bank information, conduct financial transactions,
make deposits, withdrawals and pay bills through the internet
without having physical visit to their banks. It provides the
convenience of accessing banking facilities from the comfort of
their home/offices. (Awamleh & Fernandez, 2005).
The concept of electronic banking system began when the
first Automated Teller Machine were instated in the 1970s. An
ATM machines allowed deposits to be made from the remote
locations a convenience for customers who otherwise would
have had to withdraw cash personally from their bank. The
advantages offered by ATM Machines quickly split over to

encompass other areas of bank services, computerizing manual

system for greater efficiency and time savings. The concept
behind ATM machines gave rise to smart cards, intranets and
internet banking, electronic funds transfer {EFT}, NIBSS
(Nigerian interbank settlements system), POS {Point of Sales
Service.},

Access

mobile,

and

other

electronic

devices

(Ahasanul, 2010).
The growth in the application and acceptance of internetdriven technologies means that delivering an enhanced service
is more achievable than ever before, however it is also more
complex and fraught with potential costs and risk. The internet
introduces customers to a new perception of business time as
always available and demanding an urgent and rapid response.
The serves as a challenge for managers who must to reconcile
their business and their own personal perceptions of time with
the perceived reality of internet time, as the internet has
decisively shifted the balance of power to the customer.
Presently, banks in Nigeria are adding value to their
services for customers satisfaction. The customers have more
choices in choosing their banks because the new age IT

(Information Technology) is bringing about sweeping changes

in the banking industry, forcing them to reengineer many of
their basic processes and systems. Few of the technologydriven electronic banking services being offered are viz.
Automated teller machines ATM, Electronic Clearing Service
(ECS), electronic funds transfer (EFT), tele-banking, internet
banking etc. New technological capabilities are now being
effectively used to create value and to better manage customer
relationship in Nigeria banking system. (Raji, 2010).
1.2 Objectives of the study
The main objective of this research is to appraise the effect of
electronic payment system on customer satisfaction in Nigeria
banking system. Specifically, the study will examine the
following objectives:i

To evaluate the effects of electronic payment system on

banks customers.

ii To assess the impact of electronic payment system on the

banks service delivery.
iii. To

examine

the

effect

of

electronic

competitive advantage of the bank.

payments

on

iv. To ascertain the effect of electronic payment system on

increase in market size of the banks.
1.3 Research questions
The following research questions were developed in order to
guide the study:
i

Does the electronic payment system enhance service

delivery in the banking system?

ii Does the electronic payment system increase the market

size of the banks?
iii Does

the

electronic

payment

system

enhance

the

competitive advantage of the banks?

iv Does the electronic payment system enhance customer
satisfaction of the banks?
1.4 Scope of the study
In terms of coverage, this study will focus on the effect of
electronic payment system on customer satisfaction in Access
bank Plc. This means that issues relating to electronic banking
will be explained. In view of the technicalities involved, it would
be unrealistic to assume that all necessary facts have been
gathered in the process of the study.