Electronic Payments and Economic Growth in Nigeria...E-Payments and Economic Growth The Central Bank of Nigeria (CBN) notes that the volume and value of electronic card transactions

Electronic Payments and Economic Growth in Nigeria

A Report by RTC Advisory Services Ltd

June 2013

This Report was written by Opeyemi Agbaje and Kehinde Ayanbadejo with research support from Olabisi Ajiboye, Opeyemi Kalejaiye and Olusola Dada

Executive Summary

Macroeconomic Overview

Nigeria is a large and growing country-2011 population of over 164million and population growth rate of 3.2%. Real GDP has grown at between 6-7% since 2007, with nominal and PPP GDP at $242bn and over $400bn respectively (CBN Annual Report, 2011). In 2012, real GDP growth rate was 6.5% and real and PPP GDP rose to $261.5bn and $450.5bn respectively (CBN, 2013). Foreign reserves are now in excess of $45bn and macroeconomic conditions are generally stable. However, social conditions are less than ideal-$/day poverty at 62.5%; life expectancy a mere 54 years; and unemployment close to 24%. Private consumption expenditure has however grown since 1999, though the growth rate is now declining.

Internet and Payments Sector

Only 7% of internet users worldwide are in Africa. 167.3million Africans have access to the internet compared with 254.9million Latin Americans, half a billion Europeans and over 1 billion Asians. Internet penetration in Africa is 15.6% versus a world average of 34.3%. However Nigeria is Africa’s top internet nation with 48.4 million internet users (Internet World Stats, 2012). The electronic payments sector in Nigeria is dominated by ATMs, which as at 2011 constituted 93% of all alternatives to cash. The telecommunications revolution from 2001 and banking consolidation of 2005-2006 have provided a strong foundation for growth of electronic payments.

Market Share in the e-Payment Market in 2006-2011

e-payment Segment

Volume (Mn) Value (N' Bn)

2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 ATM 12.1 15.7 60.1 109.6 186.2 347.6 63.2 131.6 399.7 548.6 954.0 1,561.8 % of Total 92.1 88.7 90.9 95.3 95.1 97.9 73.1 88.5 90.5 85.0 88.9 93.4

Web (Internet) 0.2 0.9 1.6 2.7 7.2 3.6 3 10.6 25.1 84.2 99.5 58.0

% of Total 1.5 5.1 2.4 2.3 3.7 1.0 3.5 7.1 5.7 13.1 9.3 3.5 POS 0.8 0.4 1.2 0.9 1.1 2.1 20.2 6.4 16.1 11.0 12.7 31.0 % of Total 6.1 2.3 1.8 0.8 0.6 0.6 23.4 4.3 3.6 1.7 1.2 1.9 Mobile 0.04 0.7 3.2 1.8 1.2 1.9 0.1 0.1 0.7 1.3 6.7 20.5 % of Total 0.3 4.0 4.8 1.6 0.6 0.5 0.1 0.1 0.2 0.2 0.6 1.2 Total 13.14 17.7 66.1 115.0 195.7 355.2 86.5 148.7 441.6 645.1 1,072.9 1,671.4

Source: CBN Annual Report 2011

“Cashless Lagos” Initiative

In a major push to encourage e-payments and other alternatives to cash, the CBN commenced a “Cashless Lagos” policy in Lagos State of Nigeria, as part of a wider shared services programme that seeks to achieve a 30% reduction in cost of banking services. Other objectives include increasing access, convenience and service levels across the industry; and integrating financial services into the economy.

The CBN estimated the direct cost of cash to the financial system as N114bn ($718.75million @N160/$) as at 2009 and projected the figure to rise to N192bn ($1.2bn) in 2012. Cash-in-transit, cash processing and vault management costs make up 24%, 67% and 9% respectively of the total direct cost of cash. CBN data also indicates that pre-Cashless Lagos, cash constituted 85% of commercial payments in Nigeria. Apart from the direct cost, other costs include robberies and cash-related crimes; corruption and money laundering, non-financial sector costs of cash processing by all entities across the value chain; government revenue leakages; and inefficient treasury management. The CBN has recently announced that the cashless policy will be extended to Rivers, Kano, Anambra, Abia and Ogun States of Nigeria, and the FCT Abuja in July 2013.

Current Policy Environment

The current inclination of Nigeria’s central bank which is the predominant regulator in the sector appears to be to shape policy towards a Portuguese model in the mold of SIBS (Sociedade

Interbancaria de Servicos-Interbank Services Company). SIBS was founded in 1983 and provides secure payment solutions including fully integrated cards, ATM and POS multi-system management (Visa, American Express, Mastercard etc), multi-vendor multi-application processing and security management to support ATM, POS, On-line and mobile transactions. The Nigerian vehicle envisaged by the CBN to play this role is evidently Nigerian Inter-Bank Settlements System (NIBSS) owned by the banks, discount houses and central bank, with its board chaired by a CBN Deputy Governor. NIBSS Plc was set up in 1993 and commenced operations in June 1994. NIBSS has put in place infrastructures for handling inter-bank payments, inter-bank funds transfer and settlements and operates the Nigeria Automated Clearing System (NACS) electronic funds transfer, Automated Direct Credits and Automated Direct Debits. NIBSS has acquired technologies for the operation of the Nigeria Central Switch (NCS). The other recent policy initiative from the CBN is the cancellation of the N100 charge levied by banks on ATM usage by customers of other banks with the objective of reducing cost of alternatives to cash. While these initiatives may be attractive from the user/cost perspective (since NIBSS has a shared services, rather than profit objective), one consequence may be to discourage private, entrepreneurial initiatives.

Study Methodology

This study aimed at examining and estimating the impact of e-payment on economic growth in Nigeria. The data employed for the analysis were both primarily and secondarily sourced. The primary data was obtained through a well designed questionnaire based on survey method in five regions of Nigeria namely Lagos, Ibadan, Kano, Abuja and Port Harcourt. The respondents were chosen by purposeful sampling focusing on students, bankers, traders and civil servants. Respondents surveyed in this study were asked to complete the questionnaire on a voluntary basis. The questionnaire was divided into two sections which include respondents’ demographics and questions on the usage and impact of e-payment. The data was analysed using specialized software- the Statistical Package for Social Sciences (SPSS) ver. 17. We also conducted interviews with senior officials of First Bank of Nigeria Plc, E-Tranzact, Nigerian Interbank Settlements System Plc (NIBSS), Mastercard Worldwide, E-Payment Providers Association of Nigeria and representatives of on-line merchants.

The secondary data used in this study was sourced mostly from the Central Bank of Nigeria (CBN) statistical bulletin, annual report and statement of account of various years and other CBN publications on cashless policy. Also consulted were data from the National Bureau of Statistics (NBS) and Nigeria Inter-Bank Settlement System (NIBSS). Based on a simple model and computation technique developed by the researchers, the study estimated the economic impact of e-payment and projected its impact for 5 years from 2012 to 2017.

Summary of User Survey

The major difficulties users face are network (communication links between banks and e-payment infrastructure) issues, literacy, concerns on risks and unreliable machines. On-line purchases are yet to become predominant but more than 50% of respondents agree that e-payments has influenced their consumption pattern through providing access to easier, faster, more transparent and less restricted transactions. Respondents affirm that e-payments has contributed to employment generation in terms of transport/delivery, administrative/operational, ICT and production workers. The major challenges faced by users are network problems and service failures, slow transactions, perceived risk, power, long queues, frequent machine breakdown and awareness/literacy.

Power, telecommunications, internet and transport infrastructure exert significant impact on service quality. 86.4% of respondents believe that e-payments increase sales, productivity and economic growth.

E-Payments and Economic Growth

The Central Bank of Nigeria (CBN) notes that the volume and value of electronic card transactions increased significantly from 195,525,568 and N1,072.9billion in 2010 to 355,252,201 and N 1,6714.4 billion in 2011, an increase of 81.5% and 55.8% respectively. ATMs account for 97.8%, followed by web-payments (1%), POS and mobile payments (0.6%) in terms of volume. In value terms, ATM s accounted for 93.4%, web (3.5%), POS (1.9%) and mobile (1.2%). The CBN’s policy of promoting electronic cards and channels is driven by the objectives of reducing banking industry costs by 30 percent. It estimated the total direct cost of cash management in the Nigerian banking Industry as N114.5billion ($715.6million) as at 2009, with cash in transit costs (24%), cash processing cost (67%) and vault management costs (9%). The CBN projects the direct cost of cash to reach N192bn by 2012. The CBN projects numerous benefits including enhanced tax revenue, increased economic growth, increased financial inclusion, reduced robberies and cash-based fraud, reduced operating costs for banks, increased payments system efficiency and increased banking penetration.

Estimate of Economic Impact of E-Payments for Five Years

2012 2013 2014 2015 2016 2017

Direct cost of Cash for Financial Sector (N'Millions) 192,000 200,640 202,700 196,900 193,700 189,100

Indirect Cost to Value Chain (N'Millions) 28,800 30,096 30,405 29,535 29,055 28,365

Total Cost of Cash Management 220,800 230,736 233,105 226,435 222,755 217,465

Cost of Cash Savings for Financial Sector 19,200 39,696 119,706 59,070 58,110 56,730

Cost of cash savings on Value Chain 2,880 5,954.40 17,955.90 8,860.50 8,716.50 8,509.50

Total savings from cost of cash 22,080.00 45,650.40 137,661.90 67,930.50 66,826.50 65,239.50

Savings from Agric E-wallet Scheme 30,240 31,449.60 32,707.58 34,015.89 35,376.52 36,791.58

Employment generation (N'Millions) 23,222.78 69,668.35 92,891.13 139,337.00 92,891.13 46,445.57

Additional Domestic Trade (N'Millions) 508,713 446,695 509,139 616,293 755,464 932,052

Imports (N'Millions) 137,844 100,325 174,873 224,811 263,943 290,480

Exports 0 0 0 0 0 0 Corruption and Crime (N'Millions) 508,725 516,800 516,800 516,800 516,800 516,800

Increased Taxation 194,068.00 160,933.00 206,431.00 260,940.00 308,994.00 375,163.00 Total Economic Impact of E-Payments 1,424,892.78 1,371,521.35 1,670,503.61 1,860,127.39 2,040,295.15 2,262,971.65 Gross Domestic Product (GDP) @ Market Prices 40,544,099.94 44,070,791.90 47,155,747.40 50,456,649.70 53,988,615.10 57,767,818.20 Economic Impact/GDP (%) 3.5 3.1 3.5 3.7 3.8 3.9

Source: Authors’ Computation

Conclusions and Recommendations

Our analysis and projections show that electronic payments could have as high as 3.1% of GDP economic impact in 2013, rising to 3.9% by 2017. This impact is largely from increased employment, savings from corruption, higher imports/domestic trade, savings from the government’s agricultural e-wallet scheme, financial sector savings from cash management, and non-financial sector substitution for cash.

We find that over a 5 year period, electronic payments can be expected to generate about 1.3million new jobs while eliminating about 647,394 others leaving net job gain of 645,077.

Our specific recommendations are:-

A critical constraint is infrastructure, especially power, telecommunications and internet. Industry stakeholders will have to join hands with other stakeholders in improving this infrastructure.

The banks, switching companies, card companies etc. must work towards improving equipment quality and standardization, as well as maintenance.

The banks must improve service quality and customer responsiveness in cases of lost or stolen cards, frauds, and other customer complaints in relation to e-payments.

There is significant need for public education and awareness on the benefits of e-payments. All stakeholders must strengthen system security and integrity to prevent/reduce frauds and

errors to improve public confidence in e-payments. There is additional need for ensuring ease of use, and customer interactive features in ATMs,

PoS terminals, mobile and on-line shopping systems. All stakeholders should explore the possibility of using pidgin English and/or major local

languages in addition to English on ATMs, POS terminals and online transactions. The government at all levels (federal, state and local) as well as private sector institutions

should continue the trend of making all salary and expenses payments through secure, automated platforms.

All stakeholders must invest resources in electronic fraud detection, forensic investigations and audit, and building the capacity of security and law enforcement institutions, revenue agencies and financial institutions in e-security.

The CBN should steadily continue to expand the coverage of the “cashless” policy until it covers the whole country.

The government of Nigeria should deal with crime, insecurity and terrorism, which inhibit economic activity generally, and e-payments in particular.

The CBN and banks must work with other stakeholders to ensure the wide pervasiveness of ATMs, PoS terminals, mobile payment infrastructure and internet availability towards bringing e-payments closer to current and prospective users.

We also recommend economy-wide investments in human capital, and competences to support technology and e-payments including engineering, science and technology, software and programming, logistics management and data systems processing.

We believe that the private and public sectors should explore and leverage opportunities for Public-Private Partnerships (PPPs) as an important mechanism for developing and realizing the huge potentials in electronic payments. Such PPPs will take advantage of domestic and global skills, knowledge and technology relating to e-payments as well as private capital and

combine same with the public sector’s national economic growth and developmental objectives to produce win-win outcomes for all stakeholders.

Finally there is a need for careful and constant monitoring of sector developments and stakeholder consultation in order to fine-tune policy where results diverge from desired effects

Nigeria Macroeconomic Overview

Nigeria is a large and growing country-2011 population of over 164million and population growth rate of 3.2%. Real GDP has grown at between 6-7% since 2007, with nominal and PPP GDP at $242bn and over $400bn respectively (CBN Annual Report, 2011). In 2012, real GDP growth rate was 6.5% and real and PPP GDP rose to $261.5bn and $450.5bn respectively (CBN, 2013). Foreign reserves are now in excess of $45bn and macroeconomic conditions are generally stable. However, social conditions are less than ideal with $/day poverty at 62.5%; life expectancy a mere 54 years; and unemployment close to 24%. Private consumption expenditure has however grown since 1999, though the growth rate is now declining.

Social Statistics

2007 2008 2009 2010 2011

Population 144,925,607 149,563,227 154,349,250 159,288,426 164,385,656

Population Growth Rate 3.2 3.2 3.2 3.2 3.2

Unemployment Rate (%) 12.7 14.9 19.7 21.1 23.9

Unemployment (15-24 years) 41.6 25.2 37.7

Poverty Incidence ($/Day Measure)

54%*CBN 54%*CBN 54%*CBN 61.2% 62.8%

Literacy Rate (%) 66.9 66.9 66.9 66.9 72.9

Teledensity 29.98 45.93 53.23 63.11 68.49

Life Expectancy (Years) 54 54 54 54 54

Land Mass (Sq/km) 910,770 910,770 910,770 910,770 910,770

Source: 1. Central Bank of Nigeria Annual Report and Statement of Account (various issues) 2. National Bureau of Statistics (NBS) Publication on National Poverty Profile 3. Nigerian Communications Commission (NCC) Industry Data Economic Statistics

2007 2008 2009 2010 2011

GDP @ Current Market Prices (N’ billion) 20,657.3 24,296.3 24,794.2 33,984.8 37,303.4

GDP @ Current Market Prices ($’ billion) 164.17 204.91 166.54 226.11 242.45

GDP @ Constant Market Prices (N’ billion) 634.25 672.20 718.98 776.33 833.44

Real GDP (PPP/$’ billion)* WB 293.77 318.28 344.18 375.38 411.37

GDP (Per Capita $) 1132.99 1369.72 1079.33 1419.40 1474.57

Real GDP Growth Rate (%) 6.45 5.98 6.96 7.98 7.36

Exchange Rate (%) 125.83 118.57 148.88 150.30 153.86

Foreign Reserves ($ million) 51,333.15 53,000.36 42,382.49 32,339.25 32,639.78

Inflation Rate (%) 6.6 15.1 13.9 11.8 10.3

Manufacturing Capacity Utilisation (%) 53.5 54.7 55.0 56.2 56.9 Source: Central Bank of Nigeria (CBN) Statistical Bulletin and Annual Reports (various years)

Private Consumption Expenditure

Sources: Plotted by authors with figures from Central Bank of Nigeria (2011) and National Bureau of Statistics (2012)

Internet and Payments Sector Review

Only 7% of internet users worldwide are in Africa. 167.3million Africans have access to the internet compared with 254.9million Latin Americans, half a billion Europeans and over 1 billion Asians. Internet penetration in Africa is 15.6% versus a world average of 34.3%. However Nigeria is Africa’s top internet nation with 48.4 million internet users. The electronic payments sector in Nigeria is dominated by ATMs, which as at 2011 constituted 93% of all alternatives to cash. The telecommunications revolution from 2001 and banking consolidation of 2005-2006 have provided a strong foundation for growth of electronic payments.

Nigerian E-Payment Sector Statistics 2006-2011

Market Share in the e-payment market in 2006-2011 e-payment Segment

Volume (Mn) Value (N' Bn) 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011

ATM 12.1 15.7 60.1 109.6 186.2 347.6 63.2 131.6 399.7 548.6 954.0 1,561.8 % of Total 92.1 88.7 90.9 95.3 95.1 97.9 73.1 88.5 90.5 85.0 88.9 93.4 Web (Internet) 0.2 0.9 1.6 2.7 7.2 3.6 3 10.6 25.1 84.2 99.5 58.0 % of Total 1.5 5.1 2.4 2.3 3.7 1.0 3.5 7.1 5.7 13.1 9.3 3.5 POS 0.8 0.4 1.2 0.9 1.1 2.1 20.2 6.4 16.1 11.0 12.7 31.0 % of Total 6.1 2.3 1.8 0.8 0.6 0.6 23.4 4.3 3.6 1.7 1.2 1.9 Mobile 0.04 0.7 3.2 1.8 1.2 1.9 0.1 0.1 0.7 1.3 6.7 20.5 % of Total 0.3 4.0 4.8 1.6 0.6 0.5 0.1 0.1 0.2 0.2 0.6 1.2 Total 13.14 17.7 66.1 115.0 195.7 355.2 86.5 148.7 441.6 645.1 1,072.9 1,671.4

Source: CBN Annual Report 2011

Source: Plotted by authors with figures from CBN (2011)


Mobile Payments

The CBN has issued 11 provisional licenses for mobile payments to various licensees-Eartholeum, Ecobank, e-Tranzact, FET, Fortis Mobile Money, GTBank Mobile Money, M-Kudi, Monitise, Pagatech, Paycom and UBA/Afripay. Full licenses are to be granted pending the rectification of certain problems encountered during the pilot phase. A further 8 operators have been issued approvals-in-principle to carry out pilot programmes. The full launch of m-payments commenced by December 2011, but progress has been relatively slow.


Telecommunications Infrastructure and Penetration

Between 2006 and 2011, deployment of microwave telecommunications links increased from under 40,000 km to almost 170,000 km; fibre optic links increased to over 20,000 km; and the number of base stations nationwide increased to over 20,000. As at September 2012, overall tele-density approached 78% with well over 100 million telephone lines, and the telecommunications sector contribution to GDP rose to about 6% from below 1% in 2001 when the Digital Satellite Licenses (DSL-otherwise known as GSM) were auctioned.

Electric Power

A major constraint to the growth of electronic payments in particular, and technology deployment generally is Nigeria’s abysmal electricity supply conditions. The outlook here is however positive with ongoing unbundling and privatisation of generation and distribution presaging needed investment and better sector management. The transmission monopoly has also been concessioned to foreign managers, Manitoba Hydro of Canada.

Year Targeted Capacity Actual Capacity

2011 9,767 MW (Power Road Map) 3,806.1 MW (CBN)

2012 11,879 MW (Power Road Map) 4,200 MW approx (FGN)

2013 14,218 MW (Power Road Map)

2020 40,000 MW (Vision 2020) Sources: 1. CBN Annual Report 2011

2. Nigeria Power Sector Road Map

3. Federal Government of Nigeria

Regulatory Environment of e-Payments in Nigeria

Policy Development

The Central Bank of Nigeria (CBN) and other financial sector, ICT and payments system stakeholders have collaborated since 1993 to advance the Nigerian payments system:-

Implementation of Magnetic Ink Character Recognition (MICR) 1993 Establishment of Nigerian Inter-Bank Settlement System (NIBSS) 1994 Setting up of Technical Committees on Automation and Appointment of Consultant for

Nigerian Automated Clearing System (NACS) 1996-1997 Full implementation and live operation of NACS 2002 Reduction of clearing cycle to T+3 and T+5 for local and upcountry cheques respectively

2002 Guidelines on e-banking 2003 Establishment of Switching Companies and interoperability of/shared ATMs and POSs 2004 New Settlement Framework for Cheque Clearing 2004 Reconstituted National Payments System Committee and set-up of Technical sub-Committee

2005 Cheque Standard and Cheque Printer Accreditation Scheme 2006 Live run of CBN Inter-bank Funds Transfer System (CIFTS) 2006 Further reduction of local and upcountry clearing cycle to T+2 and T+3 2007 Development of Payments System Vision 2020 2007 Inauguration of Payments System Work Groups for Implementation of Vision 2020 2007 Payments Infrastructure and Strategy Committee (PISC) for coordinating work groups 2007 Harmonisation of local and upcountry clearing cycles to T+2 2008 Adoption of bulk payment of salaries 2008 Fed Govt. Adoption of e-payments to replace cheque payments 2009 Licensing of mobile money operators 2011 Limitation on cash withdrawal/payments 2011 Cashless Policy Pilot in Lagos 2012

“Cashless Lagos” Initiative

In a major push to encourage e-payments and other alternatives to cash, the CBN commenced a “Cashless Lagos” policy in Lagos State of Nigeria, as part of a wider shared services programme that seeks to achieve a 30% reduction in cost of banking services. Other objectives include increasing access, convenience and service levels across the industry; and integrating financial services into the economy. The CBN estimated the direct cost of cash to the financial system as N114bn ($718.75million @N160/$) as at 2009 and projected the figure to rise to N192bn ($1.2bn) in 2012. Cash-in-transit, cash processing and vault management costs make up 24%, 67% and 9% respectively of the total direct cost of cash. CBN data also indicates that pre-Cashless Lagos, cash constituted 85% of commercial payments in Nigeria. Apart from the direct cost, other costs include robberies and cash-related crimes; corruption and money laundering, non-financial sector costs of cash processing by all entities across the value chain; government revenue leakages; and inefficient treasury management. The CBN has recently announced that the cashless policy will be extended to Rivers, Kano, Anambra and Ogun States of Nigeria, and the FCT Abuja in June 2013.

Current Policy Environment

The current inclination of Nigeria’s central bank which is the predominant regulator in the sector appears to be to shape policy towards a Portuguese model in the mold of SIBS (Sociedade Interbancaria de Servicos-Interbank Services Company). SIBS was founded in 1983 and provides secure payment solutions including fully integrated cards, ATM and POS multi-system management (Visa, American Express, Mastercard etc), multi-vendor multi-application processing and security management to support ATM, POS, On-line and mobile transactions. The Nigerian vehicle envisaged by the CBN to play this role is evidently Nigerian Inter-Bank Settlements System (NIBSS) owned by the banks, discount houses and central bank, with its board chaired by a CBN Deputy Governor. NIBSS Plc was set up in 1993 and commenced operations in June 1994. NIBSS has put in place infrastructures for handling inter-bank payments, inter-bank funds transfer and settlements and operates the Nigeria Automated Clearing System (NACS) electronic funds transfer, Automated Direct Credits and Automated Direct Debits. NIBSS has acquired technologies for the operation of the Nigeria Central Switch (NCS). The other recent policy initiative from the CBN is the cancellation of the N100 charge levied by banks on ATM usage by customers of other banks with the objective of reducing cost of alternatives to cash. While these initiatives may be attractive from the user/cost perspective (since NIBSS has a shared services, rather than profit objective), one consequence may be to discourage private, entrepreneurial initiatives.

Current e-Payment Sector Conditions

According to the CBN, the number of card transactions increased from 114,592,000 in 2009 to 355,252,000 in 2011; the number of ATM transactions also increased from 109,161,000 to over 347,569,000 in the same period. Inter-bank transfers also increased from 69,300 to 492,900 while similar increases were recorded with regard to number of point-of-sale (PoS) and mobile payments.

Volume Thousands 2009 2010 2011

Cards 114,592 195,525 355,252

ATMs 109,161 60,133 347,569

Interbank Transfers 69.3 86.7 492.9

POS 918.2 1,072.4 2,100.6

Internet Payments 2,703 1,601 1,932.4

Mobile Payments 1,809 1,156 3,649.3 Source: CBN (2011)

With regard to the value of transactions, exponential growth has also been recorded as shown on the table below:-

Value N’Bn 2009 2010 2011

Cards 646.04 1,072.90 1,671.40

ATMs 548.60 399.71 1,561.74

Interbank Transfers 36,892 52,970.10 117,246.51

POSs 11.03 12.72 31.02

Internet Payments 84.15 25.05 59.61

Mobile Payments 1.27 6.65 18.98 Source: CBN (2011)

In 2012, based on (incomplete) data from the NIBSS Plc, both the volume and value of transactions witnessed remarkable growth:-

Jan-Dec 2012

Volume Value Notes

ATM 230,278,919 N1.182Trillion Excludes e-Tranzact, UPSL (Aug-Dec) & Interswitch (Sep-Dec)

PoS 2,587,595 N48.461Bn Industry volumes connected through NIBSS

Web 1,376,853 N15.024Bn Excludes e-Tranzact, UPSL (Aug-Dec) & Interswitch (Sep-Dec)

Mobile 716,995 N1.594Bn Excludes e-Tranzact and Interswitch (Sep-Dec)

NIP 449,654 N3.890Trillion Excludes e-Tranzact and Interswitch (Sep-Dec)

NEFT 28,941,559 N13.753Trillion Driven by NIBSS Source: Nigerian Inter-Bank Settlement System (2012)

Web Developments

In the last 2-3years, with rising internet penetration and changing lifestyles, on-line shopping appears to be finally taking off in Nigeria. A report by EuroMonitor International, a global market research firm, asserts that Nigerians spent N62.4billion on-line in 2011, up 25% from N49.9billion in 2010. According to the report (reported by Businessday Nigeria front page April 5, 2013) on-line adoption is rising as Nigeria’s internet users grew from 200,000 in 2000 to over 40 million by 2010. The report speculated that online shopping may rise to N150billion by 2014.

S/N Site visitor as a % of global internet users Average load

time ('seconds) 7 days 1 month 3months

1 Jumia 0.029 0.0362 0.0345 4.227

2 Amazon.com* 8.81 7.628 7.381 1.728

3 OLX Nigeria 0.0156 0.0179 0.0143 2.986

4 Wakanow 0.0125 0.012 0.0108 3.063

5 Dealdey 0.0113 0.0124 0.0128 4.426

6 Konga 0.0115 0.0103 0.0106 5.209

7 Kaymu 0.0046 0.0051 0.0047 2.043

8 Quickteller 0.006 0.007 0.0064 1.476

9 Private Property.com.ng 0.005 0.0046 0.0041 3.341

10 Delta-search* 2.292 1.639 0.776 1.799

11 Paypal* 2.09 2.235 2.279 3.284

12 Tradestable 0.0051 0.0042 0.0044 1.578

13 Netlog* 0.115 0.1137 0.1208 2.507

14 ASOS* 0.104 0.1116 0.1133 1.986

15 Amazon.co.uk* 1.028 1.031 1.07 1.555

16 Cobranet.org 0.0044 0.0035 0.00309 2.897

17 Online Nigeria 0.0053 0.0062 0.0067 5.031

18 Flickr.com* 1.029 1.063 1.151 1.402

19 e-Bay UK* 0.751 0.769 0.7837 1.94

20 Slotlimited 0.0014 0.0020 0.00216 3.041 Source: Alexa (2013)

Summary of RTC User Survey

A survey was carried out in five major Nigerian cities-Lagos, Abuja, Kano, Ibadan and Port Harcourt with 851 respondents completing survey questionnaires. 43.8% of respondents were aged 21-30 years; 27.8% aged 31-40 years; 11.7% aged 41-50 years; 10.7% aged below 20 years; and 6.5% were older than 50 years. A large percentage of respondents were students, traders, civil servants and bankers, and were mostly educated persons. Only 11.3% of respondents do not use electronic payments, with respondents carrying out transactions very often, often or at least

occasionally

The major e-payment mechanisms used are ATMs (78.9%).

The major difficulties users face are network (communication links between banks and e-payment infrastructure) issues, literacy, concerns on risks and unreliable machines.

On-line purchases are yet to become predominant and more than 50% of respondents agree that e-payments has influenced their consumption pattern through providing access to easier, faster, more transparent and less restricted transactions.

Respondents affirm that e-payments have contributed to employment generation in terms of transport/delivery, administrative/operational, ICT and production workers. The major challenges faced by users are network problems and service failures, slow transactions, perceived risk, power, long queues, frequent machine breakdown and awareness/literacy. Power, telecommunications, internet and transport infrastructure exert significant impact on service quality. 86.4% of respondents believe that e-payments increase sales, productivity and economic growth.

e-Payments Contribution to Economic Growth

Electronic and payment systems have developed significantly in recent years both globally and in the Nigerian financial and payments space. Officially government policy especially from the Central Bank of Nigeria (CBN) has sought to promote electronic payments and other non-traditional; non-cash based payment mechanisms in order to reduce the overwhelming cash based banking which predominates in the Nigerian banking system. The Nigeria banks and global payment companies, as well as other industry participants such as switch companies, ICT providers have also collaborated to deepen the electronic payments space in Nigeria. The question that arises from the point of view of policy however is whether there is any relationship between the development of retail payment markets and overall economic growth? And whether there are any positive effects, if any of electronic payments on trade and consumption. We sought by this research project to discover how and by how much, electronic commerce and payments could boost economic growth, trade and consumption in a developing country in general and Nigeria in particular.

The literature shows that existing research covers mainly developed economies. Few studies have focused on developing economies in analyzing the effects of electronic payment on economic growth. According to Lee and Ahn, e-commerce allows virtual companies deliver products to markets through their ability to organise and maintain business networks instead of traditional manufacture and delivery of products and services. They assert that e-commerce also facilitates trade at low cost across regional and national borders, and allow SMEs attract customer and supplier networks, and cut costs of service. Zwass defines e-commerce as “the sharing of business information, maintaining business relationships and coordinating business transactions through telecommunication networks” involving physical infrastructure, business infrastructure and business applications. A similar definition, “e-commerce involves using network communications technology to engage in a wide range of activities up and down the value chain both within and outside the organisation” is proffered by Applegate et al, while Kalakota and Whinston define e-commerce as “modern business methodology associated with the selling and buying of products and services through communication networks. They note the convergence of electronic messaging (e-mail), shared electronic digital libraries, electronic document interchange and electronic publishing. In terms of user behaviour (adoption and satisfaction), Oliver and Swan note that customer satisfaction arises when the purchasing experience and after-sales service meet his/her expectations and dissatisfaction is the result of discordance of expectation5. Silk and Kalwani introduce fairness and ease in the order process as a contributor towards customer satisfaction6, while Davis adds two constructs-perceived usefulness and perceived ease of use7.

Based on these and other factors, Lee and Ahn (op cit) develop two models:-

An e-Commerce Customer Decision-Making Model, And an e-Commerce Satisfaction Model that explains satisfaction

These models are consistent with the findings from our Nigerian user survey.

In theory, there are multiple channels through which electronic payments may foster increased economic activity-more efficient payment systems could improve banking sector performance and efficiency, thus increasing the availability of resources and supporting lending, investments and growth. Berger (2003) argues that technological advances in the financial system, including internet banking, electronic payments technologies, and information exchanges (much of which have advanced significantly in Nigeria in the last five (5) years) may increase productivity through improvements in bank services. Berger further tests this proposition empirically and finds that switching from paper to electronic payments reduces the costs of banks back-office activities, thus reducing banks operating costs. He thus confined significant effects in terms of productivity gains and economies of scale in the context of the US Economy.

Humphrey et al (2006) claim with some support, that if a country shifts from all paper based to fully electronic- based payment systems, and substitutes branch offices with ATMs, annual savings can reach 1% of GDP! Hassan et al (2012) also demonstrates that technological improvements in payments systems show benefits not only in terms of bank operating costs, but also in terms of revenue as well. Hassan et al indeed provide evidence, based on retail payments data for all 27 European Union member states from 1995 to 2009, that migration to efficient electronic retail payment systems has a positive effect on GDP, consumption and trade, and that this relationship is strongest for card payments. They find also that proliferation of ATMS has a positive impact on GDP and trade and provide evidence that integration and harmonization of retail payment markets foster trade and consumption, thus benefiting the whole economy. Based on research contextualised in a developing economy-Egypt, El Gawadi argues that the impact of e-commerce on developing countries could be even stronger than on developed countries because the scope for reducing inefficiencies and increasing productivity is much larger in developing countries11. His conclusion is that e-commerce could be an important tool for development by cutting costs, increasing efficiency and reducing time and distance.

The Central Bank of Nigeria (CBN) notes that the volume and value of electronic card transactions increased significantly from 195,525,568 and N1,072.9billion in 2010 to 355,252,201 and N 1,6714.4 billion in 2011, an increase of 81.5% and 55.8% respectively. ATMs account for 97.8%, followed by web-payments (1%), POS and mobile payments (0.6%) in terms of volume. In value terms, ATMs accounted for 93.4%, web (3.5%), POS (1.9%) and mobile (1.2%). The CBN’s policy of promoting electronic cards and channels is driven by the objectives of reducing banking industry costs by 30 percent. It estimated the total direct cost of cash management in the Nigerian banking Industry as N114.5billion ($715.6million) as at 2009, with cash in transit costs (24%), cash processing cost (67%) and vault management costs (9%). The CBN projects the direct cost of cash to reach N192bn by 2012. The CBN projects numerous benefits including enhanced tax revenue, increased economic growth, increased financial inclusion, reduced robberies and cash-based fraud, reduced operating costs for banks, increased payments system efficiency and increased banking penetration.

Estimate of Economic Impact of e-Payments Over Five Years

2012 2013 2014 2015 2016 2017

Direct cost of Cash for Financial Sector (N'Millions) 192,000 200,640 202,700 196,900 193,700 189,100

Indirect Cost to Value Chain (N'Millions) 28,800 30,096 30,405 29,535 29,055 28,365

Total Cost of Cash Management 220,800 230,736 233,105 226,435 222,755 217,465

Cost of Cash Savings for Financial Sector 19,200 39,696 119,706 59,070 58,110 56,730

Cost of cash savings on Value Chain 2,880 5,954.40 17,955.90 8,860.50 8,716.50 8,509.50

Total savings from cost of cash 22,080.00 45,650.40 137,661.90 67,930.50 66,826.50 65,239.50

Savings from Agric E-wallet Scheme 30,240 31,449.60 32,707.58 34,015.89 35,376.52 36,791.58

Employment generation (N'Millions) 23,222.78 69,668.35 92,891.13 139,337.00 92,891.13 46,445.57

Additional Domestic Trade (N'Millions) 508,713 446,695 509,139 616,293 755,464 932,052

Imports (N'Millions) 137,844 100,325 174,873 224,811 263,943 290,480

Exports 0 0 0 0 0 0 Corruption and Crime (N'Millions) 508,725 516,800 516,800 516,800 516,800 516,800

Increased Taxation 194,068.00 160,933.00 206,431.00 260,940.00 308,994.00 375,163.00 Total Economic Impact of E-Payments 1,424,892.78 1,371,521.35 1,670,503.61 1,860,127.39 2,040,295.15 2,262,971.65Gross Domestic Product (GDP) @ Market Prices 40,544,099.94 44,070,791.90 47,155,747.40 50,456,649.70 53,988,615.10 57,767,818.20 Economic Impact/GDP (%) 3.5 3.1 3.5 3.7 3.8 3.9

Source: Authors’ computation

Assumptions

• Direct cost of cash for 2012 is provided by CBN and is projected forward based on its relationship with the growth rate of currency in circulation (CIC) and moniness of the economy (measured by CIC/GDP)

• 15 percent of direct cost of cash for financial sector is assumed to constitute indirect cost to value chain. These include cash processing, pilferage, transportation and carrying cost.

• Our assumption on the savings for financial sector and value chain are based on 30% target of the Central Bank of Nigeria (CBN) as financial sector cost reduction spread over 3 years in year 1; and 2 years in year 2.

• The savings from agricultural sector E-wallet scheme is attributed to the Federal Ministry of Agriculture as reported by Businessday, Tuesday 02 April 2013. This was projected to grow based on the growth rate of the agriculture sector of 3.97%.

• On additional domestic trade, 2.5% of domestic merchandise trade projections from the National Bureau of Statistics was adopted for the period of study.

• The impact of e-payments on export is assumed to be insignificant. • Non-Oil Import (NOI) was used as a measure of the impact of e-payment on imports

with 2.5% attributable to e-payments • Savings from corruption and crime is calculated based on the global financial integrity

report of 2012. The report estimated the cumulative value of illicit financial flows over a decade in Nigeria at $129 billion and an average of $12.9billion per year.

• Based on the above, the study assumed 25% of $12.9 billion was saved due to e-payments.

• Exchange rate used in the estimation for 2012 is N157.5 to $1 while N160 to $1 was used for 2013-2017.

• On increased taxation, our assumption was based on non-oil revenue of the government with 7.5% growth due to e-payments.

• The estimation on employment generation was based on the National Bureau of Statistics report on National Employment Generation Survey.

• The study adopted an average monthly pay of N60,000 per additional employed persons through e-payments based on sectors shown below.

Employment per Sector

Source: NBS (2010)

Employment Generated Through E-Commerce/E-Payments

S/N Sectors % Job Gains % Job Loss % Net Job

Gains Total

Employment

E-Payment Generated

Employment

1 Agriculture, Forestry and Farming 1 0.5 0.5 14,837,693 74,188

2

Wholesale and Retail Trade, Repair of Motor Vehicles and

Motorcycles 5 2.5 2.5 12,097,189 302,430

3 Manufacturing 2.5 2 0.5 5,337,000 26,685

4 Other Service Activities 0 1 -1 3,471,702 (34,717)

5 Accommodation and Food Services Activities 2 0.5 1.5 2,730,308 40,955

6 Transportation and Storage 5 1 4 2,009,183 80,367

7 Education 5 1 4 1,557,665 62,307

8 Construction 0 0 0 1,142,569 -

9 Administrative and Support Service Activities 5 2.5 2.5 986,480 24,662

10

Public Administration and Defense, Compulsory Social

Security 2 1 1 800,333 8,003

11 Professional, Scientific and Technical Activities 5 0 5 779,209 38,960

12 Human, Health and Social Work 1 2 -1 739,936 (7,399)

13

Activities of Household as Employers, Undifferentiated

Goods 0 0 0 551,353 -

14 Information and Communication 7.5 2.5 5 469,513 23,476

15 Arts, Entertainment and Recreation 2.5 1 1.5 390,275 5,854

16 Financial and Insurance Activities 5 7.5 -2.5 171,403 (4,285)

17 Electricity, Gas Steam and Air Conditioning Supply 5 1 4 152,610 6,104

18 Mining and Quarrying 0 0 0 146,488 -

19

Water Supply, Sewage, Waste Management and

Remediation Activities 0 2.5 -2.5 86,778 (2,169)

20 Activities of Extraterritorial Organisations and Bodies 0 0 0 75,633 -

21 Real Estate Activities 0 0.5 -0.5 68,697 (343)

22 Total 1,292,471 647,394 48,602,017 645,077 Source: Authors’ computation

Conclusions and Recommendations

Our analysis and projections show that electronic payments could have as high as 3.1% of GDP economic impact in 2013, rising to 3.9% by 2017. This impact is largely from increased employment, savings from corruption, higher imports/domestic trade, savings from the government’s agricultural e-wallet scheme, financial sector savings from cash management, and non-financial sector substitution for cash.

We also find that over a 5 year period, electronic payments can be expected to generate almost 1.3million new jobs, while eliminating about 647,394 others, leaving net job gains of 645,077.

Our specific recommendations are:-

1. A critical constraint is infrastructure, especially power, telecommunications and internet. Industry stakeholders will have to join hands with other stakeholders in improving this infrastructure.

2. The banks, switching companies, card companies etc. must work towards improving equipment quality and standardization, as well as maintenance.

3. The banks must improve service quality and customer responsiveness in cases of lost or stolen cards, frauds, and other customer complaints in relation to e-payments.

4. There is significant need for public education and awareness on the benefits of e-payments. 5. All stakeholders must strengthen system security and integrity to prevent/reduce frauds and errors

to improve public confidence in e-payments. 6. There is additional need for ensuring ease of use, and customer interactive features in ATMs,

PoSs, mobile and on-line shopping systems. 7. All stakeholders should explore the possibility of using pidgin English and/or major local

languages in addition to English on ATMs, POS terminals and online transactions. 8. The government at all levels (federal, state and local) as well as private sector institutions should

continue the trend of making all salary and expenses payments through secure, automated platforms.

9. All stakeholders must invest resources in electronic fraud detection, forensic investigations and audit, and building the capacity of security and law enforcement institutions, revenue agencies and financial institutions in e-security.

10. The CBN should steadily continue to expand the coverage of the “cashless” policy until it covers the whole country.

11. The government of Nigeria should deal with crime, insecurity and terrorism, which inhibit economic activity generally, and e-payments in particular.

12. The CBN and banks must work with other stakeholders to ensure the wide pervasiveness of ATMs, PoS terminals, mobile payment infrastructure and internet availability towards bringing e-payments closer to current and prospective users.

13. We also recommend economy-wide investments in human capital, and competences to support technology and e-payments including engineering, science and technology, software and programming, logistics management and data systems processing.

14. We believe that the private and public sectors should explore and leverage opportunities for Public-Private Partnerships (PPPs) as an important mechanism for developing and realizing the huge potentials in electronic payments. Such PPPs will take advantage of domestic and global skills, knowledge and technology relating to e-payments as well as private capital and combine

same with the public sector’s national economic growth and developmental objectives to produce win-win outcomes for all stakeholders.

15. Finally there is a need for careful and constant monitoring of sector developments and stakeholder consultation in order to fine-tune policy where results diverge from desired effects.

References

Alexa. 2013. http://www.alexa.com/topsites Applegate LM, Holsapple CW, Kalakota R, Radermacher FJ, and Whinston AB. 1996. Electronic Commerce: Building Blocks of New Business Opportunity. Journal of Organisational Computer, Electronic Commerce 6(1): 1-10 Berger AN. 2003. The Economic Effects of Technological Progress: Evidence from the Banking Industry”. Journal of Money, Credit and Banking. Central Bank of Nigeria (CBN) Annual Report 2011 Central Bank of Nigeria (CBN) Stakeholder Engagement Session on New Cashless Policy: Cashless Lagos Implementation. Davis FD. 1989. Perceived Usefulness, Perceived Ease of Use, and User Acceptance of Information Technology. MIS Quarterly 13(3): 319-340 Dongwon Lee, and Joongho Ahn. 2001. Consumer Adoption and satisfaction with E-Commerce-A Cross-Country Study. El Gawadi ZM. 2005. The Impact of E-Commerce on Developed and Developing Countries: A Case Study of Egypt and United States. Hassan I., T. De Renzis, and Schmiedel H. 2012. Retail Payments and Economics Growth” Discussion Paper 19, Bank of Finland. Humphrey D.B., Willesson M., BergendahI G. and Lindblom T. 2006. Benefits from a Changing Payment Technology in European Banking. Journal of Banking and Finance 30(6): 1631-1652 Kalakota R, and Whinston AB eds. 1996. Frontiers of Electronic Commerce. Addison-Wesley National Bureau of Statistics (NBS) 2013. Economic Outlook for the Nigerian Economy (2013-2016) National Bureau of Statistics (NBS) 2010. National Manpower Stock and Employment Generation Survey Nigerian Inter-Bank Settlement System (NIBSS) 2012. Cashless POS Survey, Lagos. Oliver RL and Swan JE. 1989. Equity and Disconfirmation Perceptions as Influences on Merchant Product Satisfaction. Journal of Consumer Research 16(3): 372-383 Silk AJ, and Kalwani MU. 1982. Measuring Influence in Organisational Purchase Decisions. Journal of Marketing Research 19(2): 165-181 Zwass V. 1996. Electronic Commerce: Structures and Issues. International Journal of Electronic Commerce 1(1): 3-23

Appendix

Electronic Payments and Economic Growth in Nigeria

Survey and Data Analysis

Analysis of Distribution and Retrieval of Questionnaires

Regional Distribution, Lodgment and Retrieval Analysis

No Regions Lodgment Retrieval % Response

1 Ibadan 200 159 79.5

2 PH 200 175 87.5

3 Kano 200 140 70

4 Abuja 200 171 85.5

5 Lagos 250 206 82.4

TOTAL 1050 851 81.0

Distribution Analysis of Questionnaires

Summary of Analysis of Distribution

The pattern of lodgment and retrieval of questionnaires in accordance with regions is presented in the previous slide and discussed below. A total of 1050 questionnaires where lodged across various regions, out of which 851 were completed and retrieved, representing 81% retrieval rate. Out of the 1050 questionnaires administered 200 each were distributed to Ibadan, PH, Kano and Abuja while 250 was allocated to Lagos. This represents 19% each of the total administered questionnaires allocated to Ibadan, PH, Kano and Abuja while Lagos received 23.8% of the total. The numbers of questionnaires retrieved from Ibadan, PH, Kano, Abuja and Lagos are 159, 175, 140, 171 and 206 respectively. This represents a retrieval rate of 79.5% for Ibadan, 87.5% for PH, 70% for Kano, 85.5% for Abuja and 82.4% for Lagos. This is consistent with open enthusiasm displayed during the conduct of the survey.

Age Analysis

Gender Analysis

Occupation Analysis

Age

90 10.6 10.7 10.7364 42.8 43.3 54.0234 27.5 27.8 81.8

98 11.5 11.7 93.555 6.5 6.5 100.0

841 98.8 100.010 1.2

851 100.0

<20 years21-30 years31-40years41-50yearsAbove 50yearsTotal

Valid

SystemMissingTotal

Frequency Percent Valid PercentCumulative

Percent

Gender

446 52.4 56.1 56.1349 41.0 43.9 100.0795 93.4 100.056 6.6

851 100.0

MaleFemaleTotal

Valid

SystemMissingTotal


Percent

Occupation

285 33.5 33.8 33.8167 19.6 19.8 53.6166 19.5 19.7 73.2

83 9.8 9.8 83.1143 16.8 16.9 100.0844 99.2 100.0

7 .8851 100.0

StudentMarket TraderCivil ServantBankerOthersTotal

Valid

SystemMissingTotal


Percent

Education Analysis

Income Analysis

Summary of Demographics

Most of the respondents surveyed are young people between the ages of 20-40 years. More than 70% of the respondents belong to this category. The gender classification of the respondents showed that majority of them are male. 52% of the respondents are male while 41% are female. Majority of the respondents are students. 33.5% of the respondents are students, market traders and civil servants accounted for almost 20% each while Bankers constitute 10% of the respondents. Others include IT workers, Teachers, Medical Personnel, Manufacturing sector employees etc. The educational background of the respondents showed that 62% of the sampling population have a maximum of either Bachelors/Higher National Diploma or Postgraduate education. This shows that majority of the respondents are learned and have the potential to use e-payments. The monthly income of 36.4 per cent of the total respondents fell between N18,000-N50,000 ($1= N155.8), 21.5 per cent earned below N18,000 while 18.4 per cent of the respondents earned between N50,000-N100,000. Almost 9% and 4.3% of the respondents make between N100,000-N200,000 and above N200,000 respectively.

Educational Background

24 2.8 2.9 2.9155 18.2 18.9 21.8470 55.2 57.2 79.0

58 6.8 7.1 86.0115 13.5 14.0 100.0822 96.6 100.0

29 3.4851 100.0

PrimarySecondaryBSc/HNDPost GraduateOthersTotal

Valid

SystemMissingTotal


Percent

Monthly Income Level

183 21.5 24.0 24.0310 36.4 40.7 64.7157 18.4 20.6 85.3

75 8.8 9.8 95.137 4.3 4.9 100.0

762 89.5 100.089 10.5

851 100.0

<N18000N18000-N50000N50000-N100000N100000-N200000>N200000Total

Valid

SystemMissingTotal


Percent

Frequency of e-Payment Activities

e-Payment Transaction Types

Ease of Usage

What is the frequency of your e-payment activities?

106 12.5 12.7 12.7264 31.0 31.7 44.4370 43.5 44.4 88.794 11.0 11.3 100.0

834 98.0 100.017 2.0

851 100.0

Very oftenOftenOccasionallyNot at allTotal

Valid

SystemMissingTotal


Percent

Frequency Percent Valid Percent

Valid ATM 653 76.7 78.9

Web 122 14.3 14.8

Mobile 83 9.8 10.0

POS 146 17.2 17.7

Total 827 97.2 100.0

Missing System 24 2.8

Total 851 100.0

Do you find the usage of any of these easy?

730 85.8 90.1 90.180 9.4 9.9 100.0

810 95.2 100.041 4.8

851 100.0

YesNoTotal

Valid

SystemMissingTotal


Percent

Reasons for Difficulties

Online Purchases

Visits to Online Stores

Reasons for difficulty in the usage of e-Payment instrument

30 37.5 39.5 39.516 20.0 21.1 60.513 16.3 17.1 77.6

17 21.3 22.4 100.0

76 95.0 100.04 5.0

80 100.0

Network IssuesilliteracyPerceived RiskUnreliable paymentmachinesTotal

Valid

SystemMissingTotal


Percent

Have you procured any goods online?

197 23.1 23.6 23.6639 75.1 76.4 100.0836 98.2 100.0

15 1.8851 100.0

YesNoTotal

Valid

SystemMissingTotal


Percent

How many online stores do you visit in a month?

596 70.0 72.2 72.2193 22.7 23.4 95.5

24 2.8 2.9 98.49 1.1 1.1 99.54 .5 .5 100.0

826 97.1 100.025 2.9

851 100.0

None1-56-1011-15Over 15Total

Valid

SystemMissingTotal


Percent

Influence of e-Payments on Consumption Pattern

Has e-payment influenced your consumption level or pattern?

445 52.3 55.8 55.8352 41.4 44.2 100.0797 93.7 100.0

54 6.3851 100.0

YesNoTotal

Valid

SystemMissingTotal


Percent

How has e-Payment influence your consumption level or pattern

99 22.2 39.9 39.944 9.9 17.7 57.771 16.0 28.6 86.3

17 3.8 6.9 93.1

17 3.8 6.9 100.0248 55.7 100.0197 44.3445 100.0

Ease of usageTransparencyFast transactionUnrestrained accessto cashPerceived usefulnessTotal

Valid

SystemMissingTotal


Percent

Why has e-Payment not influenced your consumption level or pattern?

55 15.6 41.7 41.724 6.8 18.2 59.834 9.7 25.8 85.619 5.4 14.4 100.0

132 37.5 100.0220 62.5352 100.0

EligbilityLack of TrustPerceived RiskilliteracyTotal

Valid

SystemMissingTotal


Percent

Savings from Online Purchases

Contribution to Employment

Do you save any cost visiting and buying from any of these online markets?

171 20.1 27.8 27.8444 52.2 72.2 100.0615 72.3 100.0236 27.7851 100.0

YesNoTotal

Valid

SystemMissingTotal


Percent

Does online market contributes towards employment?

356 41.8 52.4 52.4323 38.0 47.6 100.0679 79.8 100.0172 20.2851 100.0

YesNoTotal

Valid

SystemMissingTotal


Percent

Savings made from online activities in the last one month (in monetary terms)

63 36.8 39.4 39.442 24.6 26.3 65.628 16.4 17.5 83.118 10.5 11.3 94.4

9 5.3 5.6 100.0160 93.6 100.0

11 6.4171 100.0

<N5,000N5,000-N10,000N10,000-N20,000N20,000-N30,000>N30,000Total

Valid

SystemMissingTotal


Percent

Type of Employment Created

Influence of Income on e-Payment Volumes

Influence of Education on Use

Employments created from e-Payments activities

42 25.5 30.7 30.7

29 17.6 21.2 51.828 17.0 20.4 72.3

38 23.0 27.7 100.0

137 83.0 100.028 17.0

165 100.0

Deliveryservices/TransportICTManufacturing/ProductionAdministration/StoreoperatorsTotal

Valid

SystemMissingTotal


Percent

Does your income level have influence on the volumes of e-paymenttransaction done by you?

506 59.5 67.4 67.4245 28.8 32.6 100.0751 88.2 100.0100 11.8851 100.0

YesNoTotal

Valid

SystemMissingTotal


Percent

Does your educational background influence the use of e-payment?

495 58.2 63.1 63.1289 34.0 36.9 100.0784 92.1 100.0

67 7.9851 100.0

YesNoTotal

Valid

SystemMissingTotal


Percent

Incidence of Fraud

Challenges Faced

Have you recorded any fraud in the activities carried out on your e-paymenttransactions?

86 10.1 10.8 10.8711 83.5 89.2 100.0797 93.7 100.0

54 6.3851 100.0

YesNoTotal

Valid

SystemMissingTotal


Percent

Do you face any challenges in your e-payment transactions?

238 28.0 30.2 30.2551 64.7 69.8 100.0789 92.7 100.062 7.3

851 100.0

YesNoTotal

Valid

SystemMissingTotal


Percent

Impact of Infrastructure

Does the current state of infrastructures promote e-business in Nigeria?

419 49.2 58.6 58.6296 34.8 41.4 100.0715 84.0 100.0136 16.0851 100.0

YesNoTotal

Valid

SystemMissingTotal


Percent

Contribution to Sales, Productivity and Economic Growth

Do e-payments contribute to increase sales, productivity and economicgrowth?

639 75.1 86.4 86.4101 11.9 13.6 100.0740 87.0 100.0111 13.0851 100.0

YesNoTotal

Valid

SystemMissingTotal


Percent

Electronic Payments and Economic Growth in Nigeria...E-Payments and Economic Growth The Central Bank of Nigeria (CBN) notes that the volume and value of electronic card transactions

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