Electronic Retail Payment Systems in Nig

ELECTRONIC RETAIL PAYMENT SYSTEMS IN NIGERIA
:User Acceptance Through Infrastructure Perspectives
Dissertation submitted in part fulfillment of the requirements for the degree of Masters of Arts in Financial
Management at Liverpool John Moores University
Adeniyi Balogun
MASTERS OF ARTS IN FINANCIAL MANAGEMENT DECEMBER 2012

I
Electronic Retail Payment Systems In Nigeria: User Acceptance Through Infrastructure Perspectives A. Balogun
Declaration
No portion of this work referred to in the dissertation has been submitted in
support of an application for another degree or qualification of this or any other
university or other institute of learning. Further, all work in this dissertation is
entirely my own, unless referenced in the text as a specific source and included in
the bibliography.
II
This work is dedicated to the Allu 4.

What a way to pay the ultimate price…
III
Abstract
This study examines the recent “Cash-less” policy of the Central Bank of Nigeria
(CBN), with the main objective of identifying infrastructural constraints to
Electronic Retail Payments Systems’ (ERPS) adoption by the Nigerian consumer.
The paper presents a multidimensional analysis of ERPS’s adoption. It evaluates

characteristics of ERPSs as determinants of user acceptance (Abrazhevich, 2002)
and, through a survey, identified which are most important to Nigerian consumers.
On the other hand, a critical analysis of existing ERPS infrastructure was
undertaken based on international frameworks and guidelines provided by the
CPSS, PSDG and the SADC—scanning authoritative sources for actions set in
motion by Nigerian regulators to mitigate inherent bottlenecks. Finally, this paper
provides recommendations by fusing discoveries from user perceptions of ERPSs
and identified Infrastructural constrictions.
Findings reveal a low level of awareness of the functionality of ERPSs as well as

a lack of trust towards its adoption by Nigerian Consumers. The study also
revealed regulators’ commitment towards the policy; however the “Big-bang1”
approach presents challenges as it seems too much is being undertaken all at once.
In conclusion, this paper presents strategies to improve consumers’ trust in the

“Cash-less” Nigeria initiative, emphasising increased communication, security,
and awareness through various formal and informal mediums.
Key Words: Electronic payment systems, Electronic retail payment, User

acceptance, Nigeria.
1
A type of instant changeover, where parties associated with a new system moves to the fully functioning
new system on a given date
IV
Acknowledgement
To the King of Kings and the Lord of Lords, my God in whom I trust – what
would I be without you? I wonder…
To my Agbèké, my gem of incomputable fortune, here is a BIG thank you.
To Otunba Adeolu Balogun—Mentor Extraordinaire. Thanks for your

investments in me.
My deep appreciation goes to Mr Gavin Brown, Dr Yvonne Morgan, Mr Mike

Cremin and Ms Liz Harvey. Without your individual contributions towards my
personal, academic and professional development at some point, completing this
work would not have been possible. It has been a great privilege learning from,
and meeting you all.
On a final note, to my Siblings, Good friends and my growing number of Nieces

and Nephews, I say thank you for your continuous support and encouragement—
pre, during and post this academic engagement.
I love you all.
Adeniyi Balogun.
Manchester, UK
11th November, 2012
V
List of Content
DECLARATION ............................................................................................................................. I
ABSTRACT .................................................................................................................................. III
ACKNOWLEDGEMENT ........................................................................................................... IV
LIST OF TABLES .................................................................................................................... VIII
LIST OF FIGURES ..................................................................................................................... IX
LIST OF ABBREVIATIONS ...................................................................................................... XI
1. INTRODUCTION ......................................................................................... 1
1.1 STUDY BACKGROUND ......................................................................................... 1
1.2 COUNTRY OVERVIEW.......................................................................................... 3
1.3 PROBLEM DISCOURSE ......................................................................................... 5
1.4 RESEARCH OBJECTIVES AND QUESTIONS ........................................................... 7
1.5 SCOPE AND DELIMITATION ................................................................................. 8
1.6 STRUCTURE OF DISSERTATION ........................................................................... 9
2. ELECTRONIC RETAIL PAYMENT SYSTEMS (ERPS) ..................... 11
2.1 DEFINITION OF ERPSS ...................................................................................... 12
2.2 GLOBAL SNAPSHOT OF NON-CASH PAYMENTS ................................................ 12
2.3 THE NIGERIAN CONTEXT .................................................................................. 14
2.3.1 Electronic Payment Environment in Nigeria ............................................................. 16
2.3.2 Types and classifications of ERPSs in Nigeria ......................................................... 19
2.4 USER ACCEPTANCE OF TECHNOLOGY .............................................................. 26
2.4.1 Technology Adoption Theories .................................................................................. 26
2.4.2 ERPS Characteristics as Determinants of User Acceptance ..................................... 29
2.5 MECHANISM OF ELECTRONIC RETAIL PAYMENT SYSTEMS.............................. 31
2.6 INTERNATIONALERPS FRAMEWORKS AND GUIDELINES ................................. 33
2.6.1 Payment Systems Development Group (PSDG) ........................................................ 34
2.6.2 Committee on Payment and Settlement Systems (CPSS) ........................................... 36
2.6.3 Southern African Development Community (SADC) ................................................ 37
3. RESEARCH METHODOLOGY ............................................................... 39

3.1 RESEARCH PURPOSE ......................................................................................... 39
3.2 PRAGMATISM PHILOSOPHY ............................................................................... 40
3.3 MIXED APPROACH ............................................................................................ 42
3.4 ACTION RESEARCH STRATEGY ......................................................................... 43
3.5 MIXED-MODEL CHOICES .................................................................................. 44
3.6 DATA COLLECTION AND ANALYSIS .................................................................. 46
3.6.1 Self-Administered Questionnaires ............................................................................. 46
3.6.2 Multiple-Source Secondary Data .............................................................................. 47
3.6.3 Stratified Random Sampling ...................................................................................... 48
3.6.4 Quantitative and Qualitative Data Analysis .............................................................. 48
3.7 ACCESS.............................................................................................................. 49
3.8 ETHICAL CONSIDERATIONS............................................................................... 49
VI
3.9 CREDIBILITY OF RESEARCH DESIGN ................................................................. 50

3.9.1 Validity ...................................................................................................................... 50
3.9.2 Reliability .................................................................................................................. 51
3.9.3 Generalisability ......................................................................................................... 52
4. USER SURVEY OF ERPSS ....................................................................... 53

4.1 DEMOGRAPHICS AND DESCRIPTIVE STATISTICS .............................................. 53
4.1.1 Age............................................................................................................................. 54
4.1.2 Education .................................................................................................................. 55
4.1.3 Income And Employment ........................................................................................... 56
4.2 USER PERCEPTIONS OF ERPSS CHARACTERISTICS ........................................... 57
5. NPS STOCKTAKING REPORT ............................................................... 62
5.2 ENVIRONMENTAL .............................................................................................. 64
5.2.1 Country Demographics ............................................................................................. 64
5.2.2 Physical Infrastructure .............................................................................................. 66
5.3 INSTITUTIONAL ................................................................................................. 69
5.3.1 FGN ........................................................................................................................... 69
5.3.2 CBN ........................................................................................................................... 70
5.3.3 DMB .......................................................................................................................... 71
5.3.4 Non-Banks ................................................................................................................. 72
5.3.5 Telecommunications Networks .................................................................................. 74
5.3.6 Switching Companies ................................................................................................ 75
5.4 LEGAL AND OVERSIGHT LANDSCAPE ............................................................... 76
5.5 TECHNOLOGICAL............................................................................................... 78
5.5.1 Infrastructure and Application .................................................................................. 78
5.5.2 Development and Deployment of Technology ........................................................... 79
5.6 BUSINESS ENVIRONMENT ................................................................................. 82
5.7 FINANCIAL......................................................................................................... 83
5.8 SWOTS GRID .................................................................................................... 84
6. CONCLUSIONS AND RECOMMENDATIONS .................................... 85
6.1 TRUST .............................................................................................................. 86
6.2 SECURITY ....................................................................................................... 87
6.3 COST ................................................................................................................ 87
6.4 RELIABILITY AND USABILITY .................................................................. 88
6.5 CONFIDENTIALITY AND REWARD ........................................................... 89
7. RESEARCHER’S REFLECTIONS ON LEARNING ............................. 92
7.1 INTRODUCTION .................................................................................................. 92
7.2 WHAT HAS BEEN LEARNT? .............................................................................. 92
7.3 HOW HAS THE LEARNING OCCURRED? ............................................................ 94
7.4 FUTURE APPLICATIONS OF LESSONS LEARNT .................................................. 97
REFERENCES AND BIBLIOGRAPHIES ...................................................... 98
APPENDICIES.................................................................................................. 114
APPENDIX A1 LEGAL: SCORING METHODOLOGY ....................................................................... 114
VII
APPENDIX A2 DEPLOYMENT SCORING METHODOLOGY ............................................................ 115

APPENDIX A3 OVERSIGHT SCORING METHODOLOGY................................................................ 117
APPENDIX B SURVEY INSTRUMENT ......................................................................................... 119
APPENDIX C GUIDELINES ........................................................................................................ 123
APPENDIX D HYPOTHESIS TESTING ......................................................................................... 124
VIII
List of Tables
Table 1 Selected Social and Infrastructure Indicators
Table 2 Product classification
Table 3 Channel classification
Table 4 ERPS Characteristics
Table 5 NPS Perspective
Table 6 Pragmatist Philosophy
Table 7 Approach emphasis
Table 8 Strategy Criteria
Table 9 Qualitative v Quantitative
Table 10 Mixed-Model
Table 11 Questionnaire choice criteria
Table 12 Country demographics
Table 13 Communication facts
Table 14 Electricity facts
Table 15 Transportation facts
Table 16 DMB facts
Table 17 Legal and oversight scoring
Table 18 Development and deployment scoring
Table 19 SWOTs Grid

IX
List of Figures
Figure 1 Timeline of money
Figure 2 GDP Growth rate
Figure 3 OPEC Share of world crude oil reserves
Figure 4 GNI per capita (US$)
Figure 5 Structure of dissertation.
Figure 6 Literature Map
Figure 7 Global Non-cash Payment Report 2011
Figure 8 Key Global players Currency-In-Circulation
Figure 9 Nigerian cash transaction
Figure 10 World Literacy map 2011
Figure 11 CIC to GDP ratio
Figure 12 CIC per capita
Figure 13 Corruption Perception Index 2011
Figure 14 Internet users (per 100 people)
Figure 15 Mobile cellular subscriptions (per 100 people)
Figure 16 Electric power consumption (kWh per capita)
Figure 17 Cards accepted here sign
Figure 18 Mobile phone transactions
Figure 19 M-PESA transaction in Kenya
Figure 20 POS Transaction
Figure 21 ATM located outside bank
Figure 22 Biometric authentication
Figure 22 Diffusion of innovations
Figure 23 Technology Adoption Model
Figure 24 Theory of Reasoned Action
Figure 25 Organisation of electronic retail payment systems
Figure 26 Electronic retail payment processes.
Figure 27 Payment System Development Group Framework

X
Figure 28 NPS MODEL
Figure 29 The research ‘onion’
Figure 30 Qualitative V Quantitative
Figure 31 Age demographics
Figure 32 Education demographics
Figure 33 Income and employment demographics
Figure 34 Survey highlights
Figure 35 Interoperability and Acceptability
Figure 36 Non-Banks and trust
Figure 37 Innovations in smartcard technology
Figure 38 Kolb’s Learning Cycle
Figure 39 Kolb with Honey and Mumford Combined

XI
List of Abbreviations
ACH Automated Clearing House
ATM Automated Teller Machine
B2C Business to Consumer
BIS Bank for International Settlements
BRIC Brazil Russia India and China
CIC Cash in Circulation
CBN Central Bank of Nigeria
CEMEA Central Europe Middle East and Africa
CPSIPS Core Principle for Systematically Important Payment Systems
CPSS Committee on Payment and Settlement Systems
DMB Deposit Money Bank
EBPP Electronic Bill Presentment and Payment
EFINA Enhancing Financial Innovation and Access
ERPS Electronic Retail Payment Systems
FGN Federal Government of Nigeria
FSAP Financial Sector Assessment Program
GDP Gross Domestic Product
GNI Gross National Income
GSM Global System for Mobile Communications
HIC High income countries
ICT Information Communication Technology
IMF International Monetary Fund
LIC Low income countries
NBS National Bureau of Statistics
NIBSS Nigerian Inter Bank Settlement Systems
NPC National Planning Commission
NPS National Payment System
OPEC Organisation of Petroleum Exporting Countries
OTC Over the Counter
P2P Person to Person

XII
PIN Personal Identification Number
PSP Payment Service Providers
POS Point of Sale
PSDG Payment Systems Development Group
SADC Southern African Development Community
SIPS Systemically Important Payment Systems
SSA Sub Saharan Africa
SWIFT Society for Worldwide Interbank Financial Telecommunications
TAM Technology Acceptance Model
TALC Technology Adoption Life Cycle
TRA Theory of Reasoned Action
UKTI United Kingdom Trade and Investment
WPR World Payment Report

1
1. Introduction
In this chapter the researcher introduced the topic that is being researched:
“Electronic Retail Payment Systems in Nigeria

: User acceptance through infrastructure perspectives”
The researcher described the background, country overview, problems statement,
scope, as well as the research objectives and questions.
1.1 Study Background

In his classic work, An Inquiry Into The Nature and Causes of The Wealth of
Nations, Adam Smith noted, “the division of labor from which so many
advantages are derived, is not originally the effect of any human wisdom, it is the
necessary, though very slow and gradual, consequence of a certain propensity in
human nature, which has in view no extensive utility; the propensity to truck,
barter and exchange one thing for another” (Smith 1776, vol. 1: 17).
Since the overcoming of barter in the history of mankind, trade has consequently
involved the exchange of goods and services for equivalents of abstract value
representation such as money (Sadeghi and Schneider 2001). A reality, “through
which every man lives by exchanging, and or becomes in some measure a
merchant, and the society itself grows to be what is properly a commercial
society” (Smith 1776 vol. 1: 20).
Over the course of history, abstract value depictions has seen money evolve
through primitive items such as cowries and cattle (9,000 BC), coins (1000 BC),
fast forward to the penny and the pound in medieval European era between 410-
1485 (Davies 1996).
2
Figure 1 Timeline of money source: www.bemoneyaware.com
Expansion in trade and finance volumes in 1485 saw money evolve through cash
as banknotes, cheques and early paper-based credit card payments (ibid). Money
in the process has facilitated exchange, stored value, served as a unit of account
and hence, measurement, whilst also furnishing a platform for deferred payments
(Stewart 1898, Spalding 1921).
Innovations in payment technology such as ATMs, credit cards and mobile

payment etc. have recalibrated traditional payment systems (Kalakota & Whinston
2000, WPR 2011, BIS 2012), bypassing the human interface through banks
(Abrazhevich 2001a). This paradigm shift forms its base on cashless transactions,
where individuals are able to pay for goods and services through electronic
channels, absent physical cash (Khiaonarong and Liebenau 2009) – in a form
known as e-payment (Asaolu et al 2011).
This is not to infer earlier means of payments have not served their purpose. Just
as paper money replaced precious metals to pave way for the industrial revolution
(Estabrooks 1988), ERPSs are here to provide a platform for globalisation.
During the late 1990s, a number of African nations began implementing policies
to modernise their National Payment Systems (NPS) (Susanto and Zo 2011).
Progresses in e-payment technology had informed an opportunity to improve the
effectiveness of existing retail payment structures (SADC 2002).
Preceding deployment of electronic retail payment in Nigeria, cash-dependence

meant retail transactions were 100 percent cash based (Asaolu et al 2011). This
deterred most Nigerians from depositing their money in banks, opting instead to
save and spend in physical cash (Ayo 2012, Ovia 2009). Among other matters to
be explored, this phenomenon increased the number of adult population without
bank accounts and its related services (Gholami et al 2010).
3
Driven mainly by ATMs, the use of e-payment systems in Nigeria accounted for
N360bn ($2.4bn) transaction value in 2008 (Ayo et al 2008). With a $250bn GDP
in the same year, this is comparatively low (Adesina and Ayo 2010). ATMs are
used mainly for cash withdrawal towards the final leg of retail transactions (ibid),
bypassing payment channels like the POS and internet based e-commerce.
Notwithstanding renewed efforts to entrench e-payment use, cash remains the
most preferred payment method among Nigerians.
1.2 Country Overview

Nigeria is the most populous country in Africa with a population of 168 million
people (NBS Nigeria 2012). As Africa's second-largest economy (after South
Africa), Nigeria has one of the fastest growing economies in the world, with an
average real GDP growth rate of 7.2% between 2009–2011 (World Bank 2012).
Figure 2 GDP Growth rate Source: World Bank, 2012
Ranked as the 8th largest among OPEC members in crude oil reserves, Nigeria
remains under developed, owing to years of successive military rule and economic
mismanagement (Okonjo-Iweala et al. 2007, UKTI 2010).
4
Figure 3. OPEC Share of world crude oil reserves
As a consequence, economic stagnation engendered increased poverty and

depletion of public institutions (Obasanjo 2007), heralding endemic corruption
(Okonjo-Iweala 2007). Public expenditure on human capital and infrastructural
development has been affected as a result; with 70% of Nigerians currently living
below poverty line (CIA 2012). In 2011 GNI per capita shows Nigeria is way
behind at $1200 per capita in comparison to South Africa, UK and the USA.
Figure 4 GNI per capita (US$) Source: World Bank, 2012
Table 1 highlights select social indicators in comparison with world regions on

income differentiated basis. This summarily attempts to presents the Nigerian
picture.
5
Table 1. Selected Social and Infrastructure Indicators

2009-2010
NIGERIA SSA LIC2 HIC
GNI per capita Atlas Method (US$) 1,180 1,176 528 40,136
GDP (US $ bn) 194 1,097 416 40,819
Internet users (per 100 people) 28.4 10.9 30.5 69.8
Mortality rate, under 5 (per 1,000) 143 58 58 58
121 511.5 229.5 9,117

Electric power consumption (kWh per capita)
61 73 - 100
Literacy rate %
Source: Adapted from Okonjo-Iweala et al (2007)
While its public institutions are still fragile (CIDA 2012), Nigeria has undertaken
a series of national reform programmes since returning to democratic governance
in 1999. The Nigeria Vision 20:2020 strategy is aimed at launching the country
onto a path of sustained and rapid socio-economic development by year 2020. A
subset, The Payment System Vision 2020 was developed in 2007 with an
objective to promote and entrench electronic payments among economic agents.
(NPC Nigeria 2012)
1.3 Problem Discourse

The Central Bank of Nigeria (CBN), a body responsible for the overall control
and administration of the Federal Government of Nigeria’s (FGN) monetary and
financial sector policies, issued a policy circular on 20 April, 2011, titled
“Industry Policy on Retail Cash Collection and Lodgement”. Taking effect from
1st January 2012, it stipulates a maximum daily amount of cash withdrawals and
lodgements through Deposit Money Banks (DMBs), for individuals and
corporations, above which a cash handling charge is applied.
This policy gave rise to the “Cash-less” Nigeria initiative, with the primary
objective of entrenching electronic payment adoption for retail transactions. The
2
On 16th April 2011, Nigeria was upgraded from Lower Income to Lower Middle Income
(World Bank, 2012)
6
CBN assures that when fully operational, the policy will drive the development
and modernisation of Nigeria’s national payment systems (CBN 2011).
A lot of criticisms have trailed the “Cash-less” policy since its introduction,
mainly owing to presumed inadequacy in planning, low awareness levels of
banking services, online-payment fraud, and the deficient state of existing e-
payment framework (Guardian Nigeria 2011, Atanda and Alimi 2012).
User acceptance being crucial to the success or failure of any information system
initiative (Davis 1993, BIS 2012,Tucker 2012) is a major barrier confronting the
“Cash-less” Nigeria project—understanding its dynamics is important for the
success of the initiative.
Although “there is nothing impossible to him who will try” (Alexander the Great,
nd), Nigeria’s present legal, knowledge and physical infrastructure framework
present strong challenges to the smooth transition from an omnishambles e-
payment structure, to Nigeria’s “Eldorado” of electronic retail payment
technology dispersion.
The researcher believes findings from this undertaking will provide fresh analysis
and insight to enable consumers, analysts and policy makers understand and
identify challenges to ERPS’s adoption in Nigeria and, through the process
contribute to the general body of knowledge.
7
1.4 Research Objectives and Questions

Against this backdrop, the major thrust of this paper is to investigate and evaluate
characteristics of ERPSs which inform consumer patronage, and through the
lense of international frameworks and guidelines, identify infrastructural
challenges to user acceptance.
The specific objectives are as follows:
1. To describe what an electronic retail payment system is.

2. To identify electronic retail payment systems in Nigeria.
3. To assess and explore issues of Nigerian users’ acceptability of ERPSs
4. To highlight potential and impending infrastructural constrictions to
ERPS’s acceptance in Nigeria.
5. To make recommendations.
The prominent research questions are:
1. What are ERPSs?

2. What types of ERPSs exist in Nigeria?
3. What ERPS characteristics drive the Nigerian consumer’s behaviour
towards its adoption?
4. What are the infrastructural constraints to implementing efficient ERPS in
Nigeria?
5. Have any arrangements been made by Nigerian stakeholders to contain
these challenges?
6. What else can be done?
8
1.5 Scope and Delimitation

Due to resource constraints, encompassing all important details critical to ERPSs’
functionality will not be feasible. However, by recognising a select, this paper
aims to assist augment understanding of ERPSs in congruence with those
Nigerian consumers, analysts and policy makers might be familiar with. For this
reason, focus will be based mainly on electronic retail payment methods grounded
on banking services such as ATMs, debit and credit cards, mobile, etc.
The term e-payment and ERPS are used interchangeably in its most liberal sense,
to represent small-value monetary transactions which enable storage and
expenditure for consumer goods and services, wholly or partly through electronic
channels. In the ICT diction, this is better referred to as Business to Customer
(B2C) and Person to Person (P2P). Emphasis is on end users, sometimes referred
to as customers or consumers.
Obtaining coveted information from the Nigerian business environment was

tough, particularly owing to non-availability of detailed data from government
departments on e-payment transactions. It would have helped if interviews with
assigned project managers were conducted, as deeper insights on preparations
and arrangements will have been attained. In addition, getting accurate data on
surveyed customers’ education and financial status had to be approached with
caution.
9
1.6 Structure of Dissertation

This diagram shows briefly how the dissertation is written and organised (See
figure 5). The dissertation is organised in 6 chapters following this order.
Chapter 1: Chapter 2: Chapter 3: Research

Introduction Electronic Retail Methodology
Payment Systems
Chapter 4 & 5:
Chapter 6: Conclusions Findings, Analysis
and Recommendations and Discussions
Chapter 7: Self-reflective
Learning
Figure 5 Structure of dissertation. Source: Authors Diagram
The literature map (Figure 6) describes relationships between components of this

paper.
10
Figure 6 Literature Map Source: Author Design
NIGERIA
User Acceptance of Electronic retail Infrastructure Perspectives
payment systems
Characteristics
Background
Background Framework
Definition of Macro Economy Telecommunicatio

Theories
EPS ns:
Types
Infrastructure Electricity SADC CPSS PSDG
Literacy Banking Sector
Income levels Vision 20:2020
Surveys and Guidelines

Measurement
for developing
benchmarks for certain
Diffusion of innovation, User related EPS NPS Perspective: Electronic retail
Nigerian context, Defined based on Online Evaluated by Product components of the NPS
Technology Acceptance Model characteristics to guide findings payment systems in
World payment and face to face and Channel perspective
Theory of Reasoned Action and discussions countries
report survey application
Figure 7 Lite
1 and 2 What are 3. What ERPS characteristics drive the 4. What are the infrastructural 5. Have any arrangements
ERPSs and which Nigerian consumer’s behaviours towards constraints to implementing been made by Nigerian
RESEARCH ERPSs systems exist in electronic retail payment adoption? efficient electronic retail payment stakeholders to contain
QUESTIONS Nigeria? systems in Nigeria? these challenges?
ram
6. What else can be done?
11
2. Electronic Retail Payment Systems

Chapter one introduced the background, problem discourse and the specific
research objectives and questions. This chapter aims at building a theoretical
framework for answering the research questions. It provides contributions on
ERPSs and the Nigerian situation; user acceptance of technology theories and
ERPS characteristics—completed with frameworks to assess existing ERPS
infrastructure.
In a letter to his rival Robert Hooke, in 1676 Isaac Newton said “I have seen a
little further; it is by standing on the shoulder of Giants” (Hawking, 2002:725).
Moving from this notion, a critical review of literature follows the assumption that
knowledge about a particular subject can be derived from, and built upon work
carried out by others on a particular subject matter.
The objective of any literature review is thence, to establish conversance with an

existing body of knowledge, and in the process, by proving credibility,
demonstrate the linkage between previous research work and current study;
reconciling and summarising that known, towards the propagation of new
thoughts and ideas.
Several researchers have addressed issues of user acceptance of electronic retail

payment systems. However, a close look reveals these have not taken a holistic
view of the entire ERPSs landscape with most being one dimensional analysis.
For example, most contributors have focused on specific aspects like fraud, trust,
usability, ERPSs systems design and so on (ISO 9241 1996, Lee et al. 2010,
Wierzbicki 2010, Efendioglu et al 2004, Abrazhevich, 2001b), others have written
exclusively about payment mediums like POS, ATMs and internet (Adeoti et al
2012, Adeoti and Oshotimehin 2011, Agbasi et al 2010, Onyema, 2011, Atanda
and Alimi 2012, Okafor and Ezeani 2012).
In the international scene, the Nigerian context is often left out of considerations
for ERPSs development. Although organisations like the CPSS and PSDG attempt
12
to provide guidelines and recommendations for ERPSs entrenchment in countries

worldwide, their views often times leave out country specific vectors which are
crucial to the ERPS calculus.
For these reasons, the researcher has attempted to consider a wide array of
contributions, to ensure a clear picture of user acceptance of ERPSs in Nigeria is
presented.
2.1 Definition of ERPSs

Due to the ever evolving nature of ERPSs, there is yet to be a universally agreed
definition for it (Tyree et al 2000). The researcher nonetheless, has attempted to
consider a notable select, ranging from remote online based e-commerce use, to
its face-to-face application.
Kalakota & Whinston (1997) describe e-payment as an exchange of digital

financial instruments between buyers and sellers which take place online. Taking
this further, it is also defined as payments by direct credit (Humphrey et al 2001),
electronic transfer of payment card details or through other electronic channels
(Agimo 2005a). As electronic money facilitates ERPSs, it can be said an ERPS is
one in which “monetary value as represented by a claim on the issuer is stored on
an electronic device and accepted as means of payment by undertakings other than
the issuer” (ECB 2001:40).
2.2 Global Snapshot of Non-Cash Payments

According to the World Payment Report (2011), global volume of non-cash
payments transactions grew by 5% in 2009 to 260 billion, despite macroeconomic
weaknesses. It further highlights electronic payments’ rapid adoption in
developing economies (see figure 7). Fuelled mainly by the growing use of card
payments, in 2009 usage rose 22% In CEMEA while it was 8.6% for BRIC. The
US and the Euro area remain by far the largest non-cash payment markets
worldwide, accounting for 40% and 21% respectively in 2009.
13
Figure 7 Global Non-cash Payment Report 2011 Source: WPR, 2011
Currency-in-Circulation to GDP ratio as a measure of cash dependence (Collins et

al 1999), is highest in Japan at about 18% in 2010, followed by Hong Kong at
13% (Figure 8). Sweden where bills and coins make up about 3 percent of the
economy (CBN news 2012) ranks least at 3.16%.
Figure 8 Key Global players Currency-In-Circulation Source: The Economist, 2012

14
2.3 The Nigerian Context

In Nigeria, traditional retail payments are centred on the use of cash in settling
transactions, where a buyer sees a product, examines it and pays for it in cash
(Ibrahim 2009). It would not have been a rare sight in the early 90’s to observe
transactions where kilograms of cash were being exchanged for goods of similar
weight, carried in what are known as “ghana must go bags 3”. To simplify retail
transactions, high value currency notes have unendingly been introduced by the
CBN into the economy (Sanusi 2012), complemented by its attendant implications
for cash management, security and money laundering (Lemo 2011, Adeoti and
Oshotimehin 2011).
Figure 9 Nigerian cash transaction 4 Source: www.bbc.co.uk
Despite earlier attempts by commercial banks, e-payment products launched have

had low adoption rates owing to various reasons. Nwokocha (2009) identified
that for transactionary purposes in Nigeria, confidence in cash overshadows other
forms of payment. Also the Nigerian psychology is inclined to hold and touch a
payment medium like cash, ascribable to illiteracy and ignorance of e-payment
benefits (Ovia, 2002). The depletion of education standards over the years had
seen literacy rates plummet (CIA, 2012), recording 61% in 2011.
3
Not related to the country Ghana
4
USD 1 = Naira 157; GBP 1= Naira 252 at 20.11.12
15
Figure 10 World Literacy map 2011 Source: CIA Factbook 2012
As shown in figure 11, cash usage increased in 2009, reaching USD9.2bn in 2011.
This same measure shows a decline in Sweden, with the US having the highest
percentages overall. However, CIC per capita (Figure 12) depicts an interesting
angle where cash usage in Nigeria is lower than those of Sweden and the UK.
CIC to GDP ratio

8
7
6
Sweden
5
4 United Kingdom
%
3 United States
2
Nigeria
1
0
2006 2007 2008 2009 2010
Figure 11 CIC to GDP ratio (Data from BIS 2012, CBN 2012) Source: Author design
CIC per capita

3.50
3.00
2.50 Sweden
2.00
'000
United Kingdom
1.50
United States
1.00
0.50 Nigeria
0.00
2006 2007 2008 2009 2010
Figure 12 CIC per capita (Data from BIS, 2012; CBN 2012: World Bank 2012) Source: Author design
16
2.3.1 Electronic Payment Environment in Nigeria

A host of inefficiencies underlie the existing payment process. One potential
reason for negative user attitudes towards ERPSs stems from Nigeria’s reputation
for electronic fraud (David-West, 2012), where concerns of fraud-risks discourage
user adoption of e-payment mediums (Olusegun 2006; Lee, 2009). Transparency
international ranked Nigeria 143 least corrupt of 183 countries surveyed in 2011.
More, KPMG, A global audit and financial advisory firm, in its June 2012 Africa
Fraud Barometer Report, rated Nigeria as the most fraudulent country in Africa.
Figure 13 Corruption Perception Index 2011 Source: Transparency international, 2012
Internet adoption (see figure 14), although rapidly permeating public and
commercial transactions since 2003 (Akintola et al 2011), diffusion rates in rural
areas are considerably low (Adeyeye, 2008) counteracting the entrenchment of e-
payment dispersion nationwide (Anyanwu et al, 2012).
Figure 14 Internet users (per 100 people) Source: World Bank, 2012
17
While all hope is not lost, mobile cellular subscriptions have continuously
increased, with geometric growth in user numbers since 2003. Active telephone
lines have leaped from 51,000 in 1999 to over 90million in Q2 2012 (NBS,
Nigeria 2012). These growths in subscriber numbers present an opportunity for
mobile phone payment technology, particularly in rural areas where internet
penetration rates remain low (EFINA, 2010; Oviosu 2012; NCC, 2008).
Figure 15 Mobile cellular subscriptions (per 100 people) Source: World Bank, 2012
Take electricity infrastructure (see figure 16), at 121 kWh per capita in 2009 is
abysmal. In comparison, the US and UK averaged 13,000 and 6000 kWh
respectively in the same year. Irregular power supply contributes to
underdevelopment of ICT in Nigeria (Onyema, 2011). ERPSs require a threshold
level of electricity capacity to operate efficiently (SADC, 2002; BIS, 2012) as
electronic information should flow to initiate and confirm transactions efficiently
(discussed further in 2.5).
Figure 16 Electric power consumption (kWh per capita) Source: World Bank, 2012
18
Following banking sector reforms between 2004 and 2005 (Oyegoke, 2007),
DMBs were required to increase their minimum capital base from $15m to
$192m. This lead to mergers and acquisitions in the banking sector (Ayo et al
2005). DMBs reduced from 89 weak institutions to 25 sound ones (Bello, 2006;
Sanusi 2011).
Banks are the primary providers of retail payment instruments in Nigeria. To

ensure efficient service delivery, these recharged institutions employed ICT
solutions such as POS, ATM and, Mobile banking towards growing market share
(Ayo and Ukepere, 2010; Oni and Ayo, 2010; Mukherjee and Nath, 2003) with
most commissioning non-interoperable softwares and hardware platforms
(Chiemeke, 2008; Anyanwu et al, 2012). As a result, 80% of branches do not meet
the minimum logistical requirement needed to support electronic banking as only
20% have real-time ICT interconnectivity (Nwokocha, 2009).
Non-Bank providers on the other hand, are engaged in offering targeted payment
solutions like prepaid cards and payment processing networks (EFINA, 2010).
The Nigerian postal services NIPOST is at the forefront, extending banking
services to the unbanked as well as rural dwellers, enabled by its branch outreach
(ibid).
Other analysts and stakeholders have echoed the current legal framework among
other infrastructural deficits, as vectors against ERPSs’ functionality (Bello, 2006;
Oghenerukevbe, 2010; Dankwanbo 2009). Despite attempts been made by the
government to contain these challenges, they still impair ERPSs’ adoption and
operation.
In the area of supervisory and oversight functions, the Nigerian National

Assembly passed laws to strengthen the CBN through the amended CBN Act
2007. In tackling corruption, money laundering and internet fraud were stressed,
seeing two institutions established. The Economic and Financial Crimes
Commission (EFCC) and the Independent Corrupt Practices and Related Offences
Commission (ICPC).
19
While Nigeria is aching for socio economic development, it would seem

electricity infrastructure, legal framework and literacy considerations will frustrate
the ERPS entrenchment drive, or so it seems. We now proceed to explore the
types available.
2.3.2 Types and classifications of ERPSs in Nigeria

Three factors are stimulating the development of ERPSs: reducing operational and
payments processing costs, growing online commerce and the decreasing costs of
technology (Kalakota & Whinston, 1997). For a retail payment to occur, a
mechanism and a value bearing instrument must exist (Reserve Bank of Australia,
2008). Classified based on product and operational channel features (BIS,
2012), types of electronic products for retail transactions in Nigeria can be
described as follows:
A. Payment Product Classification
Card Electronic Emerging
Credit Direct debit Mobile phone
Debit Direct credit
Prepaid Bill Payment
Table 2 Product classification Source: Author Design
I. Card Based Products

With prevalence in urban areas, these include credit, debit and prepaid cards. Most
cards are similarly sized, measured 85.60 × 53.98 mm, as expounded by the ISO
7810 international standard (Paul, 2006). Currently dominated by Interswitch, the
Nigerian domestic card market has since 2008, had Visa and Mastercard become
more active players (EFINA, 2008).
Credit cards
These have a buy it and pay later feature, with the revolving credit paid partly or
in full (O’Mahony et al, 2001). Low level of financial inclusion and the absence
20
of credit scoring bureaus mean credit card use is still very low in Nigeria (Ovia,
2002).
43.
Debit cards
These enable the holder to access funds in a current account with transaction value
debited immediately (Chaudbury and Kuiler, 2002). Typically used for smaller-
value transactions, in 2009 over 20m were issued, recording above 100m
transactions (Interswitch, 2010; Ovia, 2009). It is estimated that over 50% of
cards issued are inactive (EFINA, 2010). It has also been noted that Identity
verification is loose for opening bank accounts in Nigeria (Nwokocka, 2009). It is
important KYC procedures are thorough, to mitigate money laundering (CPSS,
2004).
Prepaid cards
Stores value on cards for small-value transactions. They are usually not PIN
protected and are very susceptible to fraud through theft or loss (BIS, 2004). Daily
transaction limits are set low at USD133 per day (CBN 2010). Low Authorisation
levels could also be a consideration affecting confidence in its adoption in
Nigeria.
Figure 17 is usually displayed where cards are accepted as a means of payment.
Figure 17 Cards accepted here sign Source: www.pebblestones.co.uk
II. Electronic Based Products

These include direct entry and Electronic Bills Presentment and Payment (EBPP).
Direct entry transactions include direct credit, where through internet banking or
OTC, payer initiates transactions directly from their bank account. The other,
direct debit, payer’s pre-arranged approval allows recipient initiate payment from
payer’s bank account. Income levels inform choice of direct entry as a payment
21
choice (Kwast and kennickell, 1997; Mantel 2000), low levels of incomes as seen
in Nigeria, affects is adoption amongst users.
The EBPP provides means to pay utility bills, levies and so on over the Internet
(Ovia, 2008). Case in point, the Electronic Tax Administration and Payment
(ETAP) systems enable on-line tax returns. According to Okure (2012) awareness
through education and marketing are inimical to EBPP adoption in Nigeria.
III. Emerging Options

Innovations in retail payments are constantly emerging, influencing users in their
choice of payment instrument by remodelling the payment process. (Tucker
2012).
Mobile phones
Initiates and confirms payment through a mobile telecommunications device
(Zika, 2005). M-payments as also referred, are expected to grow globally from 4.6
to 15.3 billion transactions between 2010 and 2013 (WPR, 2011). Its use as a
payment product is growing rapidly in Nigeria where the adult population own
more phones than bank accounts (Oviosu, 2012). By early 2012, the volume of m-
payments increased 300% over 2008 to USD63m, reflecting the improving
teledensity in Nigeria (Adeoti and Oshotimehin, 2012).
Mobile phone payments can be categorised in two ways.

1. For phone related services where data is provided through a mobile device
(e.g. maps and music)
2. Payments with mobile phone as a payment device particularly in P2P
transactions.
22
Figure 18 Mobile phone transaction Source: www.verifone.com
Figure 19 M-PESA transaction in Kenya Source: www.afritorial.com
Successes have been achieved with mobile money in Africa. An example is the
M-PESA offered in Kenya, which has seen financial inclusion among the
unbanked population improve (Mckinsey, 2012).
B. Operational Channels Classification

Facilitate the use of a number of payment products, such as credit cards, debit
cards, and direct entry products etc. through channels describes as follows.
Electronic Over-the-counter Emerging

POS Bank Branches Biometrics
ATM
Internet
Table 3 Channels classification Source: Author design
23
I. Electronic Based Channels

Every payment product requires a payment mechanism to facilitate electronic
transfer of information and funds, types typically used in Nigeria include:
POS terminals
POS networks link point-of-sale terminals and allow the use of payment cards for
the purchase of goods and services at several locations (Ayo et al. 2010). POS
adoption is still relatively low in comparison to the rest of e-payment systems
(CBN, 2009). In June 2011 about 11,000 were deployed nationwide (Obiano,
2012), however, it is estimated only 25% were active, referable to network
infrastructure failure and merchants resistance to adopt, owing to high charges
(EFINA, 2010). According to Adeoti and Oshotimehin (2012), fewer customers
are satisfied with speed of transactions, merchants’ services levels and security.
Figure 20 POS Transaction Source: www.heraldsun.com.au
ATMs
Mostly found outside banks, initiates transactions by cards, verified by a PIN
(Rose, 1999). Services like cash deposits, EFT and bill payments are increasingly
being offered through ATMs (Abor, 2004). ATMs use continues to grow
(Adepoju and Alhassan, 2010, Ayo et al., 2010), albeit as a cash dispensing
machine. In 2010, value of transactions stood at USD1.7bn representing a 99%
increase above 2008 (CBN, 2011), owing to aggressive deployment and user
adoption (Adeoti and Oshotimehin, 2012).
While Adeyemi (2010) contends that people spend exuberantly due to ease of
cash withdrawal, others echo, access through interoperability and fraud are
challenges negating ATM adoption in Nigeria (Muhammad 2009; Afam 2009).
24
Some contributors stress further, the high teleco and private electricity generation
costs (EFINA, 2010; Nwokocha, 2009) as well as contentedness of the citizenry
with “home banking” remain major drivers limiting its acceptance (Uzor 2009).
Figure 21 ATM located outside bank Source: www.wangjiashuo.com
Internet
Consumers have a choice of either transacting from an internet banking portal or
through e-commerce enabled websites. Nigerian consumers are gradually
adopting e-commerce, rooted on internet banking services which enable third
party transactions (Ovia, 2008, Susanto and Zo 2011). However, the lack of trust
and confidence informs consumers’ preference to be physically present during
transactions (Efendioglu et al, 2004; Adeshina and Ayo, 2010; Susanto and Zo,
2011; Pan and Zinkhan, 2006).
II. Over-The-Counter (OTC)

Over-the-counter is a highly flexible channel as it facilitates nearly all types of
payments products. At bank branches, customers can initiate EFTs, update
personal banking records, set up direct payments plus a number of other
transactions. OTC channel is often characterised by long queues, where customers
waste long hours in banking halls to transact (Asaolu et al, 2011).
25
III. Emerging Channels
Biometrics
Computerised identification payment channels for individuals, by analysing
physical characteristics. Common types in use today include: fingerprints, voice
recognition, and iris recognition (Mordini, 2012). Payment applications using
biometrics are fast emerging with fingerprint authorisation leading innovations
(BIS, 2012).
Figure 22 Biometric authentication Source: www. eandt.theistt.org
Biometric authentications are well suited for relatively high-risk transaction

environments like Nigeria. Ibiyemi et al (2011), opines the high levels of ATM
fraud in Nigeria can be checked by the use of biometric security features while
Atanda and Alimi (2012) stress integration of the national database of citizens’
identities as critical success factors for biometrics adoption.
With so many user negating insights identified, we shall move on to explore some
theories on ICT adoption. By so doing, we hope to present how human behavioral
factors influence ERPS acceptance. Noting, infrastructural deficiencies alone are
not responsible for ICT non-adoption (BIS, 2012; Rogers, 1998).
26
2.4 User Acceptance of Technology

Concurring with Dillon & Morris (1996), user acceptance is “the demonstrable
willingness within a user group to employ information technology for the tasks it
is designed to support”. Absent such acceptance, no technology can successfully
exist on the market, with ERPSs being no exception (Abrazhevich, 2001c).
2.4.1 Technology Adoption Theories

Rogers (1983) on the diffusion of innovations, describes the adoption or
acceptance of a new electronic product in line with the demographic and
psychological characteristics of defined adopter groups using the Technology
Adoption Life Cycle (TALC) model.
Figure 22 Diffusion of innovations Source: Thakur, 2008 (pp 11)
Shown as a classical normal distribution curve in Figure 22, the TALC suggests
that the first set of people to adopt a new technology are called innovators -
usually more educated, prosperous and risk oriented. This is followed by early
adopters - often young and also educated. Next on the curve are the early and
late majority- conservatives, older and less educated. And finally, laggards- very
conservative, old and least educated (Elliot, 2006).
With low education and literacy levels in any society, ERPSs adoption might
struggle to “cross the chasm”, a term used by Moore (1993) to describe the
27
tipping point, where technology can either become entrenched or disappear from
the market space due to non-adoption (Thakur, 2008) .
Numerous theories and models have been developed to explain information

systems from a social psychology perspective. Researches undertaken on ICT
have identified user attitudes plus human factors as notable vehicles affecting the
success of information system adoption, (Rice and Adyn, 1991; BIS, 2012;
Tucker, 2012).
Take for instance, the Technology Acceptance Model (TAM)—an individual’s

intention and actual use of a technology solution is influenced by its perceived
usefulness and perceived ease of use, noting the later informs the former (Davis,
1989; Dillon and Morris, 1996; Tella, 2012).
Figure 23 Technology Adoption Model
TAM in summation argues, actual use is ultimately a function of a user’s

perception of the ease and usefulness characteristics of a particular technology.
Although well grounded (Marchewka, Liu and Kostiwa, 2007), the TAM does not
encompass other external determinants of payment system adoption such as
security, confidentiality, control, efficiency and trust (Reid and Levy, 2008;
Schepers and Wetzels 2007) as it was developed to provide a basic account of the
drivers of computer software acceptance in a broad-based context (Davis, 1989;
Plouffe et al. 2001).
28
Stressing this point, Salancik & Pfeffer (1978) with the Social Information
Processing Model (SIPM), posit that external variables such as opinions,
information and behaviours of others can affect a user’s perception and thus
acceptance or rejection of technology which is more applicable in the ERPS
context.
The theory of reasoned action (TRA), which has wider applications, will be more
appropriate to understanding how user attitudes and beliefs can affect ERPS
technology adoption decisions where exchange of money is involved.
With origins in social psychology, the TRA defines connections between beliefs,
norms, attitudes, behavioural intention and actual behaviour (Fishbein & Ajzen,
1975; Hennessey, 2012).
Figure 24 Theory of Reasoned Action Source: Abrazhevich, 2001
TRA postulates, an individual’s actual behaviour is driven by behavioural

intentions which are a function of an individual's attitude—positive or negative
feelings about actioning a behaviour, its assessment and, desirability of resultant
consequences (Liker and Sindi 1997) and subjective norms—perception of
whether people important to the individual think the behaviour should be
performed (Terry and O’Leary 2011). A limitation exists as attitudes and norms
are often reframed interchangeably (Eagly and Chaiken 1993).
In summation, the TRA can be enhanced with the view that user perceptions of
ICT can be determined through objective characteristics of technology, alongside
human factors and interaction with other concerned parties.
29
Going by the user emphasis of this paper, ERPS characteristics which could
determine user attitudes, behaviours and intentions need to be identified, which
leads us to section 2.4.1.
2.4.2 ERPS Characteristics as Determinants of User Acceptance

Earlier attempts have been made to characterise ERPS’s in the works of
Medvinsky and Neuman (1995), Lynch and Lindquist (1996) and Wayner (1997).
These studies have focused on the technical aspects leaving out user related
considerations (Abrazhevich 2001b). In congruence with the user emphasis, the
researcher has identified characteristics summarised as follows:
CHARACTERISTIC DESCRIPTION RELATED LITERATURE

Need of users to protect their privacy, Abrazhevich,2004
CONFIDENTIALITY identity and personal information Sadeghi & Schneider, 2001
against data exploitation.

Extent to which ERPS instruments are Medvinsky & Neuman, 1995
ACCEPTABILITY accepted for face to face and online Humphrey, D. B. and Hancock,
D. (1997)
transactions
System’s ability to process small and Low, Maxemchuk and Paul, 1994
COST BIS, 2012, Humphrey et al 2001
micropayments, absent high
transaction costs
A payment system is interoperable if Abrazhevich, 2004
INTEROPERABILITY its use is not exclusive to a service

provider. E.g. bank ATM accepts
other bank customer’s card.
RELIABILITY The smooth running of payment Medvinsky and Neuman, 1995

Guttmann, 2003
infrastructure. e.g. speed of processing
Resistance of payment system to CPSS, 1996;
Sadeghi & Schneider, 2001
attacks in the Internet and physical
Lynch and Lundquist,1996
SECURITY environment. E.g. protection of Asokans et al., 1997
payment details from hacker assaults
and PIN shield on POS
TRUST Degree of customers’ confidence that Wierzbicki, 2008
Efendioglu 2005
30
their money and personal information Abrazhevich, 2004

will be safe, and that all parties
involved will not act against users’
interests when adopting ERPS in
societies
Ease of use and friendliness i.e. not ISO 9241, 1996
USABILITY Lynch & Lundquist, 1996
sophisticated or complex
BIS, 2012
Table 4 ERPS Characteristics Source: Author design
By investigating and ranking these characteristics, an understanding of those

characteristics of high importance, which ultimately influence user acceptance and
thus, adoption in retail transactions in Nigeria can be identified and cross-analysed
against existing ERPS infrastructural frameworks and preparations of relevant
authorities in mitigating risks to consumers. Moving on, we explore briefly, the
mechanism of electronic retail payments.
31
2.5 Mechanism of Electronic Retail Payment Systems

Differences exist in organisational structures across countries, however, ERPSs
typically include three integrated systems (see figure 25 below): Transaction,
clearing, and settlement systems (CPSS 2004).
Figure 25 Organisation of electronic retail payment systems Source: Bank of Canada, 2003
Figure 26 illustrates the universal process of a retail payment and the direction of
information and funds through the transactions, clearing and settlement systems.
Figure 26 Electronic retail payment processes. Source: Author modified: Bank of Canada 2003
32
When customers decide to pay, information about their identity, ability to pay etc.
are passed en route seller’s bank to buyers’ as shown by processes 1 and 2.
Through the Automated Clearing House (ACH) in process 3, customer payment is
initiated as in 4. Interbank fund settlement 5, channelled via the central bank is
then initiated, completing the transaction with transfer of settlement information
6, confirming transaction with banks.
Operators and overseers of Inter-institution clearing and settlement systems need

to ensure that such systems are sufficiently robust in terms of institutional and
operational arrangements, risk management and settlement procedures (BIS,
2004)
Volume of Internally processed information is dependent on the level of clearing

and transaction system integration (BIS 2006). Where these systems are
centralised and standardised, it reduces the amount of data processing amongst
participating institutions (receiving and paying), making settlement quicker and
more cost effective (BIS 2008).
SWIFT, a member-owned cooperative with headquarters in Belgium is involved

in the secure exchange of proprietary data while ensuring its confidentiality and
integrity. Over 10,000 financial institutions and corporations in 212 countries
engage SWIFT services to exchange millions of standardised financial messages
(www.swift.com.). The deployment of SWIFT‘s infrastructure by a country is
deemed as a benchmark when assessing its clearing and settlement systems
(PSDG 2010).
Talking benchmarks, we shall now proceed to key out international frameworks

for the measurement and assessment of a country’s ERPS’s infrastructure,
viewing guidelines and critical success factors recommended by authorities in the
field.
33
2.6 International Retail Payments System Frameworks And

Guidelines
The World Bank plays an extensive role in the development of payment systems
through the Financial and Private Sector Development Vice presidency (World
Bank 2012). Leveraging on a network of over 150 relevant institutions in the
arena of payment systems, the World Bank has engaged in supporting payment
system reforms and providing bespoke advice, to name a few.
The Core Principles for Systematically Important Payment Systems (CPSIPS)

suggest 10 characteristics that all SIPS should satisfy. Relevant guidelines for
consumers are identified in excerpts as follows:
I – The system should have a well-founded legal basis under all relevant
jurisdictions
IX – The system should have objective and publicly disclosed criteria for
participation, which permit fair and open access.
VIII – The system should provide a means of making payments, which is practical
for its users and efficient for the economy.
VII – The system should ensure a high degree of security and operational
reliability and should have contingency arrangements for timely completion of
daily processing.
34
2.6.1 Payment Systems Development Group (PSDG)

The PSDG is at the centre of an international network, whose main objective is to
support countries to reform payments, remittances and securities settlement
systems (PSDG 2010). Figure 27 below depicts its position within the overall
framework for modernising payment systems worldwide.
Figure 27 Payment System Development Group Framework Source: World Bank, 2011.
The PSDG specifies a number of public policy objectives that need to guide the
policies and actions of national authorities in countries with under-developed
retail payments systems. In 2010, the document “Measuring Payments Systems
development” presented measurement methodologies for national payment
systems viz:
1. Legal and regulatory Framework

2. Retail payments system
3. Payment systems oversight function and cooperation.
The exercise aims at furnishing a broad view of the level of development of

identified components of a countries payment systems, with the intention to
providing countries with tools to measure their development scored as high;
medium-high; medium-low and low.
35
1 Legal And Regulatory Framework (APPENDIX A1)

Assessing the robustness of a country’s legal framework based on two
perspectives,
i) The specific payment system concepts covered by existing laws
ii) Legal powers of the Central Bank to oversee payment systems
2 Retail Payments System (APPENDIX A2)

Also based on two perspectives, evaluates the depth of payments system use,
i) The deployment of infrastructure to process retail payment instruments
and key policy decisions that have an impact on safety and soundness of
services provided.
ii) The efficiency and extensiveness of cashless payment instrument adoption
and availability of a variety of payment instruments
3 Payment Systems Oversight Function and Co-operation (APPENDIX A3)

This indicator focuses on the enabling environment to perform oversight
functions based on four aspects,
i) Organisational arrangements for oversight function
ii) Clarity in the objective of oversight function
iii) Cooperation with other authorities
iv) Cooperation with other stakeholders
It is important to note, country-specific considerations due to local and

environmental (e.g. physical and social) conditions are not reflected in the
components measured. For this reason the author adopted the SADC scanning
perspective. (Discussed further in 2.6.3)
36
2.6.2 Committee on Payment and Settlement Systems (CPSS)

Formerly established in 1990 under the aegis of the Bank of International
Settlement (BIS), its foundational study was of ICT matters and preparation of the
“Red Book” intended to report settlement issues such as retail payment and
electronic money issues among others (BIS 2002).
In its May 2012 report “Innovations in Retail Payment Systems”, it identifies how
individuals’ behavior towards technology adaptation can be explained by the
following four factors:
1. The peculiarities of specific payment instruments.

2. Demographic factors: age, education, income level.
3. Transaction characteristics: transaction amount, type of goods and
location.
4. Financial incentives: transaction charges, discounts and reward
programmes.
These factors have been considered in the design of the research questionnaires
(APPENDIX B) aimed at understanding relationships between payment methods
adopted by respondents in their light of these factorial characteristics.
37
2.6.3 Southern African Development Community (SADC)

The SADC, an inter-governmental association of 15 southern African countries, in
1996 launched the SADC Payment System Project. This was to assist member
countries define domestic payment strategies and development plans.
The “Guide to Developing a Strategic Framework for Payment System

Modernisation”, intended as a set of broad guidelines on National Payment
systems (NPS) issues in the African context was published. It considered
continent specific challenges such as lack of modern telecommunication
infrastructure and technical know-how (Ngcobo and Herselman 2007, Zulu 2006).
Its focuses are based on a three dimensional model of NPS modernisation viz:
Strategic Process, NPS Perspectives and the Support Structure as describes by
Figure 28 below
Figure 28 NPS MODEL source: SADC, 2002

38
Viewed from many important angles, an existing NPS can be analysed taking
into consideration the following NPS perspectives (SADC, 2002). See Table5.
PERSPECTIVE COSIDERATION COMMENTARY

Size, Population, Education and
 Country demographics
Political Stability
ENVIRONMENTAL Communication, Transportation,
 Physical Infrastructure
Electricity
 Geographic spread of commerce Spread and link of commercial centers
 Economic consideration Needs of sectors
ECONOMIC  Monetary policy and credit Link between monetary policy and
policy consideration NPS
INSTITUTIONAL  Stakeholder Roles and responsibilities
 Businesses Practices and Business climate
BUSINESS procedure
 Security Fraud, Money laundering
 Legal Framework Scope, Robustness,
LEGAL
 Institutional Arrangement Deficiencies, Effects
 Risk Identification Quantified, Monitoring,
RISK
 Risk Management Contingencies, Reporting
 Communications network Sophistication, Support
 Applications Efficiency, Skills availability
TECHNOLOGICAL
 Development and Deployment of Approach
technology
 Cost of transaction processing Agreed pricing,
FINANCIAL
price
Table 5: NPS Perspective Source: Author Design
For the purpose of this research, highlighted components of the NPS

Perspectives Model are applied in a stocktaking exercise to identify
infrastructural challenges facing electronic retail payment systems adoption in
Nigeria; doing so will help guide research findings and thus, inform some of
the analysis and recommendations of this paper.
39
3. Research Methodology
Chapter two attempted to review related literature extensively. In this chapter,
this paper’s methodological settings are described. Based on the Research Onion
(Saunders et al. 2009), this chapter highlights the research purpose, philosophy,
approach and strategy underlying the choice of data collection as well as the
analysis techniques adopted, justifying each in the light of relevance to research.
Below is a diagram of the Research Onion.
Figure 29 The research ‘onion’ Source: © Saunders et al 2008
3.1 Research Purpose

Three types of research purposes exist in business management (Saunders et al
2008) i.e. descriptive, exploratory and explanatory research. Descriptive research
attempts to produce a representation of persons, events and situations (Robson
2002:59) while exploratory proposes to assess a phenomenon in a new light.
Finally, explanatory research, which focuses on explaining the inter-relationship
between variables of a problem (ibid).
40
This paper attempts to describe consumers’ acceptance of ERPSs by identifying

factors which explain their intentions to adopt e-payment mediums in retail
transactions in the light of existing infrastructural challenges. In congruence with
the thrust of this paper (section 1.3), the purpose is both descriptive and
explanatory.
3.2 Pragmatism Philosophy

Acknowledging the view of Johnson and Clark (2006), it isn’t merely about a
research being philosophically informed, but how well a researcher reflects upon
philosophical choices and defends them in relation to other adoptable alternatives.
Research philosophy concerns the development and nature of knowledge through

two major thought lines, each containing significant differences which shape
assumptions of the world and thus, our research thought process.
The first, Ontology, concerned with the nature of reality, has two views–
Objectivism, depicting the perspective that social actors exist externally in reality
of social phenomena, while Subjectivitism posits, social phenomena are a function
of perceptions and consequential actions of social actors involved. Epistemology
on the other hand pertains to constituents of acceptable knowledge in a field of
study.
Auguste Comet, the 19th century French philosopher, was the first to state that just
as other subjects of scientific inquiry, society could be analysed empirically
(William and Baiche 2001, p203). To this end, social researchers have often
employed systems of methods from natural science in analysis and interpretation
of social science studies, with well grounded procedures established overtime
(Sun, 2010).
Since these debates are in terms of philosophy choice between Positivist - natural
scientists inclined towards theory linked observable social reality (Remenyi et al.
1998:32) and Interpretivist - advocates of differences in human roles as social
41
actors, affecting outcomes of social reality, the researcher believes choosing one
position is impracticable simply because the most important determinants of this
research are the varied research questions and one single view lacks sufficiency
for all research objectives involved.
Findings and recommendations of this study are based on insights sought from
various perspectives in a continuum like cycle (Tashakkori and Teddlie 1998).
Take for instance user acceptance, the emphasis is on quantifiable observations
that lend themselves to statistical analysis (Saunders et al, 2008). While the
positivist philosophy might suffice, understanding infrastructural constraints on
the other hand requires both quantitative and qualitative analysis of available
secondary information.
More so, this research takes a cue from the philosophy concerned with questions
of existence of objects independent of knowledge called Realism. The type
applicable here is Critical Realism which holds, knowledge of reality is a
consequence of social conditioning (technological, economic, demographic etc.)
and cannot be understood independently of social actors (consumers, regulators,
banks, etc) (Dobson 2002). Even where all supporting infrastructure required were
to exist for an efficient ERPS, without its acceptance and thus adoption it will
prove a futile effort.
Another point is the Pragmatist’s applicability to a multi level study as is the case
in this research. By identifying roles and interrelations of the social actors
(consumers, regulators and Government) and social conditions involved, the
research will host a wide array of key considerations to inform research
recommendations.
For these reasons, the Pragmatism philosophy is most appropriate. The summary
table below further highlights the researcher’s choice criteria to achieve a frame
work for the research.
42
CHOICE CRITERIA Positivist Realism Interpritivism Pragmatism

Research question orientation
- - - ✔
Multi level study consideration - ✔ - ✔
Internal v External External Varied External Multiple
Objective v Subjective Objective Objective Subjective Multiple
General focus Theory based Context based Reality based All

Partly
Observable Phenomena (data) Restricted Partly open Open
Restricted
Independence v Dependence Partly

Independent Multiple Multiple
(social factors) dependent
Table 6 Pragmatist Philosophy Source: Author Design
3.3 Mixed Approach

The theory adopted by a research determines its approach (Saunders et al., 2008).
There are two approaches viz Inductive - building theory and Deductive – testing
theory, with both having unique emphasis as describe below:
Emphasis Inductive Deductive
Principle Social Science Natural Science
Context Research based Between variables
Focus Data to Theory Theory to Data
Data Qualitative Quantitative
Researcher’s independence? NO YES
Generalisability NO YES
Approach Flexible Structure Highly Structured
Table 1 Approach emphasis Source: Author Design
Deduction involves the development of a theory which is subjected to a controlled

test, where an allowance is made for anticipating and predicting the occurrence of
a phenomenon (Collis and Hussey 2003).
43
According to Robson (2002), the first stage in a deductive research is to deduce a

hypothesis. With regards user acceptance and thus adoption of ERPSs, the
researcher argues that in addition the perceived ease of use and perceived
usefulness, alongside other social influences like social beliefs and attitudes.
Consumer views concerning security, trust, cost and interoperability, etc. could be
responsible, noting the views of Ovia (2002) and Nwokocha (2009) in section 2.2.
Hence, aspects of ERPSs which could influence user attitudes, behaviours and
intent to adopt ERPS need to be identified and weighted.
A deductive approach will be applied to key out ERPS characteristics as drivers of

behavioural attitude to facilitate understanding drivers of ERPS’s use. Matters like
the level of technological, legal and environmental infrastructure are evaluated
adopting the SADC framework as critical success factors. The inductive approach
is applied here for its flexibility.
3.4 Action Research Strategy

The Action Research strategy is most applicable. Unlike the case study,
experiment or survey, it focuses on research in action as against about action
(Coghlan and Brannick 2005). This emphasises the purpose of this research i.e.
understanding user acceptance through physical infrastructure constraints
militating against ERPSs adoption as a result of policy changes in Nigeria
Action
Choice criteria Experiment Survey Case Study Ethnography Archival
Research
Change
✔
Orientation
Time horizon ✔
Stakeholder
✔
Involvement
Iterative ✔
Table 2 Strategy Criteria Source: Author Design

44
Other issues include the change focus and iterative cycle it affords. Data and
information need be continually and cyclically evaluated as information on policy
and actions are constantly updated by regulatory stakeholders.
3.5 Mixed-Model Choices

As earlier discussed, the positivist approach naturally leans towards quantitative
research methods to test research hypothesis. They usually employ statistical
analysis procedures and numeric data collection techniques like questionnaires.
Interpretivist on the contrary, utilises descriptive analysis rooted on the use of
words to present the analysis of social phenomena absent “number crunching”
known as qualitative.
Table 9 highlights main differences.
Quantitative Qualitative
Numbers Words
Static Process
Structured Unstructured
Behavior Meaning
Hard, reliable data Rich, deep data
Table 3 Qualitative v Quantitative Source: Developed from Bryman, Bell 2003, p302
Not only is it perfectly possible to combine approaches within the same piece of
research, but…it is often advantageous to do so (Saunders et. al., 2003). This
noted, if it is satisfactory to combine approaches, then it can be inferred that it is
acceptable to mix and match different research strategies within the different
research approaches (Ray, 2007). Based on Saunders et al (2008), research
choices can be segmented broadly by either mono or multiple methods.
45
Figure 30 Qualitative v Quantitative Source Saunders et al 2008
Choice
Source Variant Data collection Analysis techniques
criteria
Qualitative or Quantitative Qualitative or Quantitative
Mono Mono Mono
Quantitative Quantitative Quantitative

Multi
Qualitative Qualitative Qualitative
Multiple
Method Both Both
Mixed5
Model Both Both
Table 40 Mixed-Model Source: Author Design
The Mixed-model research choice is applied against Mixed-method as it affords a

better opportunity to answer this papers multi faceted research questions. It
combines quantitative and qualitative data collection methods and analysis which
will assist corroborate and contextualize the research findings. For example,
quantitative data on user acceptance are analysed qualitatively.
5
The main difference here is that although mixed method research uses both quantitative and qualitative views,
quantitative data are analysed quantitatively and vice versa whereas, mixed model is interchangeable.
46
3.6 Data Collection and Analysis

There are two major sources of data: Primary - observed or gathered from direct
hands-on experience and Secondary - include raw and summarised primary data
collected for a different purpose by someone else. It is common to combine
methods to substantiate research results.
The nature of this paper’s questions has informed the choice of data collection.
For user acceptance, quantitative primary data are collected through Self-
administered questionnaires and Multiple-source secondary data for analysis of
existing infrastructure in line with the philosophy, approach and strategy of this
paper.
3.6.1 Self-Administered Questionnaires

Choices about types of questionnaires are broadly based on whether it is
completed by respondent or by researcher on the basis of respondent’s answers.
Self-administered questionnaires are designed so respondents can follow
instructions (Robson, 2002) and answer at their own pace. The possible
limitations of questionnaires are the potential of partial completion and non-
response (Saunders et al 2008). Further justification of researcher’s choice are
summarised below:
Choice criteria Self –administered Interviewer-administered

Cost Cheaper Expensive
Respondents convenience More convenient Not as convenient
Ease of Administration Relatively easy Quite complex
Large sample size compatibility YES NO
Geographic dispersion Compatible Complex
Collection time Shorter Takes longer
Table 11 Questionnaire choice criteria Source: Author Design
47
The research questionnaires have three parts.

(i) Personal information (demographics);
(ii) Payment instruments preference ranking and frequency of use
information
(iii) Questions on each ERPS characteristic ranked on a five-point Likert-
style responses ranged from 1 – “very important”; 2 – “quite
important”, 3 – neutral, 4 – “quite unimportant”, 5– “not important at
all”
Hypothesised drivers of user acceptance are ERPS’s features which are:

 Relevant for user behaviour, attitudes and experience when used.
 Significant signifiers of ERPSs’ characteristics to end users.
 Key for ERPSs to function.
 Important for social influence and hence use
To ensure questionnaires cover all relevant aspects of research questions, the

researcher divided the instrument into three parts mentioned earlier. The questions
were steered by the guidelines contained in the “innovations in e-payment” report
of the BIS also noted in section 2.6.2. Using various questioning styles such as,
categorizing and the liker-style ranking at different sections was to ensure
accuracy of responses sought. This was aimed at limiting the potential of boring
the respondents with similar styled questions. Pilot runs of questionnaires with
close friends also helped control quality.
3.6.2 Multiple-Source Secondary Data

The major advantage of this source of data is that it combines both documentary
(e.g. memo and circulars of CBN) and survey (e.g. World Bank Global Payment
Survey 2010) secondary data sources. Since qualitative and quantitative secondary
data form the basis of infrastructure challenge analysis, data in forms of surveys,
reports, and circulars which are available from websites of the IMF, BIS, CPSS,
World Bank, and CBN, and so on, were used. With time, cost and quality
48
considerations, it was impossible for the researcher to gain such insight otherwise.
The main risk of using secondary data is that its original objectives might not
completely fit the current research problem as it was intended for another study
(Ghauri et al., 1995). To improve the quality and reliability of data sought, data
types were gathered from reputable organizations with well defined
methodologies.
3.6.3 Stratified Random Sampling

A stratified random probabilistic technique enabled researcher touch a
representative sample by dividing the population according to mutually exclusive
homogenous subgroups (Marshall, 1999) based on IT literacy as opposed to
convenience sampling technique. This is to ensure the sampling frame is accurate
(Fink, 2003a) as its normal that people with good IT skills tend to adopt
technology quicker (Dobson, 2006). The alternative is the cluster sampling
technique where the surveyed population is based on identified clusters if they
exist (Tryfos, 1996). These clusters do not exist in our population.
Due to resource constraints, the law of large numbers (Janssen 1998; Judd 1985)
is not applied here because a sample of 50 respondents is targeted. By
apportioning target response to 60% bank branch and 40% online, the researcher
believes doing so, though based on judgment will improve statistical inference
(Casella 2008).
3.6.4 Quantitative and Qualitative Data Analysis

The purpose of analysing data is to get answers by linking information from a
pool of data (Yin, 2003). Using IBM SPSS v216, quantitative data collected from
questionnaires and other sources were analysed using descriptive statistics such as
percentages and frequencies, to summerise, identify and describe (Cameron and
Trivedi 2009) relationships between variables (Agresti and Finlay, 2009). To
6
Software package used for statistical analysis.
49
provide visual clues, graphs, tables and infographics7 were designed to aid
reader’s comprehension.
ERPS infrastructure was analysed combining deductive and inductive approaches,

applying Template analysis based on the SADC NPS perspective model.
According to King (2004), a template is a list of categories which represent the
themes from data that have been collected. Qualitative data on legal and retail
payment frameworks were analysed deductively based on the PSDG methodology
for measurement, ranking various components from low through high. The
researcher after extensive findings believes this is the most applicable approach to
answering research questions.
3.7 Access
Access was requested through various Nigerian internet forums where members
were approached well in advance. Towards improving response rates, they were
asked to indicate their interest by communicating their e-mail addresses. Because
of poor internet connection in Nigeria, paper-based questionnaires were e-mailed
to interested respondents. Some questionnaires were completed through branches
of two busy commercial banks in Lagos Nigeria, GT Bank and Ecobank. Access
to banks was negotiated leveraging of researcher’s professional network of
contacts. To allay respondents concerns, using simple sentences, the researcher
explained the purpose of the study stressing confidentiality and anonymity
assuring. Secondary information is available for general public use on the internet
and had been confirmed not to require any special form of authority restricting its
use.
3.8 Ethical Considerations

Ethics are the ‘norms or standards of behavior that guide moral choices about our
behavior and our relationships with others (Cooper and schindler, 2008: 34).
Research ethics therefore informs a researcher’s behavior concerning every
7
“Graphic visual representations of information, data and knowledge” (Ibid)
50
component of a research work—from the research topic through design, analysis

and final write up (Easterby-Smith et al. 2008).
The researcher consulted wide to ascertain strict ethical standards were

maintained. Appendix XV of the LJMU dissertation guide provides an exhaustive
list of regulations on research conduct, which the researcher adhered to. For
example by acknowledging thoughts and ideas of others through referencing and
avoiding unauthorised collusion with any persons.
Other ethical considerations complied to were confidentially, controlling access to

questionnaires respondents’ data and installing standard firewall softwares against
breach. It was also appropriate to engage survey participants with courtesy,
consideration and due care in accordance to the ACCA’s code of ethics for
members. For example, household income instead of personal was requested as
well as using the phrase “education above” instead of “highest qualification”.
3.9 Credibility of Research Design

As expressed by Raimond (1993:55, cited by Saunders et al, 2008:156)
“How do I know?”
This brought to the researcher’s thought the concept of Bounded Rationality —
the idea that in decision making, an individual’s rationality is constrained by
information availability, cognitive capacity and time (Elster, 1983). Due to these
reasons it is not known what the “best” research design should be. Nonetheless,
the researcher has attempted to adopt a pattern which best suits the purpose of this
paper. Aimed at reducing the probability of reaching the wrong conclusions, the
researcher emphasised validity, reliability and generalisability as thus,
3.9.1 Validity
Validity asks questions about the proposed measure of a research and what is
actually measured (Yin, 2003). The researcher ensured data relevant to research
areas were specifically targeted. This explains the mixed-model choice for data
51
sourcing and analysis, with both primary and secondary data utilisation. To reduce
subjectivity in judgements, views of key international players in the ERPS arena
were sought. The SADC scanning perspective was applied for African related
considerations, assuring contextual evaluation. Validity could have been higher if
interviews with members of the “cash-less” project team were conducted.
To reduce the probability of low validity, it was important to focus on payment

systems offered by banks for its omnipresence. This is considering the low growth
stage of ERPS in Nigeria. These had a direct impact on survey respondents,
enabling them to fully understand and complete questionnaires. In all, the
researcher believes the validity of the research design is very reasonable.
3.9.2 Reliability
The “How” questions here relate to the probability of the same research design
yielding consistent results under similar research conditions (Easterby-Smith et al
2008:109) The researcher believes the measures of legal and payments system
oversight will be consistent, because international benchmarks based on experts’
methodologies were adopted.
Different interpretations may yet be given to other infrastructural considerations.

For example, taking a cue from the management expert Handy (1993), who opines
that how things are done amongst a select persons is relative to the collection of
thoughts and ideas they hold. In the payments landscape, every nation has a
business culture which informs the way transactions are conducted and in
summation, “what might be good for the goose might not suffice for the gander”
(old English saying).
All the same, the researcher, through extensive research has attempted to ensure
the research design is reliable, especially with the questionnaire analysis. Paying
particular attention to data inputting helped reduced errors, whilst maintaining an
independent position cut down bias in survey analysis.
52
3.9.3 Generalisability
Also referred to as external validity, is concerned with “How” findings may be
applicable or super imposed on other research settings. As earlier noted, payment
procedures vary in countries. The design approach used in the infrastructure
analysis of retail ERPS in Nigeria will be applicable to developing nations,
especially members of the African community who witness similar infrastructural
challenges. Survey questions on the other hand might not be as generalisable,
owing to its tailored design for the Nigerian setting.
53
4&5
Findings, Analysis and Discussions
The previous chapter, research methodology, set the sail and boundaries for
research findings. This section presents empirical data and analysis as follow: (4)
A descriptive analysis of survey results to characterise data collected and (5) A
report on ERPS related Infrastructure.
4. User Survey Of ERPSs

The survey attempted to identify user perceptions of various characteristics of
ERPSs as drivers for decisions to use them or otherwise. It has to be
acknowledged however, that the evaluation, although informative, is only an
abridged version of the entire picture of ERPS adoption in Nigeria. This is mainly
because the survey does not include the circumstances in which transactions are
made. Payments initiated through any channel would have unique and specific
conditions influencing an individual’s beliefs, attitudes, intentions and actual
behaviour to adopt a payment technology as noted by Fishbein & Ajzen (1975)
and Hennessey (2012).
This section answers research question 2, i.e. what ERPS characteristics drive the
Nigerian consumer’s behaviour towards adoption.
4.1 Demographics And Descriptive Statistics

Of the 50 questionnaires received, 4 were rejected due to inconsistencies in
respondents’ answers. 73.9% had used e-payments before and 45.7% use ERPS at
least twice a week. Demographically, respondents were quite balanced with
52.2% female. Survey participants between 18 and 55 make up 78% of sample,
representing the current active age structure in Nigeria. Most online respondents
54
were graduates, constituting the highest number of survey population. 47.8% of

respondents were employed, with the rest being mainly self employed and
students.
In the “Innovations in Retail Payment Systems” report of the CPSS (2.6.2), it

identifies how individuals’ behavior towards technology adaptation can be
explained by demographic factors such as age, education and income level. Here
we cross analyse these factors with research findings to identify adoption trends.
4.1.1 Age
Participants between 18 and 45, who might be considered more ICT savvy,
represent 56%.
Figure 31 Age demographics Source: Author design
Although respondents from every age group have used ERPSs, findings seem to
affirm the TALC (Section 2.4) where Rogers (1983), submits the innovators and
55
early adopters who embrace ICT more quickly are usually young and educated.
Here, 92% of respondents aged 18 to 45 have used ERPS. This notion is further
stressed by the frequency of weekly use where the same age groups use ERPSs
many times a week.
4.1.2 Education
Respondents were asked to indicate their highest education level as junior, senior
secondary, graduate and post graduate levels. 41.3% of respondents were senior
secondary. However, 54.5% are graduate level and above.
Figure 32 Education demographics Source: Author design

56
Looking at education and frequency of weekly use, it is not so hitting education

has a causal relationship with ERPS use. However, graduates surveyed tend to use
ERPS many times a week.
4.1.3 Income And Employment

76.1% of respondents are engaged in one form of employment or the other. On
the income side, 45.8% of females have monthly house hold incomes above
N100k ($630; GBP 393), same for 68% of male.
Figure 33 Income and employment demographics Source: Author design
Reverting to the TALC’s perspective, individuals with higher income and better
employment status are more inclined to ERPS adoption, especially use of direct
57
debits for payee initiated payments as noted by Kwast and kennickell, (1997) and
Mantel (2000). From figure 33 however, cash remains the most preferred payment
medium across all income and employment levels. Most prominent is that all self
employed respondents use cash. This is probably as a result of the cash dependent
nature of the informal economy in Nigeria.
Now that we have analysed demographic trends affecting ERPS adoption, it is

clear age and, partially education have a holding on ERPS adoption In Nigeria.
Income and employment nonetheless do not. The following section evaluates
survey opinions of ERPS’s characteristics as determinants of user acceptance.
4.2 User Perceptions of ERPSs Characteristics

This section of the survey is based on the TRA (2.4), which identifies that a user’s
actual behavior to adopt a technology or otherwise, is a function of positive or
negative feelings perceived about the desirability of resultant consequences. Since
the TRA infers that ICT features alongside interactions with other concerned
parties can serve as an indication for ERPS’s adoption, opinions of respondents
were assessed with liker-style questions ranging from 1 – “very important”; 2 –
“quite important”, 3 – neutral, 4 – “quite unimportant” and 5 – “not important at
all”. Notions on personal decisions on selected features were sought from “Yes”,
“Maybe” and “Never” responses.
Figure 30, Survey Highlights, provides a snapshot of key results from the
conducted survey. Not surprisingly Security ranked highest with 100% saying it
was Very Important. Another characteristic of importance was Trust, where in
line with the Social Information Processing Model (SIPM) (Salancik & Pfeffer
1978), 80% maintained they would rely on opinion of others to use ERPS in retail
transactions. Cost also scored high. 80% of respondents said they will avoid
ERPS use if charges were too high.
Reliability (the smooth running of payment infrastructure) also ranked 72% very
important. 60% of respondents indicate they would avoid ERPSs where absent.
58
This is a very important characteristic for users. The head of the NIBSS, Mr.
Adebisi Shonubi specifically identified GPRS network downtime as a major
hurdle for POS entrenchment (Punch Newspaper 2012).
59
Figure 34 Survey Highlight

60
Interestingly, being rewarded for using ERPSs as recommended by the CPSS

ranked low on the order (60% Unimportant). This could be as a result of the high
natured caliber of survey respondents. This however might imply the educated
and financially advantaged Nigerian ERPS users are not prepared to be wooed by
incentive schemes which encourage its use. It is logical nonetheless, that
economically deprived members of the Nigerian community will welcome such
incentives.
Interoperability and Acceptability which rank below 70% quite important are
areas which users take seriously. As awareness and deployment of ERPS
instruments begin to improve, these are bound to become key areas of concern to
paying parties. Regulators should ensure paying systems are interconnected and
interoperable.
Figure 35 Interoperability and Acceptability Source: Author design
All the more, respondents with secondary school education level and higher as
well as all age groups do consider reliability (efficiency in payment
infrastructure) as very important. Where payment instruments are not believed to
be functional, 60% of users indicate they will avoid use of electronic payments.
In closing, the low level of awareness of ERPS’s functionality was highlighted by

the fact that 54% of respondents were not mindful their personal details were
stored by merchants and banks. Further, Confidentiality was 65% unimportant;
this might be a pointer as to users’ naivety of electronic fraud. Personal details are
now traded in black markets on the internet. It is important extensive awareness of
61
fraud risks are communicated by the regulators. Without such drives, there exists
a risk to squander the already marred level of trust in the Nigerian business
climate.
62
5. NPS Stocktaking Report

Through a stocktaking of ERPS related infrastructure in Nigeria, question 3, what
are infrastructural constraints to implementing efficient ERPSs for retail
transactions will be answered. As part of this section also, answering the “what
has been done by Nigerian stakeholders” question is summarily addressed. By
identifying infrastructure constraints, implications for user acceptance will be
better understood.
This stocktaking procedure involves information collection about the present state
of ERPS related infrastructure in Nigeria, benchmarked selectively against
Sweden. The NPS perspective model (section 2.6.3) guides information gathering.
A diagnosis of the strengths, weaknesses, opportunities and threats8 (SWOT) of
the current NPS is then undertaken.
5.1 Introduction
According to the BIS (2002) Retail payment systems and instruments are
significant contributors to the broader effectiveness and constancy of the financial
system, in particular to user assurance and to the functionality of mercantilism.
Moreover, efficient and safe use of ERPS as a channel of exchange in transactions
is an essential function of the medium and a foundation of the trust held in it by
people. For these reasons, the efficiency and safety of retail payments are of
interest to all stakeholders involved.
An efficient and modern payment system is mutually related with economic

growth, which is a fundamental facilitator for economic development. According
to the CBN (2011), the “Cash-less” strategy was introduced for a variety of
notable reasons, including: driving development and modernisation of the NPS in
line with Nigeria’s vision 2020 goal of being amongst the top twenty economies
of the world by the year 2020. And also to abbreviate the expense of banking
8
A structured management tool to summerise Strengths, Weaknesses, Opportunities and Threats
of a person, place or situation (Humphrey, 2005)
63
related services (including credit considerations) and push forth financial

inclusion by making available more effective payment options and extensive
reach.
Assortments of gains are anticipated to be derived by various stakeholders from

the entrenchment of ERPSs. For consumers, these have as part: increased
convenience; more service options; cheaper access to banking services (absent
branch presence) reduced risk of cash-related crimes; and access to credit. For
businesses, it promises: reduced revenue leakage; faster access to finance; and
reduced cash management costs. The Government is also considered through
improved tax revenue; extensive financial inclusion; and ultimately increased
economic development.
A country’s payment system acts as a catalyst for the flow of financial resources
(Gholami et.al, 2010; IFC, 2011). This can be enhanced with Joseph
Schumpeter’s (1934) observation that ‘we see all around us in real life, faulty
ropes as against steel hawsers’. In His Theory of Economic Development he
identified how economic logic prevails over the technological, relevant today in
emerging economies as clumsy money economies in lieu of efficient electronic
payment structures.
Sadeghi & Schneider (2001) identify that the modernisation process of a NPS
presents a major challenge to policy makers and specialists’ alike, as it involves
tasks ranging from major strategic plans, new legislation, unified standards, plus
development of new technology among others.
It’s also been noted, many emerging economies lack the threshold infrastructure
and banking sophistication to leapfrog from basic, to state of the art payment
systems (Listfield and Montes-Negret, 1994). To this end, it is prescribed,
modernisation projects should first, fix key problems such as education,
awareness and technological infrastructure etc. This should be followed by
incremental updating of the current system to meet basic standards of timeliness,
64
reliability and security after which long term advancements can be considered
(BIS 2006).
While most contributors, commentators and stakeholders in Nigeria and the
international community unanimously welcome the innovation of a modern
electronic payment arrangement, there are major concerns about the degree of
planning and implementation (Asaolu et al. 2011) and ultimately the level of
physical infrastructure available to support the “Cash-less” Nigeria drive. We
shall continue to examine existing infrastructure and institutional arrangements,
beginning with environmental considerations.
5.2 Environmental
This perspective describes the environment within which retail payment systems
are provided. It highlights the needs to be met and also sets the stage for
identifying constraints.
5.2.1 Country Demographics

This component evaluates the characteristics of a country and its population.
Size 923,768 km2

Population 162,471,000
Urban Population 50% total population
0-14 years: 40.9% Male 32m ;Female 31m
Age structure
15-64 years: 55.9% Male 44m;Female 43m
65 years and over: 3.1% Male 2m;Female 3m

Literacy 68%
Unemployment 21%
Political Stability High-risk
Table 12 Country demographics Source: World Bank, 2012: CIA, 2012; NPC, 2012
Officially called the Federal Republic of Nigeria, the country is modelled around
USA, and so, governed by a federal system of administration with 36 States, a
65
Federal Capital Territory (FCT) and 774 local government areas. The capital city
is Abuja. Nigeria is strategically located on 923,768 km2 of land area in West
Africa.
Nigeria is a culturally diverse nation constituting three ethnolinguistic groups –

Ibo, Hausa and Yoruba, represented by over 250 ethnic classifications, often with
differentiated languages. Although the official language is English, according to
the Nigerian Bureau of Statistics literacy survey (2010), only 57.9% and 71.6% of
the population are literate in English and other languages respectively. This
consideration might have a holding on usability (non-complexity in use)
characteristics of payment systems design, bearing in mind 60% of survey
respondents maintain they will avoid ERPS if complicated.
Further, Nigeria is a country of very religious people who are in the author’s
opinion frequently biased along religious ideologies. For example, the
introduction of Islamic banking in 2010 saw some members of the Christian
community averre marginalisation (BBC world service, 2010). This phenomenon
could impair user acceptance of ERPSs because the Hausa Muslims of the North –
predominantly education disadvantaged (NBS, 2010), might perceive the “Cash-
less” policy to be against their religious interest.
As earlier noted, the country is still very fragile, which means political stability is
ranked high-risk by the CIA. The Nigerian political environment has witnessed
abrupt changes over time. When succeeding administrations assume office, there
has always been a trend of scrapping earlier initiatives, with new ones started
afresh. The implication for a NPS overhaul is such that regulators and
governments need to be committed to a policy change to sustain “buy-in” from
users and stakeholders alike. This is important for ERPS “crossing the chasm”
(Moore, 1999).
With a rapidly growing population, it is estimated by the World Bank that

younger citizens constitute a large proportion of the Nigerian population. As
66
survey results highlight these young people adopt ERPS quicker and more often,
an advantage presents for user acceptance nationwide.
5.2.2 Physical Infrastructure

This considers the stock of basic facilities and capital equipment needed for the
functioning of a modern retail payment system initiative. CPSIPS VIII implies that
retail payments require a reliable underlying financial, communications and other
types of infrastructure. To reduce risks of loss to paying parties, it is also
important a national identification system for individuals exist.
Communication
GSM 103,653,380
Subscribers as at Sep, 2012 CDMA 3,239,370
Fixed/Landline 474,345
Population covered by mobile cellular network 80%

Internet users 24, 895,584
693.0
International Internet bandwidth (Mbps)
Broadband download speed (mbps) 2.30

Fixed broadband Internet subscribers 67,776
Table 13 Communication facts Source: NCC, 2012; World Bank 2012; ITU, 2012
ICT is one of, if not the fundamental catalysts for new or improved payment
services and, resultantly, the new business models which usher innovations in to
the market. Since the telecommunication reforms in 2001, the numbers of active
subscribers have constantly been on the increase. As can be deduced from table 13
above, it is obvious there is an advantage for retail payment particularly for P2P
transactions.
Globally, the speedy development in ICT has contributed to retail payments’

spread over the past decade, for example, the introduction of new payment
methods aimed particularly at e-business and online P2P transactions. The level of
awareness of the internet benefits has also improved with over 24 million
67
Nigerian users in 2011. This growing awareness creates an enabling environment

for e-commerce and other related payment platforms. Although it has to be
mentioned, the cost of fixed broad band internet is considerable high and the
download speeds still slow. These will certainly have consequences for the speed
of POS medium.
In Nigeria, deeper penetration of mobile phones and smartphones, together with

the reducing costs of associated infrastructure has the potential to turn mobile
phones into new payment channels both for executing traditional payments (e.g.
credit transfers) and for entirely new payment schemes.
Electricity
Unit
Installed power generation capacity MW/million people 38.1
Power consumption kWh/capita 121.6
Power outages Day/year 320.0
Firms’ reliance on own generator % 61.0
Urban access to electricity % population 85.0
Rural access to electricity % population 31.0
Growth access to electricity % population/year 0.6
Table 14 Electricity facts Source: Derived from AICD electricity database
According to the International Bank for Reconstruction and Development (IBRD),

the Doing Business in Nigeria report (2012), shows Nigeria stands at 176 in the
ranking of 183 economies on the ease of getting electricity. Nigerian businesses’
biggest reported problem is unreliable power supply. About 83 percent of all
managers surveyed considered electricity outages to be a serious problem—more
than any other constraint. Firms of all sizes, traversing states and sectors, report
average power outages equivalent to 8 hours per day.
As a result, the percentage of Nigerian firms owning their own backup generators
is 61 percent. No comparator country experiences such severe business losses
68
related to the power supply. From table 14, it is glaring ERPSs will suffer as a
result of such harsh electricity conditions.
Taking cognisance of Nigeria’s power challenges, Dr Tunde Lemo, Deputy

Governor in charge of operations, CBN, mentioned in a newspaper interview that
the POS machines designed for the “Cash-less” initiative have specifications
peculiar to Nigeria. Saying, “All POS terminals will have a minimum battery life
span of 24 hours, while many will do 48 hours with no charge. They also come
with backup batteries and car chargers as appropriate to address the power
challenge.”
Transportation
Unit
Paved road density km/1000 km2 of arable land 174.1
Unpaved road density km/1000 km2 of arable land 94.2
Paved road traffic Average annual daily traffic 1,772.4
Paved network condition % in good or fair condition 67.4
Unpaved network condition % in good or fair condition 32.9
Perceived transport quality % firms identifying roads as
29.9
major business constraint
Table 15 Transportation facts Source: Derived from the AICD national database
Transportation infrastructure like electricity is also appalling; users need to get

around efficiently when engaging in business transactions. Although most
measures contained in table 15 concern roads, the Nigerian rail network and
aviation sector also require urgent attention. In addition, maintenance and
management of ERPS infrastructure requires technicians and engineers are able to
attend to systems failure and interruptions at the earliest possible time. Without
efficient transportation infrastructure, the reliability of payment systems might be
unattainable.
ERPSs are increasingly being used by transportation agencies for the collection of
highway tolls, journey fares (e.g. Oyster cards in London) and parking fees. This
69
presents an opportunity for entrenchment of ERPSs in Nigeria. The BRT9

transportation system in Lagos State has the appropriate structure to host journey
fare payment technology very effectively using Near Field Communication
technology (Discussed further in recommendations, 6)
5.3 Institutional
Institutional perspectives aims at identifying the players engaged in a NPS
modernisation project, highlighting their roles and responsibilities. CPSIPS VII
implies that retail payment systems should be supported by appropriate
governance and risk management practices.
5.3.1 FGN
Through the payment system vision 20:20, the FGN is committed to entrenching
ERPS use nationwide. The responsibilities of the government towards creating an
enabling environment for electronic ERPSs are enormous. These include ensuring
relevant physical infrastructure are in place, through the National Assembly
amend and provide appropriate legislation as well as enforcement of rights of
participating parties in retail transactions to name a few.
With regards electricity, the vertical and horizontal unbundling of the state
controlled Electricity Company into 18 subsidiaries now sees private sector
engagement in power generation, transmission and distribution. Although
dividends have yet to accrue, electricity conditions are set to improve in the
coming years. Electricity generation at this time has peaked 4300 from 2300 mega
watts in 2008 (Nnaji, 2012).
The Payments System Management Bill and Financial System Ombudsman Bill
are before the National Assembly for enactment. Evidence Act is also undergoing
review (CBN, 2012). Also, the Nigeria Identity Management Commission
9
The Lagos Bus Rapid Transit System is a bus rapid transit system in Lagos State, Nigeria
(Wikipedia, 2012).
70
(NIMC) is presently implementing unique bank customers’ identifiers within the

scope of the on-going National Identity Number project (NIMC, 2010).
5.3.2 CBN
The CBN is responsible for overall control and administration of the
government’s monetary and financial sector policies as provided by the CBN Act
of 2007.
Excerpts of Section 47: Payment and Settlement Systems of the CBN Act are
described hereunder,
(2).The Bank shall continue to promote and facilitate the development of efficient
and effective systems for the settlement of transactions (including the
development of ERPS). Appointment of other Bank as agents for payment and
settlement systems
(3). The Bank shall have power to prescribe rules and regulations for the efficient
Operation of all clearing and settlement systems.
(4).In furtherance of the objective of a sound financial system and

notwithstanding the provisions of the Evidence Act, any physical or electronic
record of transactions that is in a format approved by the Bank shall constitute
sufficient proof of such transactions
Implementing the retail payments system development agenda requires public

authorities, in particular the central bank, to take an active role in coordinating and
catalysing action from all the stakeholders. Besides the provision of the CBN Act
2007, CPSIPS IX (2.6.2) lays emphasis on fostering a competitive market
environment within the retail payment industry, balanced between cooperation
and competition.
71
The CBN has issued a policy circular to pattern the proper level of
interoperability of POS and ATM infrastructure. With 45% of survey
respondents in favour of debit cards for POS transactions, this could improve
ERPS adoption. Problems with standard settings might persist, as 4 manufacturers
have been selected for the provision of POS terminals.
Further, CBN mobile payment guidelines do not permit Mobile Network

Operators to offer mobile money services, either independently or as lead
syndicate partners. Market competition or contestability is the main route to
maintaining efficiency in dynamic retail payments markets (BIS, 2003); these
decisions among other reasons potentially restrict competition in the industry. The
main implication here is that the M-PESA model earlier described cannot be
implemented in Nigeria.
5.3.3 DMB
DMB’s are appointed by the CBN as agents for payment and settlement systems
in Nigeria. These Banks are the principal providers of accounts, instruments and
services directly to end users (BIS, 2002). The provision of payment cards and
internet banking portals form some of their complementary services to customers.
They are also responsible for issuing POS terminals to business clients.
Branches however are in short supply with a ratio of 23000:1; this is a major
hurdle for the “Cash-less” initiative. Low Interconnectivity of branches will also
reduce the speed of EFTs. Those most affected by this are rural inhabitants where
transfer incomes from contacts employed in cities are commonplace. Recently,
however, non-banks have begun to provide certain retail payment services to
augment the banks provisions even though their market shares are still low.
No of DMB’s 24
No of Branches 3190
Banking density 63%
Bank ratio 23000:1
72
Branch Interconnectivity 30%

Table 16 DMB facts Source: Nigerian Banks financial transparency report, 2011
5.3.4 Non-Banks
As Noted by the BIS (2012), the role of non-banks in retail payment innovations
has increased significantly, owing in part to the growing use of innovative
technology that allows non-banks to compete in areas such as mobile and internet
payments which are not yet dominated by banks. Non-bank payment providers are
set to play an increasingly important part of the Nigerian payments landscape in
coming years, especially in rural areas.
Further, the growing function as “consolidators” (intermediaries between payers,

payee and their account holding banks) and payment portals providers in EBPP
arrangements and internet shopping, of payment acquirers in ATM and debit card
networks shorten the line between the direct provision of retail payment services
to end users than in the past. Non-banks are also involved in provision of cross-
border instruments, provision of payment security services as well as providing
outsourcing services such as processing, accounting, the operation of data centres
and the operation of ATM and POS terminals (BIS, 2012; Tucker, 2012).
Towards the “Cash-less” initiative, the Nigerian postal services, NIPOST

developed a strategic alliance with NETPOST10 to modernise connectivity
between post office branches nationwide to cater for users, especially rural
dwellers. According to a Universal Postal Union (UPU) study, postal operators
provide some 1.5 billion people worldwide with access to basic financial services
such as payments, money transfers, and savings.
With only 3955 branches, a national coverage of 20% would not seem to achieve
much considering the Nigerian population. The UPU recommends 1 post office
for an average of 6000 persons. In line with this recommendation, Nigeria should
have at least 27,000 postal outlets. Postal establishments in Nigeria consist of
10
"NETPOST is a joint venture between NIPOST and two privates sector firms in Nigeria
73
General Post Offices, Head Post offices, Departmental Post Offices, Sub-Post
Offices, Postal Agencies and mobile Post Offices.
Another weakness is the negative effect on e-shopping, the non- availability of a

robust national mail system increases the cost of delivering items purchased
online. As a consequence, the growth of e-commerce might be affected. Besides
e-commerce, user monthly bills and other electronic retail payment
correspondence which are statutory requirements to improve trust and
accountability cannot be delivered effectively. Alternative arrangements should be
set in motion in this regard, towards user protection.
More, in the desire to extend banking services to a wider segment of Nigerians, 14

Mobile payment service providers were licensed in 2011. With the ubiquity and
increasing acceptability of mobile telephony, financial inclusion of the unbanked
seems possible. M-payment mediums facilitate instant payments to end users,
allowing settlement of scheme providers in a T+1 cycle; meaning PSP’s funds are
settled on the second working day.
Minimum m-payment technology standards are also specified by the CBN to

ensure users confidentiality, security, and reliability to name a few. It is
important, however, that KYC11 procedures are appropriate for each user class to
reduce fraud-risks and money laundering.
11
Know your client
74
Figure 36 Non-Banks and trust Source: Author design

An important user consideration for non-bank service providers is trust. Survey
analysis revealed most respondents who believe opinion of others on security is
“very important” and have used ERPSs in transactions assert that they “might”
trust non-banks. It is essential that this trust once earned should be guarded, if
non-bank payment services are to diffuse across-the-board of users.
5.3.5 Telecommunications Networks

The Telcos’ are responsible for providing a secure communication path based on
the technological standards stipulated by the CBN. Agreements have been reached
between the CBN and Telco networks to provide dedicated channels for payment
related data traffic. This is to improve uptime and interconnectivity of payment
infrastructure.
As earlier mentioned Mobile Network Operators are not permitted to offer mobile
money services, either independently or as lead syndicate partners. Established
Networks have the capacity to provide a strong platform for innovations, but are
often also favourably positioned to create entry barriers which hinder competition
and innovation (BIS, 2012). These entry barriers could be either direct imposition
of access restrictions or through other indirect means, take for example by
adopting standards and principles that are difficult or costly for other innovative
payment options to take on (BIS,2003).
75
While the precise reason(s) for the CBN’s decision is not known, it might be to
foster competitiveness within the electronic retail payment industry, by allowing
the market grow unhindered, absent dominance by established players.
5.3.6 Switching Companies

Switching companies facilitate confidential exchange of proprietary data and
standardised financial messages among paying parties in Nigeria. There are
currently 9 licensed switching companies with the NIBSS serving as a central
aggregator for all electronic transactions. Transaction switching companies
facilitate the processing of online ATM transactions, online POS transactions and
e-purse transactions. In doing this, they interconnect parties to card scheme
operators' network, document transactions and generate reports to member banks
including transactions settlement reports, amongst other activities (CBN, 2012).
As identified from the World Bank Global Payment System Survey 2010, 90% of
Nigerian banks are connected to the SWIFT infrastructure, which improves cross-
border payments.
It is mentioned by the BIS (2012) that a degree of cooperation is crucial among

market players in certain infrastructure arrangements particularly those executing
payment clearing and settlement (as identified in section 2.5 mechanism of
ERPSs), where certain features of a public service nature are provided. The
consequence for users here is whether this cooperation translates into advances in
overall market efficiency and safety in the ever complex and dynamic ERPS
markets.
76
5.4 Legal And Oversight Landscape

This perspective translates the legal context in which the NPS operates. CPSIPS I
stresses retail payment systems should be supported by a sound, predictable and
proportionate legal and regulatory framework. It also recommends to relevant
regulatory authorities the need to exercise effective oversight over retail payment
markets and to consider proactive interventions where appropriate.
Irrespective of the particular technical or institutional features of ERPSs, complex

contractual and legal relationships exist between consumers, retailers, issuers and
service operators. With this noted, the legal framework specifies the rights and
obligations of engaged parties and institutions of a retail payment arrangement. A
key consideration is whether these rights and obligations considered are well
defined and transparent. The issue here is primarily concerned with the effect of
legal and regulatory provisions on retail ERPS and instruments, noting legal
provisions often lag in keeping up with market development, complemented by
various damaging effects—especially for competition, innovation and ultimately
user protection.
Such negative uncertainnesses impair efficiency as well as infix legal risk, not
least because a user’s notion perceives an ERPS as legally unsound can have a
holding on user trust and thus, acceptance. Say for example issues could come up
involving liability in the event of fraud, or the default by one or more participating
parties. The question arises as to what extent existing laws and central bank
regulations apply to electronic transactions.
In the oversight arena, regulatory activities can also stifle market development and
innovation through reduced competition. It is important for central banks to
ensure there is a well managed balance between oversight and enablement of a
competitive retail payments environment in the interest of end users. Many
actions often have well grounded rationales, however, differentiations in legal
provisions for banks and non-banks can impose differential costs and risk profiles,
77
distorting user incentives to adopt a particular ERPS instrument i.e. whether

instruments available represent the least cost and risk profile to intending users.
The Nigerian legal and oversight framework is assessed by the PSDG’s

methodology for measuring payment systems development and benchmarked
against Sweden as earlier mentioned (APPENDIX A1&A3).
NIGERIA SWEDEN
Legal Framework
1. Key legal concepts covered by the existing legal framework
2 8
2.Central Bank Legal Powers to Oversee Payment Systems
2 2
LEVEL OF DEVELOPMENT Medium-low High
Oversight Scoring
1. Organizational Arrangements for Payment System Oversight 6 6
2. Objectives of Payment System Oversight 2 2
3. Cooperation with other relevant Authorities 1 2
4. Cooperation with other stakeholders 2 2
5. Scope of payment system oversight 1 4
LEVEL OF DEVELOPMENT High High

Table 17 Legal and oversight scoring Source: Author design
Results (table 17) show the legal framework is scored medium-low and high for
Sweden. Although noted previously that certain laws are being reviewed by the
Nigerian National Assembly, investigations reveal electronic evidence is not
admissible in Nigerian courts, the laws do not provide consumer protection for
retail payment services, no competition laws exists to provide fair and contestable
retail payment markets, and finally no payment system specific laws are yet in
place.
Whilst S.47(3) of the CBN Act provides that the Bank shall have power to
prescribe rules and regulations for the efficient operation of all clearing and
settlement systems, an impending risk exists, as contractual and legal
relationships are not expressly defined with consumers being most disadvantaged.
78
On the oversight spectrum, a High score is attained. Although favourable,

attention needs to be paid to the scope of payment system oversight. This might
not be an issue now; however, it does have implications for the efficiency of the
payment landscape in the long run. We go on to explore the technological
infrastructure.
5.5 Technological
This defines the technological infrastructures that support the payment system.
CPSIPS VIII implies that retail payments require a reliable underlying
communications infrastructure
In section 4.2.2, we explored communications infrastructure from the users-end.

Here we look at the supporting infrastructure on which payment services are
established.
5.5.1 Infrastructure and Application
i) NIGCOMSAT-1R
Nigerian communication satellite successfully launched, orbited and tested
in December 2011 to provide a robust ICT infrastructure.
ii) GLOBACOM-1
Is a 9800km submarine communications cable system between Nigeria
and the UK. It became operational in 2011 with a minimum capacity of
640 Gbit/s, now advertised as 2.5Tbit/s. This initiative was launched by
Globacom Telecommunications and Main One Cable Company—both
private companies—to provide 99.9% reliability and high speed data
connectivity.
iii) GALAXY BACKBONE

Is an ISO IEC 27001:2005 certified data security infrastructure owned by
the FGN. It assures security of public data and information.
79
While the stock of teleco infrastructure might seem impressive, a good a structure
is only as good as those who manage it. Africa remains at an early stage of ICT
development as affirmed by the ICT Development Index (IDI) 2010. Technical
knowledge and man power remain very scarce and expensive in Nigeria and if the
industry were to attract, reward and retain necessitated skills internationally, the
current risky political climate might serve as a deterrent.
In addition, the underwater cable system, even where at optimum performance,

lacks a National Transmission Backbone to transmit digital links to sub-regional
and regional carriers in the hinterlands for end-user consumption.
Approaches of these technologies though commendable, will take time for full
optimisation and until then, users will continue to suffer slow payments and
downtimes with detrimental implications for trust and reliability.
5.5.2 Development and Deployment of Technology

This section is also assessed by the PSDG’s methodology (APPENDIX A2).
NIGERIA SWEDEN
Infrastructure and Policy
1. Deployment of POS infrastructure 0 4
2. Interoperability of Infrastructure -2 0
Extensiveness and Inherent Efficiency of Retail Payment Instruments Used
1. Extensiveness of usage of cashless instruments 1 4
2. Efficiency of payment instruments used 0 4
LEVEL OF DEVELOPMENT low High

Table 18 development and deployment scoring Source: Author design
Findings here seem to say it all about development and deployment of technology
(Table 18). And for this reason, the researcher proceeds to identify actions of
80
regulators towards mitigating identified deficiencies. Contained in this section are

excerpts of newspaper interviews and articles from relevant stakeholders.
Head, Shared Services at the CBN, Mr Chidi Umeano was quoted as saying:
"Banks have continued to roll out more innovative electronic payment platforms
to meet customers’ expectations. Currently, banks have deployed about 100,000
POS terminals and before the end of the year, if things go as planned, about
150,000 POS terminals will have been deployed”.
He added, “The aim is to penetrate Urban and semi urban areas with mass
market appeal while communicating in local languages, create and generate
excitements for everyone to embrace cashless transactions, stimulate interests and
intent to embrace e-banking and raise awareness at the grass roots level for the
new policy”
Umeano further added “The CBN was set to acquire a new fraud prevention
system, payments system oversight and anti-fraud system, to tackle fraud in the
electronic payment (e-payment) system”
(Source: www.thisdayonline.com, 11.June. 2012)
Meanwhile, the Association of Corporate Affairs Managers of Banks (ACAMB)

has urged merchants, traders, supermarket operators, and filling station owners to
hurry to their banks and collect POS terminals to facilitate e-payments
nationwide. It assured bank customers and other related parties to avail
themselves of the friendly environment Nigerian banks have provided to promote
businesses and personal banking experience. ACAMB’s President, Tunde
Shofowora said.
(Source: www.vanguardngr.com, 12.June. 2012)

81
At a stakeholder roundtable conference in Lagos, Omokehinde Ojomuyide,

Country Manager, West Africa, MasterCard Worldwide
“MasterCard envisions a world beyond cash, a goal that mirrors the Cashless
Policy conceptualized by the CBN,”
“We support this policy that aims to modernise the country’s payment systems”
“More Nigerian businesses are accepting MasterCard payment cards than ever
before, and we acknowledge the support of the country’s financial institutions
who have committed to educating their customers about the security and
convenience of accepting cashless payments,” says Ojomuyide.
“MasterCard will continue to create an environment for discussions with

financial institutions and merchants at our regular training workshops.”
(Source: www.vanguardngr.com, 19.October. 2012)
In addition, 14 Mobile payment operators earlier mentioned have recorded 35,971

transactions valued at $1.4m in January 2012. Nigerian analysts expect this to
grow as awareness increase. However, a MasterCard Mobile Payment Readiness
Index (MPRI) reveals otherwise, scoring Nigeria 31.3 which is said to be below
world averages. The MPRI identifies Canada, Singapore, USA and Kenya as
better prepared. It says Singapore has the highest score at 45.0
(Source: www.Punchng.com, 4.June. 2012)
From these views, it is apparent stakeholders are committed to the “Cash-less”

policy’s success; however, infrastructural bottlenecks identified thus far, remain
major hurdles. From this point we shall proceed to analyse the Business and
Finance perspectives.
82
5.6 Business Environment

This perspective considers current and future business trends in ERPSs. CPSIPS
VII connotes retail payment markets should be transparent, have adequate
protection for paying parties interests and be cost effective.
The importance of creating an enabling competitive environment cannot be over

emphasised. To guarantee consumers get sufficient, relevant and appropriate
“value for money”, competitive forces have to be in place. The CBN has the
power to licence PSPs through its oversight functions, albeit, it is important
barriers to entry and thus innovation, among other standards are set to protect
interests of paying parties. One other issue is whether the pricing structure
effectively apportions price to risk and rewards from payment instruments sought
by consumers.
As for security of cards, Nigerian banks became CHIP+PIN compliant in 2010

and arrangements are said to be in place for Biometric authorisation from 2015.
This development is welcome taking the high fraud-risks environment which
Nigeria presents (Agbasi et al, 2010; Olorisade and Azeez, 2012). Fraud-risks in
Nigeria are internationally acknowledged; the UKTI, in its Doing Business in
Nigeria guide advises British nationals not to use their credit cards at specific
locations in Nigeria.
This noted, most other ERPS instruments face huge risks (some identified in
2.3.2), take for instance, Mobile phone hacking12( Adepoju and Alhassan, 2010;
Obot, et al 2012) and phishing13(Lau, et al 2004; Antiphishing Workgroup 2011)
– Nigerian consumers are increasingly losing money to international and local
fraud syndicates, owing to illiteracy and naivety of ERPSs regulations. Awareness
of risks inherent in their preferred payment choices is necessary to build trust and
confidence in the ERPSs.
12
Someone who accesses a computer system by circumventing its security arrangements (Wikipedia, 2012)
13Phishing is a fraudulent attempt to acquire personal sensitive information by masquerading as a trustworthy

entity in an electronic communication (ibid)
83
5.7 Financial
This perspective identifies financial considerations associated with ERPSs.
The current payment regime makes POS payments free for consumers which is
good as most survey respondents indicate they will avoid ERPS use where costs
are high. However by charging merchants 1.25% of the transaction value, these
merchants will logically prefer cash based transactions to avoid additional
business related costs. Although benefits to merchants include reduce cash
handling costs, reduced risk of robbery and loss of cash through pilferage and fire,
nonetheless, noting the view of Ovia (2009), merchants will prefer traditional cash
based systems where proper incentives are absent.
More even, the settlement cycle for merchants is T+1, just as for mobile payment
operators. While this favours PSPs due to their relatively strong liquidity
positions, the average Nigerian business faces tight liquidity constraints as early
sales proceeds are often used to set the business in motion for the day. This comes
in line with facts such as low GNI earlier stated, as well as the need to fuel their
backup power generators every day. Factoring in POS merchants’ liquidity need is
important to the success of the “Cash-less” project. Regardless merchant’s needs
are not considered as part of this research, it is a fact they are users too.
As detailed stocking and analysis have been completed, a strengths, weaknesses,

opportunities and threats summary of the current NPS is undertaken using a
SWOT grid. This will ensure the final section of the discursive, “Conclusions and
recommendations: implications for user acceptance” is substantially concluded.
84
5.8 SWOTs Grid

STRENGHTS WEAKNESSES
1. Telecommunications penetration 1. Deployment of technology

2. Technology Infrastructure 2. Legal framework
3. Oversight function 3. Electricity infrastructure
4. Commitment of Institutions 4. High risk business environment
5. Young population 5. High business liquidity constraints
6. Zero charges for consumers 6. Low consumer protection
7. Low Banking density and interconnectivity
8. Technical skills shortage
9. Narrow post office network
10. Insufficient technical skills
11. Low awareness among citizenry
12. Religious and cultural beliefs
13. Non-integration of national database
14. Big-bang approach
OPPORTUNITY THREATS
1. Financial inclusion for the unbanked 1. Low literacy rates

2. Drive economic development 2. High Unemployment
3. Reduce cash dependence 3. Political instability
4. Employment creation 4. Lack of Trust
5. Low awareness levels
Table 19 Swots Grid Source: Author design
Now that the grid is populated, it is obvious the current NPS is faced with a lot of
weaknesses. Strengths, although partially healthy, would require a lot more
commitment from regulatory authorities and participating stakeholders alike to
minimise the impact of weaknesses and threats.
85
6. Conclusions And Recommendations

: Implications for User Acceptance
In setting out the aims, strategy and design of the NPS, the goal is to ensure the
retail payment systems are available without interruption, meet extensively all
users' needs, and functions at minimum risk and sensible cost (SADC 2002, BIS
2006,ECB 2008)
This section attempts to conclude findings from previous chapters of this paper.
As depicted by Figure 6 (Literature map), this phase fuses earlier findings to
answer question 6 (i.e. what else can be done?) This represents research
recommendations.
This paper sought to answer the following research questions:
1. What are electronic retail payment systems? (Chapter 2)

2. What types of ERPSs exist in Nigeria? (Chapter 2)
3. What ERPS characteristics drive the Nigerian consumer’s behaviour
towards its adoption? (Chapter 4)
4. What are the infrastructural constraints to implementing efficient ERPS in
Nigeria? (Chapter 5)
5. Have any arrangements been made by Nigerian stakeholders to contain
these challenges? (Chapter 5)
6. What else can be done? (Chapter 6)
In chapter 2, ERPSs was defined; classified and identified based on both

operational and product characteristics. The survey (Chapter 4) helped provide a
picture of ERPS characteristics significant to users. In hierarchical order, these are
Trust, Security, Cost, Reliability and Usability. It was discovered, whereas, that
arrangements have been made by regulators to ensure Interoperability and
Acceptability, therefore releasing them off our list. Confidentiality and Reward
86
are least rated. Added, the young population are quicker to adopt ERPSs, there is
low awareness amongst users of the benefits, risks and functionality of ERPSs
and, as at the time of the survey, October, 2012, cash continues to be the most
preferred payment medium.
Although these characteristics do not have an authoritative appreciation on the

design of ERPSs or its instruments, all the same, they could aid understanding of
user acceptance in general. As stated, the “Cash-less” project is ongoing, and
while the researcher has attempted to constantly update research findings, it is
admitted regardless, some of the facts adopted in infrastructure analysis might
have changed. SWOTs Grid (5.8) attempts to answer question 4 of the research
paper.
Discursive first considers users requirements (i.e. for safety, trust, reliability,
usability, etc.) and in the light of infrastructure constraints discovered, enumerates
action plans in the form of recommendations (i.e. what else can be done?).
6.1 TRUST
Confidence in retail payment systems is the foundation of trust which is one of the
major drivers of user acceptance (Lee et al. 2010; Adepoju and Alhassan, 2010).
Wierzbicki (2010) defines trust as the relationship between a “trustor” and a
“trustee” in a context. This definition is enhanced by Efendioglu (2005), who goes
further that trust goes beyond direct paying parties but to all institutional
stakeholders involved in the ERPS process. All stakeholders thence, have a role
to play towards building trust in the payment system.
They need to ensure users believe:

i. The Legal framework to be in their favour.
ii. That risks inherent in the business climate have been significantly reduced
iii. That their rights will be expediently exercised in the occurrence of fraud
iv. That they (Institutional) care.
87
6.2 SECURITY
Security can be viewed from the legal and oversight, technological, Institutional
as well as business perspectives. Users need to be convinced that the designs of
payment instruments are resistant to any form of breaches (Pennanen et al., 2008;
Susanto and Zo, 2011; Pan and Zinkhan, 2006), since inadequate security,
whether perceived or real will undermine public confidence in the ERPSs.
. For its high importance, like trust, stakeholders must ensure:

i. Security arrangements are in line with changing technological
advancements; these include authentication, integrity, authorisation, and so
on.
ii. Leveraging on the CBN’s oversight powers, DMBs and merchants adhere
to physical safety procedures such as PIN shields at ATMs and POS
iii. There is in place, a flexible regulatory regime which reduces barriers to
innovations in security
iv. The Media reports objectively on system breaches
v. Constant user education on types of fraud, for example how to identify
ATM Skimming devices14
vi. Stricter legislations are in place against ERPS related offences to serve as
a deterrent
vii. Visible law enforcement
6.3 COST
Based on regulatory, technological and institutional perspectives, ERPS’s should
have the ability to process retail payments, absent high transaction costs (Low,
Maxemchuk and Paul 1994, Humphrey et al 2001, BIS 2012). Costs here are two-
fold. One side is for both user and the merchant. The other is for the user alone.
Although transaction costs are free for customers, they notwithstanding, face high
internet broadband costs. More, some DMBs charges high fees for EFTs. On the
merchant’s side, there is a 1.25% charge on every transaction. This presents a
14
Device affixed to an ATM machine which records details of unsuspecting ATM users
88
possibility where the merchants attempt to transfer or avoid these charges, which
will ultimately affect user acceptance.
Regulators need to ensure

i. Payment markets are fair, transparent and contestable to drive competition
and innovation
ii. Through oversight powers, enter arrangements with telecommunication
companies to reduce internet costs
iii. Inter-charge fees among switching companies are kept at the barest
minimum to accommodate only fixed and marginal costs absent abnormal
profits.
iv. Intervention for introducing Straight Through Processing15 (STP) to
reduce merchants liquidity risks
v. Create incentive schemes for merchants and promotions for users
6.4 RELIABILITY AND USABILITY

Reliability relates to the smooth running of payment infrastructure (Min.& LI
2008; Lipson and Fisher 1999; Dawodu and obi 2012) while usability stresses
ease of use and friendliness i.e. not sophisticated or complex (ISO 9241, 1996;
Miyazaki and Fernandez, 2001). These characteristics are grounded on
technological and institutional perspectives. Reliability is particularly dependent
on ICT delivery channels through the internet which bank on efficient electricity
infrastructure. Major operational risks include transmission capacity and
continuity which are a function of the volume of data traffic (BIS, 2005). With the
CBN rolling out approximately 130,000 battery-driven POS systems this year
alone, enforcing earlier described arrangements with telecommunications
companies will remain key critical success factors.
Concerning usability, systems’ design should excogitate the current literacy levels
and English language deficiencies. In another light, the use of POS and Mobile
15
Same day settlements of transaction value
89
payments require basic numeric skills for “Money” which Nigerians humorously
possess in abundance. Integrating local language options as part of systems design
will be advantageous.
6.5 CONFIDENTIALITY AND REWARD

As noted, confidentiality (knowledge of purchases by others) (Olorisade and
Azeez, 2012; Belovin, 2006) and Reward (incentives for ERPS use) (BIS, 2012)
were rated low by users. These characteristics are grounded on institutional and
finance perspectives. Regulators should ensure details of users are protected
against exploit, especially from direct marketing which constitutes a nuisance to
most consumers. As earlier noted adequate incentive schemes should be in place
to encourage merchants’ adoption.
Innovation! Innovation! Innovation!—A case for public transportation

Near field communication is a set of standards for devices to establish radio
communication with each other by bringing them to centimetre proximity (NFC
forum, 2011). NFC builds upon RFID systems by allowing two-way
communication between endpoints (Nosowitz, 2011). NFC can be used in
contactless payment systems similar to those currently used in electronic bus
ticket smartcards. According to the BIS (2012), since 1990, public transport
companies began implementing smartcard bus ticketing for its convenience and
efficiency. The first was the Octopus Card in Hong Kong, 1997 next was
SmarTrip in Washington DC 1999, fast forward to 2003 with London’s Oyster
Card. Other world cities like Seoul and Rotterdam have joined in its use.
Figure 37 Innovations in smartcard technology Source: www.google.com

90
An opportunity presents here for the Lagos BRT as earlier mentioned,

transportation smart cards can be integrated with individuals’ national database
ID, payment details and medical records amongst others. This will increase
convenience for users, save lives in emergencies, whilst in the process reduce
crime.
Other important recommendations include:

a. Targeting the youth population through incentives schemes
b. Furtherance of awareness campaigns (communicating progresses achieved
through pre-recorded voice calls and bulk sms will assure user “buy-in”)
c. Creating more user-institution platforms for interaction (Setting up a
dedicated internet radio channel for training and dialogue will improve
outreach)
d. Engaging religious institutions as active stakeholders of the “cash-less”
initiative since they play an increasingly important role in the Nigerian
society.
e. Increased publications and communication to ensure transparency in
payment markets, and
f. Improved ERPSs data availability to encourage analysis and discussions
On a final reflection, this study settles on the future of ERPSs Globally. In a

decade, Biometric authentication of transactions will be wide spread (Mordini,
2012). Regulatory authorities in Nigeria, peculiarly the Nigerian Identity
Management Commission (NIMC) should therefore ensure adherence to industry
standards of compliance, regarding unauthorised access to sensitive data. This
would protect Nigerian citizens’ personal information against abuse in the future.
This study managed to reveal:

1. There is a slow but growing trend in electronic payment systems adoption
in Nigeria which creates opportunities for investment, innovation and
employment.
2. ERPSs characteristics of importance in the Nigerian e-payment landscape.
91
3. The Big-bang approach is a limitation to the successful implementation of

the “cash-less” project. Bearing in mind the BIS (2006) recommendation –
modernisation projects should first, fix key problems such as education,
awareness and technological infrastructure etc. This should be followed by
incremental updating of the current system to meet basic standards of
timeliness, reliability and security after which long term advancements can
be considered.
The objectives of this research have been achieved by answering stated research
questions. Future work will seek to understand and explore the bigger picture of
Electronic payment systems, including implications for Nigerian businesses and
the government.
92
7.Researcher’s Reflections on Learning

This final chapter provides the opportunity to return to the research work and,
look back on the cognitive operations engaged by the researcher through the
process of this research work. With a threefold focus, this chapter identifies (1)
what has been learnt, (2) how the learning has occurred and finally, (3) how
lessons learnt will be applied to future endeavors.
7.1 Introduction
The Oxford dictionaries define learning as “the acquisition of knowledge or skills
through study, experience, or being taught”. Rijcke (2012) takes this further,
maintaining, learning is a process that incrementally builds upon and is modeled
by existing knowledge, as against a collection of factual and procedural
knowledge. To sum these definitions up, David Kolb (1984:41), Professor of
Organizational Behavior at Case Western Reserve University posits “learning is
the process whereby knowledge is created through the transformation of
experience. Knowledge results from the combination of grasping experience and
transforming it”.
7.2 What Has Been Learnt?

The more you know, the more you realise you know nothing.
– Socrates (nd)
This saying best describes the researcher’s first lesson through the course this
undertaking. Beginning from the researcher’s topic choice decision, through
research proposal and final write up; the continual process of illumination lead the
researcher to unknown pockets of knowledge alien to the researcher’s world.
In the view of Wertenbroch and Nabeth (2000), we learn from experiences that
allow us to Absorb (read, hear and feel), Do (Activity) and Interact (socialising).
In addition, learning also occurs through reflection—taking time to think, whilst
93
through the process, seeking to connect recent and previous experiences to form a
sound mental schema (Dewey, 1933).
With the need to review and absorb a wide array of literature, the researcher
sought to learn speed reading—a collection of reading techniques directed at
increasing rates of reading without greatly reducing comprehension or retention
(Buzan, 1991). The researcher’s use of language has also improved. Repetitive
learning (Poldrack, 2001) has helped develop researchers grammar, spelling,
knowledge of new words and context of its use. Writing skills for an academic
audience have also been developed.
Besides sharpening existing ICT skills (Activity) such as use of Microsoft Word
and Microsoft Excel, the researcher also learnt how to employ Adobe Photoshop16
(infographics: Figure 34) and SPSS statistics for data analysis and presentation.
Searching skills on the internet have also improved, the researcher found, using
specific words streamline search results, improving quality of information
obtained, as against quantity.
Other areas of learning and improvement include inter-personal skills—tactical

skills in dealing with persons. This was necessary when interacting with survey
respondents, tutors, dissertation supervisor and so on. Effective planning and time
management skills were also polished.
Finally, critical reflection skills—the process of analysing, reconsidering and

questioning experiences within a broad context of issues (Murray and Kujundzic,
2005) have been developed as it is a requirement for a Masters level paper.
16
Advanced software application for graphics design
94
7.3 How Has The Learning Occurred?

Although there is no mutually exclusive way to learn (Constantinidou and Baker,
2002), learning can be summarily based on different styles. Keefe (1979) defines
learning styles as the collection of characteristic cognitive, affective, and
physiological vectors that provide relatively consistent indicators of how a learner
perceives, interacts with, and responds to the learning environment.
Kolb's learning theory lays out four distinguishable learning styles, which are
based on a four-stage learning cycle. These are Concrete experiencing (CE) –
doing something; Reflective observation (RO) – assimilating what happened;
Abstract conceptualisation (AC) – making conclusions and Active
experimentation (AE) – deciding on future action plans.
Figure 37 Kolb learning style Source: Kolb, 1984
Peter Honey and Alan Mumford (1993) describe four distinct styles adopted by
learners. They indicate that most learners often assume more than one of these
styles. Adding, certain learning activities are more suited to particular learning
styles.
These styles are Activist—prefer new challenges, more inclined to group

involvement and prefer hands on approach to learning; Theorist—like to
understand theories behind actions, opting to analyse and synthesise based on
proven concepts and models; Reflectors—learn from activities which permit
observation, thought and review of what has happened and Pragmatist— enjoy
95
trying out “the new”, seek new ways to solve existing problems, practical
approach to learning.
Honey and Mumford (1993), pointed out the connection between Kolb’s model
and theirs stressing there exists more similarities than the differences. This can be
highlighted by the diagram below.
Figure 38 Kolb with Honey and Mumford combined Source: Author Design
Herein is how the learning has taken place:
When the researcher embarked on this academic endeavor, the initial concern was
about the subject being learnt. It however became apparent, that being aware of
the learning methods most applicable to the researcher’s personality and context
of the task being undertaken, were just as important.
Selecting an appropriate learning method is part of a concept called

metalearning—“being aware of and taking control of one’s learning” (Biggs,
1985:55). This awareness made the researcher become a more effective and
efficient learner.
The researcher found that it was important to take the Activist and Reflector stance
in the beginning of this research work; this was to ensure views of earlier
researchers in the field of study were thoroughly understood. By taking a deep
96
plunge into the world of the unknown, the researcher became confused as to the
right direction to follow in the course of the research. Choosing a descriptive topic
title was not easy either, as awareness of new information often steered the paper
in turbulent directions.
After the first researcher-supervisor meeting—about a month from the research

proposal results release, the researcher remained in the dark. The informed need to
break this cycle was the tipping point where critical reflection began to develop.
Awareness of the researcher’s physical environment suddenly grew in importance
as a composite of learning (Balsys, 2011). The researcher from then on ensured all
competing stimuli were mitigated or eliminated. In line with psychologist,
Mihalyi Csikszentmihalyi’s flow theory (2008), the researcher maintained intense
involvement in the dissertation and was able to remain focused for the length of
time needed to achieve constitutive activities within the overall research process
According to Bandura (1977), environments which promote interpersonal

interaction could improve reflection. And so, the researcher sought to engage
every person that bothered to listen with the issue of ERPSs—from discussing e-
payments with Tesco17 sales assistants during transactions; observing the speed of
transaction processing, up to joining online forums where e-payment discussions
are held.
Now equipped with relevant practical information and knowledge, it was time for
the researcher to take a break from the research work and reflect on what had been
done; thinking of relevance of materials held.
After a week’s break, the researcher read through the paper again and the aha!
Moment18 set in—the pragmatist learner was unleashed. The obvious link
between the topic and current need became apparent. Earlier models collected for
evaluation now had their precise functions. It was time to start writing.
17
Retail Super and Hypermarket chain in Europe and Asia
18 A moment of sudden insight or discovery (Oxford Dictionaries)
97
The final journey of reflection had begun when the researcher sat long and quietly
to review details of all supervisor-researcher meetings. The researcher picked up
clues on the right directions to follow by recalling aspects of the research work-in-
progress which interested the supervisor, such as graphical representations. This
informed the need to improve the papers discursive with the aid of diagrammatic
representations among other feedbacks actioned.
7.4 Future Applications of Lessons Learnt

Looking into the future from this moment, the researcher has learnt valuable skills
too numerous to mention, some too abstract to quantify or identify.
In general, being able to think in a multifaceted manner will help in both life and
work engagements. Also, the ability to criticise others’ work, whilst also being
able to contribute own views towards the propagation of new thoughts and ideas
is a skill the researcher will apply to future work and research endeavors. More,
knowledge of researchers unique learning pattern discovered would ensure work
tasks and future research engagements will be completed to higher quality
standards on time.
The ability to relate with a wide array of persons will help improve networking
skills as well as understanding standpoints and opinions of other persons
objectively. Better use of English grammar will improve the quality of literature
to be produced by the researcher. Knowledge of new ICT skills will also not go to
waste, the researcher looks forward to applying the SPSS Statistics software in
undertaking more voluminous and technical analysis in the social science field.
Finally, this undertaken has revealed certain areas of improvement in the

researcher’s skills and knowledge set. By working on these, future engagements
would be better approached.
98
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APPENDICIES
Appendix A1
115
Appendix A2
116
117
Appendix A3
118
119
Appendix B
User Acceptance of e-payment in Nigeria
This survey is being carried out to find out how you feel about the Current CBN
“Cash-less” policy in Nigeria. Please answer the following questions freely. You
cannot be identified from the information provided. This exercise should take
about 5 minutes to complete. Thank you.
Please tick (✓) as appropriate.
1. Are you male? ❑ Female? ❑
2. Is your age between 18-25 ❑ 26-35 ❑ 36-45 ❑
46-55 ❑ 56-65 ❑ 66-70 ❑
3. Are you? Self employed ❑
Employed in public service ❑
Employed in private sector ❑
Unemployed ❑
Student ❑
4. What is your highest education qualification?
Junior Secondary ❑
Senior Secondary level ❑
Under Graduate ❑
Post Graduate ❑
Others ……………………………
120
5. Is your monthly household income above N10, 000 ❑ N50, 000 ❑
N100, 000 ❑N500, 000 ❑ N1m❑
6. Have you used e-payment in retail transactions? Yes ❑ No❑
7. How often do you use e-payment every week? Once ❑ Twice ❑ Many ❑
Never❑
8. Please select your favourite payment mediums (as many)
ATM machine ❑ Cash ❑
Debit Card ❑ E-fund transfer ❑
Credit Card ❑ Internet ❑
POS ❑ Prepaid card ❑
Mobile payment❑
9. From the options in question 8, which is your single most preferred?

………………................
10. Are you aware your transaction details are stored? Yes ❑ No❑
11. Is it important that your financial information is safe? (e.g. Name, account details)
Very important Quite important Neutral Quite unimportant Not important
12. Are you worried that things purchased are known by banks and shops?
121
13. How important is it that one particular e-payment system is generally accepted?
14. For POS transactions, what is your most preferred payment option?
Debit Card❑ Pre-paid Card❑ Mobile payment❑
15. Do you believe money from one payment medium should be easily
transferable to another? Please tick (✓) as appropriate.
Account to Cash Account to Mobile Mobile to Account

Very important
Quite important
Neutral
Quite unimportant
Very unimportant
16. Do you believe you should pay a charge to spend your money?
Yes ❑ No❑
17. Will the charge be an important part of your decision to use e-payment?
18. How important is it to you that every system accepts your preferred e-payment choice?
19. Is it important that e-payment options are always working well?

122
20. Do you consider security when you pay electronically? Yes ❑ No❑
21. Is it important that you use a system which friends and family think is secured?
22. If you believe a payment system is not secure, will you still use it?
Yes ❑ Maybe ❑ Never ❑
23. How important is it that other people trust the systems you choose to pay with?
24. Will you trust payment systems issued by Non-banks?
Yes ❑ Maybe ❑ Never❑
25. If you feel a payment system is not trust worthy, will you still use it?
Yes ❑ Maybe ❑ Never ❑
26. How important is it to you that the current payment systems are not complicated?
27. Where you feel payment method is hard to use, will you still use it?
Yes ❑Maybe ❑ Never ❑
28. Do you believe you should be rewarded when paying electronically?

123
Appendix C
BOX 1: WORLDBANK GUIDELINES FOR DEVELOPING A COMPREHENSIVE RETAIL PAYMENT
STRATEGY
Efficient retail payments systems have a Guideline III: Retail payments should be
significant positive impact on the broader supported by a sound, predictable, non-
economy. There are a number of public discriminatory and proportionate legal and
policy objectives that need to guide the regulatory framework.
policies and actions of national authorities in Guideline IV: Competitive market
countries with under-developed retail conditions should be fostered in the retail
payments systems, the key public policy payments industry, with an appropriate bal-
objectives being: (i) Safety and efficiency; (ii) ance between cooperation and competition
Affordability and ease of access to payment to foster, among other things, the proper
instruments and services; (iii) Availability of level of interoperability in the retail payment
an efficient infrastructure to process infrastructure.
electronic payment instruments; and, iv) Guideline V: Retail payment systems and
Availability of a socially optimal mix of services should be supported by appropriate
payment instruments. governance and risk management practices.
These public policy goals should guide the Guideline VI: Public authorities should
actions of the public authorities, specifically exercise effective oversight over the retail
the central bank, to positively impact the payments market and consider proactive
drivers of retail payments system interventions where appropriate.
development. In this regard, the following six Implementing the retail payments system
guidelines can be used by the central bank to development agenda requires public
develop its national retail payments authorities, in particular the central bank, to
development agenda: take an active role in coordinating and
catalyzing action from all the stakeholders
Guideline I: The market for retail payments including not only retail payments industry
should be transparent, have adequate but also the other corporate and government
protection of payers and payees interests authorities. Creating a national retail
and be cost-effective. payment systems development plan and en-
Guideline II: Retail payments require a trusting its implementation to an energized
reliable underlying financial, National Payments Council (NPC) would
communications and other types of ensure orderly and self-sustaining reforms.
infrastructure; these infrastructures should The key components of an effective plan
be put in place to increase the efficiency of would need to include: (i) stock-taking of
retail payments. These infrastructures current situation; (ii) establishment of
include, at a minimum, interbank electronic internal organizational arrangements; (iii)
funds transfer systems, interbank card development of a co-ordination framework
payment platforms, credit bureaus, data to involve all stakeholders; (iv) development
sharing platforms, interbank real-time gross of a common vision, objectives and
124
settlement systems, reliable communications standards; (v) agreement on actions that

infrastructure and also a national need to be taken; (vi) development of an
identification system for individuals. implementation plan; and, (vii) monitoring
progress.
Source: World Bank
Appendix D
125
126
127

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ELECTRONIC RETAIL PAYMENT SYSTEMS IN NIGERIA

:User Acceptance Through Infrastructure Perspectives

MASTERS OF ARTS IN FINANCIAL MANAGEMENT DECEMBER 2012

This work is dedicated to the Allu 4.

The paper presents a multidimensional analysis of ERPS’s adoption. It evaluates

Findings reveal a low level of awareness of the functionality of ERPSs as well as

In conclusion, this paper presents strategies to improve consumers’ trust in the

Key Words: Electronic payment systems, Electronic retail payment, User

To my Agbèké, my gem of incomputable fortune, here is a BIG thank you.

To Otunba Adeolu Balogun—Mentor Extraordinaire. Thanks for your

My deep appreciation goes to Mr Gavin Brown, Dr Yvonne Morgan, Mr Mike

On a final note, to my Siblings, Good friends and my growing number of Nieces

I love you all.

3. RESEARCH METHODOLOGY ............................................................... 39

3.9 CREDIBILITY OF RESEARCH DESIGN ................................................................. 50

4. USER SURVEY OF ERPSS ....................................................................... 53

APPENDIX A2 DEPLOYMENT SCORING METHODOLOGY ............................................................ 115

Table 2 Product classification

Table 3 Channel classification

Table 4 ERPS Characteristics

Table 5 NPS Perspective

Table 6 Pragmatist Philosophy

Table 7 Approach emphasis

Table 8 Strategy Criteria

Table 9 Qualitative v Quantitative

Table 11 Questionnaire choice criteria

Table 12 Country demographics

Table 13 Communication facts

Table 14 Electricity facts

Table 15 Transportation facts

Table 16 DMB facts

Table 17 Legal and oversight scoring

Table 18 Development and deployment scoring

Table 19 SWOTs Grid

Figure 2 GDP Growth rate

Figure 3 OPEC Share of world crude oil reserves

Figure 4 GNI per capita (US$)

Figure 5 Structure of dissertation.

Figure 6 Literature Map

Figure 7 Global Non-cash Payment Report 2011

Figure 8 Key Global players Currency-In-Circulation

Figure 9 Nigerian cash transaction

Figure 10 World Literacy map 2011

Figure 11 CIC to GDP ratio

Figure 12 CIC per capita

Figure 13 Corruption Perception Index 2011

Figure 14 Internet users (per 100 people)

Figure 15 Mobile cellular subscriptions (per 100 people)

Figure 16 Electric power consumption (kWh per capita)

Figure 17 Cards accepted here sign

Figure 18 Mobile phone transactions

Figure 19 M-PESA transaction in Kenya

Figure 20 POS Transaction

Figure 21 ATM located outside bank

Figure 22 Biometric authentication

Figure 22 Diffusion of innovations

Figure 23 Technology Adoption Model

Figure 24 Theory of Reasoned Action

Figure 25 Organisation of electronic retail payment systems

Figure 26 Electronic retail payment processes.

Figure 27 Payment System Development Group Framework

Figure 28 NPS MODEL

Figure 29 The research ‘onion’