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Evaluation Of Cashless Policy On Customers Satisfaction Through The Use Of Electronic Gadgets

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Download the complete materials on Evaluation Of Cashless Policy On Customers Satisfaction Through The Use Of Electronic Gadgets from chapter one to five with references


This study researched into the evaluation of cashless policy on customers satisfaction through the use of electronic gadgets in selected Nigerian banks. Individuals believe that Central Bank of Nigeria has not achieved 40% of Automated Teller Machine Expansion and so it creates problem of long queue at some venues of the machine. 

The cashless policy has not improved the confidence of customers in banks thereby making them to believe that cashless system in Nigerian is 60% vulnerable to fraud.

This study focuses on the extent to which the electronic gadgets put in place satisfy customers efficiently. It also investigates if these gadgets has reduced the problems inherent before the introduction of cashless policy and lastly, this study examine if the implementation of cashless policy has a positive effect on customers satisfaction. Based on this study, four banks were selected using the systematic sampling technique based on their reputation and track record. 

The selected four commercial banks in Nigerian are Guaranty Trust Bank Plc., the First Bank Plc., Diamond Bank Plc., and Zenith Bank Plc. Questionnaires were administered to staff and customers of the selected banks. A total of ninety (90) questionnaires were used. This questionnaire contain twenty five questions based on the study. The three hypothesis generated were tested using the Analysis of Variance (ANOVA) and Multiple regression. 

It was found out that there is no significant relationship between electronic gadget and customer satisfaction. The study also found out that the introduction of cashless policy has not reduce not reduce the problems encountered in banks instead it has increased it. Such problems include; poor network connection, poor literacy level among others. The study recommended that since the electronic gadgets that is the ATM, POS, Mobile Banking and so on do not satisfy customers, therefore it suggested that the electronic gadgets quality should be improved and all variables which contribute to the success of the electronic gadgets should be developed to ensure a successful running of cashless policy. It is also suggested that new innovative bank services should be rendered to customers.



1.1 Background to the Study.

The recent evolution of  technology for financial transactions poses questions about the suitability and arrangement of institutional structure and availabilty of instrument to gurantee financial stability, effiency, effectiveness of monetary policy implemented by the CBN(central bank of Nigeria). Over the years, different forms of payment systems have been in existence starting from the barter system which had problems and in which this problems led to introduction of various forms of money. Different predictions were made and study of some instruments has been made to substitute cash or monetary exchanges thereby leading to a cashless society.

Cashless policy has always being the vision of central bank to make the country move towards a better technological advancement in all spheres of Nigerian sector such as  Banking, Social, Public, educational sector. This policy has been a recent phenomenon that has drawn the attention of financial institutions, governments and financial regulatory bodies and most especially bankers in the Nigerian economy.

The drive toward this economy came as a result of some lapses suffered by the manual banking system where customers are always reluctant to go to bank because of the problem of long queue and problem of slow attention to customers because of posting of transactions using double entry system without the use of computer and so it creates lack of confidence in mind of customers. This era of dynamic banking system has been growing from one technology advancement to the other and so the issue of cashless policy came up. The central bank of Nigeria introduced the cashless policy in January 2012 and this made the economy enter into another era of technology advancement and it used Lagos state as the pilot state.

A cashless economy is an environment in which money is spent without being physically carried from one person to the other. The first issue is the electronic purse which serves as an electronic information that is transmitted to device which reveals the information about how much a person has stored in the bank. Recently, statistics shows that nearly 2.5 billion people(almost half of the world’s adult population) do not have access to formal financial services. It is beyond doubt that information technology can help reduce transaction costs for banks which will translate to lower prices for services to customers(Dugeri, 2013).

Furthermore, the cashless policy was enacted to discourage cash transactions, which will be beneficial to the insurance companies, because people will now have to pay directly into the coffer of the companies, and there will be no forced default on the part of policyholders (utomi, 2013). The cashless policy initiative of the central bank of Nigeria is a move to improve the financial terrain but in the long run sustainability of the policy will be a function of endorsement and compliance by end-users (Ejiro,2012).

When cashless policy was implemented by the CBN, several monetary policies was introduced. The CBN cash policy stipulated a daily cumulative limit of N150,000 for individuals and N1,000,000 for corporate customers in Lagos state with effect from 30th march, 2012.Individuals and corporate organizations were charged penalty fees at N100 per extra N1,000 and N200 per extra N1,000 imposed respectively (chijoke, 2013).

The advantages of a cashless society are enormous in terms of privacy, security, and cost of transportation. It is said that before the innovation of this policy 63.7% of Nigerians do not have bank account but the new initiative would enhance bank account openings among individuals(Dugeri, 2013). The high cost of minting has also necessitated this policy.

Specifically, the average cost of producing a naira note is about ₦4.00 producing 1 billion notes of Nigerian naira means spending ₦4 billion. Despite the benefits of cashless policy customers have doubts about the capacity of Nigeria to truly move progressively as a cashless society. Introduction of cashless policy has increased the number of bank customers and this has not actually increased the level of customers’ satisfaction. Regulatory authorities like the Central Bank of Nigeria still battle with the ripples of the effect of cashless policy on customers.


Recently the central bank of Nigeria implemented a policy that all banks should register new account holders using biometric scheme. This is done in order to reduce the cost of losing customers data. Therefore it should be stressed that there is a correlation between the implementation of cashless policy in the economy and the satisfaction of bank customers as well as banks staff and so the regulatory authorities should adopt potent supervisory techniques that will bring the cashless economy to its successful point.

This research work has established the extent to which customers are satisfied with the use of electronic instruments such as Automated teller machine, point of sale machine, electronic data interchange, smart card, western union transfer etc. and efficiencies in discharging their duties in some selected Nigerian banks such as First bankPlc., Guaranty Trust bankPlc., Diamond Bank Plc., Zenith Bank Plc. It has been confirmed that these four banks have been among top banks in Nigeria that has aid customer satisfaction variably.

 1.2       Statement of Problem

Since the introduction of cashless policy by the central bank of Nigeria, banks have introduced different kind of electronic gadgets which serves as the fastest means of performing transaction quickly without customers going to the bank. However, the introduction of these instruments still have not gained customers satisfaction and so some Nigerians have doubt in the era of this policy. Some of Nigerians believe this policy is an economic jargons.

Individuals believe that CBN has not achieved 40% of ATM expansion and so it creates problem of long queue at some venues of the machine. Besides, Dogara said the people’s low literacy level and the absence of constant power supply would discourage most citizens from embracing the policy. The introduction of the cashless policy in 2012 is yet to have its full effect on the economy due to persistent network failure, inadequate POS machines and poor electricity supply.

The lack of confidence of customers of new generational banks and old generational banks has increased customer’s crave for maximum satisfaction with this policy. Meanwhile, information security experts have confirmed that the infrastructure supporting the cash-less system in Nigeria may be 60% vulnerable to fraud. This according to them is because the system is only 40% protected as only 1% of the operators involved have attained the Payment Card Industry Data Security Standard certification (PCI DSS).

1.3 Research Questions

Based on the statement of problem the following research questions were raised:

  1. How does the electronic gadgets put in place satisfy customer?
  2. Have those gadgets reduced the problems inherent before the introduction of cashless policy?

iii. How does the implementation of cashless policy have positive effect on customer’s satisfaction?

1.4 Justification for the Study
This research work is justified by examining the adoption of cashless policy in order to describe the effects on customers’ satisfaction using the Nigerian selected banks; First Bank Plc., Zenith Bank Plc., Diamond BankPlc., Guaranty Trust Bank Plc. Over the years efforts has been made to reduce the problem of long queue in the bank for both deposits, withdrawal and other problems which calls for the adoption of cashless policy in the banking sector. One thing that can make this policy effective is the attitude of customers and people who are stakeholders in the society whether positive or negative.

The regulatory challenges recognizes that internet banking and other electronic payment services are still at the early stages of development in Nigeria. Kotler (1990) explained that companies aim at satisfying their interest and the interest of their staff more than that of the customer and example of such companies is the bank.


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