CHAPTER ONE
INTRODUCTION
1.1. Background of the Study
Today’s business environment is extremely dynamic in nature. It has experienced rapid changes as a result of technological improvements, increased awareness and demands for banks services. The Banking industry of the 21st century operates in a complex and competitive environment characterized by these changing conditions and highly unpredictable economic climate, thus, information and communication technology (ICT) is at the centre of this global change. Amedu (2005) asserts that banks over the time have been using electronic and telecommunication networks for delivering a wide range of value added products and services. Therefore, information systems could not be ignored because they play a critical role in current Banking system in Nigeria.
Electronic banking is known as e-banking, virtual banking or an online Banking, it is a service that allows customers to access their bank information, conduct financial transactions, make deposits, withdrawals and pay bills through the internet without having physical visit to their banks. It provides the convenience of accessing banking facilities from the comfort of their home/offices. (Awamleh & Fernandez, 2005).
The concept of electronic banking system began when the first Automated Teller Machine were instated in the 1970s. An ATM machines allowed deposits to be made from the remote locations-- a convenience for customers who otherwise would have had to withdraw cash personally from their bank. The advantages offered by ATM Machines quickly split over to encompass other areas of bank services, computerizing manual system for greater efficiency and time savings. The concept behind ATM machines gave rise to smart cards, intranets and internet banking, electronic funds transfer {EFT}, NIBSS (Nigerian interbank settlements system), POS {Point of Sales Service.}, Access mobile, and other electronic devices (Ahasanul, 2010).
The growth in the application and acceptance of internet-driven technologies means that delivering an enhanced service is more achievable than ever before, however it is also more complex and fraught with potential costs and risk. The internet introduces customers to a new perception of business time as always available and demanding an urgent and rapid response. The serves as a challenge for managers who must to reconcile their business and their own personal perceptions of time with the perceived reality of internet time, as the internet has decisively shifted the balance of power to the customer.
Presently, banks in Nigeria are adding value to their services for customer’s satisfaction. The customers have more choices in choosing their banks because the new age IT (Information Technology) is bringing about sweeping changes in the banking industry, forcing them to reengineer many of their basic processes and systems. Few of the technology-driven electronic banking services being offered are viz. Automated teller machines ATM, Electronic Clearing Service (ECS), electronic funds transfer (EFT), tele-banking, internet banking etc. New technological capabilities are now being effectively used to create value and to better manage customer relationship in Nigeria banking system. (Raji, 2010).
1.2 Statement of the problem
In Nigeria, customers of banks seek for safety of their funds and increased returns on their investment. Customers demand efficient, fast and convenient services. Many customers today want banks that offer them services that will meet their particular needs and support their business goals. For instance, a business man wants to travel without carrying cash for security reasons. The central bank of Nigeria has emphasized the need for banks to provide more efficient services to their intending and potentials customers. Therefore, the introduction of electronic banking system in the Nigerian financial industry is expected to play an important role in the delivery of efficient and effective services. Unfortunately, most Nigerian banks are still lagging behind in adopting and equipping themselves with the current and sophisticated electronic devices as a results of non availability of financial, management and human resources, which would have given them more competitive advantages and attract more customers to themselves. One is therefore inclined to wonder what could be responsible for the non adoption of the present banking gadgets. Is it that the present employees of the banks cannot make use of these advance gadgets? Or are the gadgets too costly to be acquired by the banks? These are the questions which this project intends to seek appropriate solution.
1.3 Objectives of the study
The main objective of this research is to appraise the effect of electronic payment system on customer satisfaction in Nigeria banking system. Specifically, the study will examine the following objectives:-
- To evaluate the effects of electronic payment system on banks customers.
- To assess the impact of electronic payment system on the bank’s service delivery.
iii. To examine the effect of electronic payments on competitive advantage of the bank.
- To ascertain the effect of electronic payment system on increase in market size of the banks.
1.4 Research questions
The following research questions were developed in order to guide the study:
- Does the electronic payment system enhance service delivery in the banking system?
Does the electronic payment
