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The study examined the impact of electronic payment system on customer satisfaction in Nigeria. Particularly, the study investigated the extent to which electronic payment systems such as internet banking, mobile banking, ATM and POS system influence customer satisfaction in Nigeria using a case study of students of Redeemers University.

 It can be deduced from the review of literature that e-payment systems promote service delivery, loyalty and customer satisfaction. E-payment systems help to track customers. It also helps to map out terrains of the future and chart the most profitable course and also changes the way organizations approach their customers.

The study made use of primary data. Structured questionnaire was administered to 164 randomly selected students of Redeemers University. The data obtained were then subjected to the statistical analysis of descriptive statistics and multiple regression analysis. The results revealed that internet banking, mobile banking, ATM and POS system positively and strongly influence customer satisfaction (both individually and jointly). In addition, ATM has the highest effect on customer satisfaction, followed by mobile banking and internet banking. POS system has the least effect on customer satisfaction.

The study concludes that the easiness, flexibility, reliability, accessibility, cost effectiveness, safety and security as well as personalization of electronic payment systems in Nigeria with respect to ATM, POS, internet and mobile banking has strong impact on customer satisfaction in Nigeria.

The study suggested that; Management of commercial banks and other financial service providers should deepen their investment and technical efficiency in internet banking as far as usefulness, friendliness and personalized internet banking are concerned; Management of banking institutions and other financial service providers should enhance the application of mobile banking to increase customer satisfaction; Banking institutions should invest in ATMs that are easy to use, guarantees privacy and security, affordable charges and the one that allows customers to make deposits; Banking institutions are advised to work with major retail outlet and other organizations that use point-of sale systems in order to ensure the cards issued to customers and POS systems are useful, fast and reliable.



1.1 Background To The Study

The rapid and consistent developments of information technology and the growth of internet-based banking and shopping have made electronics payment grown increasingly over the last decades and it’s widely viewed as a key driving force to increase the use of E-commerce services in the world, and Nigeria in particular. It is no longer news, that there has been a phenomenal increase in the amount of internet users in Nigeria. As at 2008, there was a 90% increase in the number of Nigerian internet users from the year 2000 (Ayo 2012). In the same vein, the number of online financial transactions has largely increased over the years.

Tokunbo (2015) defined E-commerce as the use of the internet for marketing, identification, payment and delivery of goods and services. Through the e-commerce industry, the country has revolutionized the mode of business transactions by providing consumers with the ability to bank, invest, purchase, distribute, communicate, and explore anytime and anywhere so far access to the internet is available. By E-commerce, we mean the use of the global Internet for purchase and sale of goods, services, including service and support after sale. Internet commerce brings some new technology and new capabilities to business, but the fundamental business problems are those that merchants have faced for many years. You must have something to sell, make it known to potential buyers, accept payment deliver the goods or services, and provide appropriate service after the sale. E-commerce (electronic commerce) which (Jeffrey and Bernard, (2004) see as the process of buying and selling of goods and services or the transmitting of funds or data, over an electronic network, primarily have so many ever emerging opportunities.

Modern technology advancement facilitates the acceptance of electronic payment for online transactions and off line transactions. E- Payment also known as a sample of Electronic Data Interchange (EDI) is a system that has become increasingly popular due to the widespread use of the internet-based shopping and banking. As payment is an integral part of mercantile process, electronic payment system is an integral part of e-commerce. The emergence of e-commerce has created new financial needs that in many cases cannot be effectively fulfilled by traditional payment systems. Humprey (2001) also defined an electronic payment system as cash and associated transactions that are implemented using electronic means. The use of the internet and digital stored value systems are typical in this regard, thereby allowing bill payments or debit transfers done directly from the bank. Agimo, (2004) defined an electronic payment system as that payment by direct credit, electronic transfer of credit card details, or some other electronic means as opposed to payment by check and cash. Accordingly, an electronic payment system is any means used to make payment using an electronic network such as internet. E-payment stages among many others include transaction process, cost of payment, security/ confidentiality or customer details and network availability. Many new payment services have come into existence in recent years, most of which are based on technological innovations such as card, telephone and the internet (Abor, 2004). In 1993, the Central Bank of Nigeria (CBN), introduced the use of payment cards (smartcard) and paper-based instrument. Similarly in 2004, CBN introduced a broad guideline one-banking which included the introduction of Automated Teller Machine (ATM) e-money products such as credit and debit cards (Salimon, 2006). Currently, there is a Real-Time Gross Settlement (RTGS) system that eliminates the risks involved in large-value payment. However, not much result have been achieved in terms of evolving an efficient payment system arising from some attitudinal and social problems as manifested in the huge amount of money that resides outside the banking sector (Ojo, 2004).

Over the years, credit cards have become one of the most common forms of payment for e-commerce transactions. As a result of modern technology, in America and other developed countries  high percentage of online retail transactions were made with this payment type. It would be difficult for an online retailer to operate without supporting credit and debit cards due to their widespread use. Increased security measures include use of the Card Verification Nunber (CVN) which detects fraud by comparing the verification number printed on the signature strip on the back of the card with the information on file with the cardholder’s issuing bank. Also online merchants have to comply with stringent rules stipulated by the credit and debit card issuers (Visa and Master Card) this means that merchants must have security protocol and procedures in place to ensure transactions are more secure. This can also include having a certificate from an authorized Certification Authority (CA) who provides (PKI Public-Key Infrastructure) for securing credit and debit card transactions.

There are many companies that enable financial transactions to take place over the internet, such as PayPal, Interswitch, Quickteller etc. Many of the intermediaries permit consumers to establish an account quickly, and to transfer funds into their on-line accounts from a traditional bank account (typically via ACH {Automated Clearing House}transactions), and vice versa, after verification of the consumer’s identity and authority to access such bank accounts.

In its simplest form, a payment is any exchange of value between two parties, where usually Party A offers a form of currency in exchange for a good or service provided by Party B. With about 90 million Nigerians now enjoying access to the internet, the e-market is bound to get even bigger and wider too, which will apparently increase the number of customers that use e-payment system to buy or purchase over the internet or e-commerce.

1.2 Statement Of The Problem

While the use of e-payment system is obviously beneficial and has been implemented by millions of companies all over the world, in line with its benefits, companies and customers have also faced certain challenges. One of the challenges encountered is that the e- payment system requires some degree/level of literacy. That is, some customers that make use of e-payment system are not well knowledgeable or do not know how to use the e- payment system to seal a transaction on their own. While another problem identified is that most of the customers are security conscious. According to Ezeoha (2006), the Advance Fee Fraud code-named 419, is one of the most popular Internet frauds. This is due to the fact that a customer’s transaction codes and detail may not be secured if any error occurs on the portal. There is need to put in place effective security measures to safeguard the client, server as well as the media of transmission (Ghosh, 1997).

 Over the years, it has been discovered that cost of transmission on e-commerce portal per transaction is too high. This is because customers will have to subscribe for data and most at times, the bank charges tends to be much. Also, most customers feel frustrated when the transmission processes on e-commerce portal seem to be too long which is mostly as a result of poor network access to the internet.  Bickersteth (2005) attributed to the slow pace of development of e-payment to lack of adequate infrastructure, low Internet penetration, absence of open standards/trust among banks and providers as well as absence of adequate legislation or national policy on IT development.

Therefore the gap between e payment system and customer satisfaction include sthe following

        I.            It requires a level of literacy

     II.            Insecurity

  III.            Cost of transmission is high

  IV.            Poor network access to internet

1.3 Objectives Of Study

The broad objective of the study is to examine the impact of e-payment system on customer satisfaction among undergraduate students of Redeemer’s University. The specific objectives are:

        I.            to investigate the impact of internet banking on customer satisfaction in Nigeria.

     II.            to determine the impact of mobile banking on customer satisfaction in Nigeria.

  III.            to assess the impact of Automated Teller Machine (ATM)on customer satisfaction in Nigeria.

  IV.            to investigate the impact of point of sale system on customer satisfaction in Nigeria.

1.4  Research Questions

2        To what extent has internet banking influenced customer satisfaction in Nigeria?

3        To what extent has mobile banking influenced customer satisfaction in Nigeria?

4        To what extent has automated teller machine influenced customer satisfaction in Nigeria?

5        To what extent has point of sale system influenced customer satisfaction in Nigeria?

5.4  Research Hypotheses

  1. H0: Internet banking has no significant impact on customer satisfaction in Nigeria.

H1: Internet banking has significant impact on customer satisfaction in Nigeria

  1. H0: Mobile banking has no significant impact on customer satisfaction in Nigeria

H1: Mobile banking has significant impact on customer satisfaction in Nigeria

  1. H0: Automated teller machine has no significant impact on customer satisfaction in Nigeria.

H1: Automated teller machine has significant impact on customer satisfaction in Nigeria.

  1. H0: Point of sale system has no significant impact on customer satisfaction in Nigeria

H1: Point of sale system has significant impact on customer satisfaction in Nigeria

1.6 Significance of The Study

This study is very important and very significant because it emphasizes on the important of e-commerce payment system on customers satisfaction.

The outcome of this study will educate the general public on the effectiveness and importance of e-commerce payment system on customer’s satisfaction

1.7 Scope of The Study

The study is restricted to undergraduate students in Redeemer University, Ede, Osun State. The study focused on university students because they represent the first generation to grow up with the internet. University students are amongst population that have easy access to the internet and often times, the internet is a daily routine to this group of people.

1.8 Definitions of Terms

ELECTRONIC PAYMENT: Ingenico (2012) defined electronic payment as a financial exchange that takes place online between buyers and sellers. electronic payment system as that payment by direct credit, electronic transfer of credit card details, or some other electronic means as opposed to payment by check and cash. Accordingly, an electronic payment system is any means used to make payment using an electronic network such as internet.

CUSTOMER: customer also known as a client, buyer, or purchaser is the recipient of a good, service, product or an idea obtained from a seller, vendor, or supplier via a financial transaction or exchange for money or some other valuable consideration including buying over the internet

SATISFACTION: customer level of approval when comparing a product’s perceived performance with his or her expectations. When the value of good and service meets the expectation of a customer, such customer is said to be satisfied.

CUSTOMERS SATISFACTION: Customer satisfaction is a marketing term that measures how products or services supplied by a company meet or surpass a customer’s expectation.

This material content is developed to serve as a GUIDE for students to conduct academic research

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