1.1 Introduction
Point of sale (POS) refers to the place where a customer executes the payment for goods or services and where sales taxes may become payable. It can be in a physical store, where POS terminals and systems are used to process card payments or a virtual sales point such as a computer or mobile electronic device (Investopedia, 2021). POS systems saves money, provides productivity gains, and can cut down the amount of time you spend away from the primary focus of your business. This POS System Buyer's Guide will walk you through the process of evaluating multiple POS vendors and choosing the right system (Petee, 2005).
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.
1.2 Background of Study
The financial institutions and telecommunication companies’ worldwide are facing new loop on the Information and Communication Technology convergence curve. Point of sale [POS] terminal has emerged as a promising new application of the next generation e-payment system. The role and importance of efficient payment system has been closely monitored and promoted by monetary authorities in all countries. The Nigerian payment system that is cash - driven cannot and has not guaranteed the much needed efficient and effective payment platform required for a sustainable economic development, (Adeoti, 2013).
According to Vaidge (2015) states that during the 21st century, E-banking has enabled quick services to customers as they can now view their banking transaction balance, history, fund transfer as well as instruct payroll based transaction. The deployment of POS to financial market is nonetheless brought a huge relief to customers thereby decongest already stressed traditional bank as well as ATM point and create job opportunity. According to record published by statistics research department in February 1, 2021 indicated that from January to August 2020, over 380 million POS payment were registered in Nigeria with revenue worth 2.8 trillion naira.
The Nigerian economy being largely cash-based is associated with high cost of cash management. Reliance on cash based payment platform has been found to be risky and cumbersome. Carrying cash in the economy is responsible for large pool of money being found in the hand of the unbanked citizens. In an effort to reduce the volume of cash in circulation and reduce the risk of going about with huge cash, the CBN introduced electronic payment system such as point of sale (POS) terminal, automated teller machine (ATM), payment cards [Smart card] etc into the Nigerian economy. This has given rise to the introduction of switch companies that facilitate interconnectivity (SalimoandAdeoti, 2013).
A point of sale / service (POS) terminal is used to conduct retail transactions. It can provide many services including credit card processing check reading and transactions depending on the model. These devices can be found virtually anywhere, from grocery stores to gas stations. The technology used in POS machine results in a speedy and secured transaction. However, in addition to being more efficient than cash registers, POS systems can create detailed reports that can help you make more informed business decisions. New businesses choose to invest in a POS system before reaching those revenue levels - or before having any appreciable revenue at all (López et al., 2004).
Based on CBN policy on cash lodgments and withdraws all businesses that accept cash up to N0.5m for individuals and up to N3m for corporate customers for their daily business transactions require a POS terminal to avoid being charged from 2% in excess of the approved free lodgment limit. These include supermarkets, hotels and restaurants, electronic shops, pharmacies, boutiques, Hospitals, Distributorships, Airlines, etc.
The role and importance of efficient payment systems has been closely monitored and promoted by monetary authorities in all countries. However, the Nigerian payment system that is cash-driven cannot and has not guaranteed the much needed efficient and effective transactions required for a sustainable economic development. Among the problems often associated with cash transactions are armed robberies, use of counterfeit bank notes, frauds, inconveniences of carrying large quantities of currency notes, long period of waiting in bank halls, frequent trips to banks, frequent printing of bank notes (Nnanna and Ajayi, 2005). However, schools in Nigeria are beginning to key in into this cashless system of payment byincorporating modern and cashless method of payment especially the use of PoS.
Point-of-sale (PoS) systems have always been around in many forms for a number of years now. Many businesses use these systems not only to accept payment, but to provide other operational information such as accounting, sales tracking, and inventory management. Thus far, this system has gone a long way in improving customer’s experience through customer loyalty programs and suggestions in businesses (Ojo, 2004). Nowadays, the use of POS system is not only available in business set ups but also in schools which have gone a long way in impacting schools.
Therefore, in Kontagora Metropolis where the research was carried out, the activities that was conducted is to investigate the Impact of Point of Sale on Nigeria Financial Sector.
1.3 Statement of Problems
Generally, electronic payment system (e-payment) refers to an electronic means of making payments for goods and services procured online or in supermarkets and shopping malls. It enables websites and shopping malls to securely process transactions in real time. It operates on a smartcard that stores information on microchips. The microchips contain a purse in which monetary value is held electronically.
The electronic payment system takes the following forms: electronic financial payment system, where payment is through some specific protocols, and smartcard payment system, where the information on the silicon is used to effect payment for services (Adeoti, 2013:2). This payment system provides a better audit trail than transactions that involve physical cash and thus reduces the amount of currency in circulation.
The adoption of this payment platform by the consumers has improved Nigeria’s payment system. This is evident in terms of the volume, value and level of adoption in the country. The level of adoption by the consumers has continued to increase significantly; and this accounted for the billions-worth of transactions as at 2008 (Adesina and Ayo 2010 in Adeoti 2013:1).
However, despite the general increase in the adoption of e-payment system, the rate and use of POS is relatively low when compared to the rest of e-payment platforms. Customers who prefer to use the POS find it difficult because most POS are not loaded with cash making them to travel from one POS to another. Merchants with POS terminals still prefer cash payment as this is the most frequently used payment option.
1.4 Aim and Objectives of Study
The aim of the study is to examine whether the adoption of POS has significantly reduced the stress of accessing traditional banking sector in Nigeria with particular reference to Kontagora Local Government of Niger State and as well assess the ability of POS machine to perform a given job. In achieving this aim, the following specific objectives were laid out as follows:
- To assess the effectiveness of the implementation of POS payment system in Kontagora Local Government Area of Niger State.
- To identify perceived obstacles inherent with the implementation of POS payment system
- To investigate the significant change on the number of people queue at the traditional banking sector in Kontagora metropolis
- To evaluate the control measure in place to protect both the operator and the user
- To proffer solutions to the identified obstacles in the implementation of the system.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- Are there factors instigating the Impact of Point of Sale on Nigeria Financial Sector?
- Is there control measure in place to protect both the operator and the user?
- Has there been any significant change on the number of people queue at the traditional banking sector in Kontagora metropolis?
- How effective is the implementation of POS payment system in Kontagora Local Government Area of Niger State?
- What are the perceived obstacles inherent with the implementation of POS payment system?
- What are the solutions to the identified obstacles in the implementation of the system?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
Hypothesis One
- H0: Point of Sale (POS) does not reduce stress of accessing traditional or conventional banking sector.
- H1: Point of Sale (POS) has reduced the stress of accessing traditional banking sector in Nigeria.
Hypothesis Two
- H0: There is no significant factor affecting Point of Sales (POS) Growth of Banking Sector in Kontagora Metropolis
- H1: There is a significant factor affecting Point of Sales (POS) Growth of Banking Sector in Kontagora Metropolis
Hypothesis Three
- H0: Point of Sale (POS) does not improve banking services to customers by performing given task or job.
- H1: Point of Sale (POS) improves banking service to customers by performing given job.
1.7 Significance of Study
The following are the significance of this study:
- Findings from this study will educate authorities and executives in Financial Institution and also the individuals using POS system in Nigeria on how they can key in to the CBN cashless policy to promote efficiency in firms.
- This research will also serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently, if applied will go to an extent to provide new explanation to the topic.
1.8 Scope of Study
The scope of this research work is to analyze the impact of Point of Sale (POS) on the financial sector using Kontagora Local Government Area of Niger State as a case study and the research survey will be conducted in Kontagora emirate being the hub of the city.
1.9 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this project work. There were lots of information needed from the staffs of this establishment to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.
- Research material: availability of research material is a major setback to the scope of the study.
- Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
1.10 Definition of Terms
Cash Drawer: a box attached to point of sales system that opens when directed by the software.
Banner: An advertisement or image displayed on one or more websites to attract visitors to your site.
Bar Code: information encoded into a rectangular bar shape, this information can be read by special device.
Credit card: it is a card entitling its holder to buy goods and service from certain establishment.
E-commerce: Generally refers to exchange of goods or services over electronic system such as internet.
