THE ASSESSMENT OF CONSUMER PREFERENCE BETWEEN HUMAN AIDED SERVICE AND SELF SERVICE TECHNOLOGY IN NIGERIA.

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THE ASSESSMENT OF CONSUMER PREFERENCE BETWEEN HUMAN

AIDED SERVICE AND SELF-SERVICE TECHNOLOGY IN OSUN STATE,

NIGERIA

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ATANDA WAZIRI IBRAHEEM

MAC/2010/092

MAY, 2015

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CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Being very vital for companies to serve the customer effectively and make them more

satisfied with their offerings, technology increasingly playing a major role for companies

in delivering the services to the customers within less time and at a lower cost.

Technology-based self-services like ATMs, ticket vending machines, parking

machines will be very crucial for the companies and even to the customer to have the

services very easily and efficiently. But in other hand before companies get advantages

from these self-service technologies, they have to pay attention about the consumer

preferences. Are the consumers/customers willing to adopt self-service technology rather

than human aided services?

Dabholkar (1996) in his study revealed that customer general attitudes towards

using technology and customer need for interacting with a service employee had a

significant impact on expected service quality and the intention to try new technology-

based self-service options. For a long time, academic service-quality research has

investigated the characteristics and dynamics of the personnel-based self-service from the

perspective of perceived service quality nearly as much (Dabholkar, 1996). We need to

know more about the interaction between customer and technology to perceive service

quality. If we take dabholkar’s 1996 study into consideration, empirical research has so far

been limited to examining customers’ expectations and intentions to use a technology-

based service option that they have never tried; no one has looked at customer evaluations

based on actual experience overtime, which is the traditional way to investigate service

quality.

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Service is somewhat problematic to define and even today there is no clear or common

definition of service to fall back on in every case. The word service includes industrial

service sector and public service sector offers, both of them are intangible in offerings. A

service is an activity or series of activities of more or less intangible nature that normally,

but not necessarily take place in interactions between the customer and service employee

and/or physical resources or goods and /or systems of the service provider which are

provided as solutions to customer problems (Gronroos, 1990). Services constitute an

important part of the economy of the industrialized countries, in both production and

consumption. The national accounts commonly refer to the private service sector as

trade/retailing, consumer service, transportation and communication, consultant services,

banks and insurance, hotel and restaurants, and real estate. Referring to this development,

researchers from various area of business administration have stressed the need for more

research in this part of the economy. A service is an activity or a series of activities that

take place in interactions with a contact person or a physical machine which provides

customer satisfaction (Gronroos, 1990). According to Toffler (1982: 1990)

industrialization refer to ever growing service sector. Toffler says that logic of

industrialization as seen as different sectors of the economy converted from human

workforce to machine as inputs of productions.

In the continuously growing service sector, customers’ involvement in production

process even in the industrial service sector and to delivery for him/herself, so called self-

service. The implementation of machines and self-service go hand in hand, so we see part

of the main characteristics in service changing from human aided based person to person

to technology-based self-service. This will lead to total consumer satisfaction with high

quality in delivering the services to customers will make them loyal for the company, in

other words as it stated by “the best companies of the future will be those who find ways

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of developing services to create and keep customers and thereby sustain a competitive

advantage.” (Vander Merwe and Rada, 1988).

This study tries to contribute to provide better understanding about the technology

based self-service especially ATMs with a customer perspective, based on previous

literature reviews and theories. We describes mainly technology, advances in technology,

interaction with technology, self service delivery, perceived service quality, customer

involvement and factors explaining the customers’ attitude towards technology-based self-

service to enhance service quality.

Self-service technology is challenging the notion that provider-client interaction is an

essential feature of service marketing. Nowadays automated teller machine services

(ATMs) are widely used by the customers rather than human-aided banking services. In

the starting period, ATMs were used only for cash withdraw purpose without concern of

bank timings but presently, the scenario changes rapidly, more banking operations like

withdrawing, transferring, and checking accounting balance can be carried out with

ATMs. Customers are saving time and money with the use of ATMs. Even most of the

financial organisations are using the ATMs to serve customers more effectively and in a

timely manner in a way to cut down their production cost which will be beneficial for the

organisations and customers.

ATMs first came in 1968, Don Wetzel was the co-patentee and chief conceptualist

of the automated teller machines (ATMs), an idea he thought of while waiting at a Dallas

bank. At the time Wetzel was the vice president of product planning at Docutel, the

company that developed automated baggage-handling equipment. The other two inventors

listed on the patent were Tom Barnes, the chief mechanical engineer and George Chastain,

the electrical engineer, it took five million dollars to develop the ATMs.

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The concept of ATM first began in 1968 the networked ATM was pioneered in the US, in

Dallas, Texas, by Donald Wetzel, who was a department head at an automated baggage-

handling company called Docutel. Recognized by the United States Patent Office for having

invented the ATM network are Fred J. Gentile and Jack Wu Chang, under US Patent #

3,833,885. On September 2, 1969, Chemical Bank installed the first ATM in the U.S. at its

branch in Rockville Centre, New York. The first ATMs were designed to dispense a fixed

amount of cash when a user inserted a specially coded card. A Chemical Bank advertisement

boasted "On Sept. 2 our bank will open at 9:00 and never close again. Chemical's ATM,

initially known as a Docuteller was designed by Donald Wetzel and his company Docutel.

Chemical executives were initially hesitant about the electronic banking transition given the

high cost of the early machines. Additionally, executives were concerned that customers

would resist having machines handling their money. In 1995, the Smithsonian National

Museum of American History recognized Docutel and Wetzel as the inventors of the

networked ATM.

1.2 Statement of the Problem

As the world continues to get increasingly dependent on technology, the self-service

technology based environment continue to grow at alarming rate, especially with the

emerging globalization. Consumers get tightly agglunitized to self-service banking most

especially automated teller machine instrument in such an efficient way. Self-service

technology continues to whittle down the amount of money in circulation in UK and USA to

4% and 9% respectively (Ovia, 2005) whereas in Nigeria, 90% of the money in circulation or

#545.8 billion (CBN 2004) still persists.

The unheeding adherence to cash payment transaction rather than joining the global

phenomenon of getting business transactions operationalized through the self-service

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technology leads to series of problem in Nigeria and other developing countries. Such

problem include defacement, rendalization and disfigurement of “paper currency”. The

transfer of cash in currency is saddled with such risks and inconveniences. Safety of carriers

of huge amount of money may not be guaranteed, more so in a pauperized, corrupt and

inefficient transportation (system) society. When there is large money in circulation, the

possibility of money laundering putting fake and counterfeit money in circulation is very

high. Similarly, the wait-in-line options while queuing up to pick money in bank may be a

harrowing experience as much time will be wasted.

Though there have been various scholastic works on the theme of technology based self-

service particularly with respect to technological innovations like automated teller machine

(ATMs), electronic banking, online transactions in which high cost of operation has led many

firms to examine the delivery option that allows customers to perform service for themselves.

The benefits of self service delivery option are evident in terms of productivity and cost

saving for most banks (chase, 1978; love-lock and young, 1979; Mills and Moberg, 1982;

Schneider and Bowen, 1985). Yet little is known about consumer preference for such options

particularly those based on technology in Nigeria, hence this study.

1.3 Research Questions

The focus of this study is to assess the consumer preference between human aided services

and automated teller machines ATMs in Nigeria. Hence in the course of the study efforts

have been made to find solutions to the following problems;

i. What is the relationship between self-service technology and socio economic

strata of the consumers?

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ii. What are the factors influencing the substitution pattern between human aided

service and self-service technology?

iii. How does automated teller machines (ATMs) serve as a method of behavioral

restraints?

1.4 Objectives of the Study

The broad objective of the study, therefore is to assess the consumer preference

between human aided service and self-service technology in Nigeria. The specific objectives

are to

i. Examine the impact of demographic and socio economic characteristics on the use

of automated teller machines.

ii. Investigate the substitution patterns between human aided service and self-service

technology.

iii. Appraise the extent to which automated teller machine serve as a method of

behavioral restraints.

1.5 Research Hypothesis

In order to attempt the research objectively, a research hypothesis was formulated

which the researcher wishes to establish or disprove on some specific ground.

Ho1: There is no significant difference between the consumer substitution pattern of users of

self-service technology and non-users of self-service technology.

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1.6 Justification of the Study

Safe and efficient payment system are major precondition for financial stability and

economic prosperity in a country. (Nicole, 2005).

Some of the major criteria for a stable financial system are the existence of efficient markets

and financial instruments as well as efficient payments and settlement systems. A well-

functioning payment system is of primary importance especially in the implementation of

monetary policy. Nnanna and Ajayi (2005) have identified the problems of cash transactions

for individuals, corporate bodies and the macro economy at large. The problem include

insecurity (armed robberies), high cost of operations, and handling of notes, mutilation and

currency counterfeiting.

1.7 Definition of Terms

Behavioral Restraints- The tendencies to spend with caution. ATMs helps families to plan

and manage their finances, pay their bill on time with ease of access. It encourage consumers

to be more discipline and prevent over spending.

Electronic payment- a payment system that enable funds to be transferred electronically

(automatically) between individuals, financial institutions and government sectors.

Payment System- the process whereby exchange of monetary value is achieved through

payment instruments. It refers to a set of instructions and procedures used for the transfer of

value and settlement of obligations arising from the exchange of goods and services within a

defined market (Ovia, 2005).

Payments System instruments- these are (1) currency or cash e.g. this includes bank notes

and coins, (2) paper based instrument are cheques, bank drafts, and travelers cheque, (3) the

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paper-less or electronic instruments are computer-based technology payment instruments like

automated teller machine (ATMs), automated clearing house (ACHs), point of sale terminals

(POS), internet payment and wire transfers.

Human Aided Services: Service delivered in the banking hall attended by human teller.

Service: Action or work that is produced, then traded, bought or sold, then finally consumed.

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CHAPTER TWO

LITERATURE REVIEW

2.1 Conceptual Review

This section examines the key issues such as historical evolutions of financial payment

system, electronic payment system, personnel based service delivery system, the current

innovation and development in payment system.

2.1.1 Financial Payment System

Historically, societies world over had used various means of exchange before the cash

and cheque system. Over decades, payment systems have passed through a lot of

transformation. In facts before 700 BC when cowries were introduced in Asia Minor, barter

remained the only medium of exchange. Trade was carried out by goods being exchanged for

other goods (barter) before money came to be used (Taiwah, 1978). Trade by barter

encountered some serious problems such as the problem of double coincidence of wants,

absence of common standards of value, problem of storage, indivisibility of some goods and

impossibility of standard of different payment.

In view of all these problems, money was developed as a medium of exchange.

However with the introduction of coin and notes, the era of cash as payment system emerged.

In A.D. 1000, first note appeared in china. This was later followed by the use of cheques as

written instructions to transfer precious metal coins from one holder to another. Thus the

period of barter was later succeeded by another system which featured the use of multiplicity

of coins and commodity money such as metal coins, cowries, brass and copper bracelets

(Nnanna and Ajayi, 2005).

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The notes and coins issued by the central bank of a country constitute the currency

and cash for that country. Currency is made up of a country’s notes and coins (e.g. Naira and

kobo in Nigeria). It is a means of payment that a debtor can legally compel his creditor to

accept. In Nigeria and other West African countries, greater use is made of currency than

cheques or other means of exchange (Ovia, 2005). The opposite is the case in the advanced

countries like Britain, USA, Germany and France where the use of cheques accounts for

about 90% in all business transactions (Ovia, 2005). It is usually argued that “money” is what

money does. In this sense, other instruments of credit like cheques, postal orders, money

orders, bill of exchange, and postal stamps are money. These are, however not “true money”

in Nigeria since they cannot be spent everywhere in their present forms.

The motivation behind the excessive desire to hold money, i.e. to keep one’s

resources in liquid form instead of investing it by Nigerians is of interest to economists. This

is because holding money involves loss of the interest it might otherwise have earned if it

were invested. Another consequence of holding liquid money may be looked at from the

security perspective. Among advanced reasons for this practice were ignorance, illiteracy,

and lack of appreciation of the merits of digital payment instruments which does not involve

the use, touch and transfer of liquid fund (Ovia, 2005).

Nigerians generally love carrying cash whether for domestic, social, and business

transactions. In tune with this high demand for cash, as opposed to other means of exchange,

the country’s financial institution especially banks have keep large sum of money to meet

these demands. Cash are being demanded by individuals, households, institutions, private and

public organisations and government establishments.

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Social miscreant and fraudsters over the year have studied Nigeria financial

transactions that are mainly cash-based and thus identified banks, financial institutions,

companies, churches, mosques and rich individuals as targets.

2.1.2 Electronic payment system

The next great age of payment system that followed paper instruction is electronic

payment i.e. self-service technology. A prominent feature of the age is plastic card which is

used to identify customers and convey information to machines to initiate a paper or

electronic payment (Patrick, 1995). In the late 1970s, various articles and books on the idea

of cashless society created a rash interest (David, 1982). The central theme of such writings

was the idea of a society without paper money but some form of plastic card as the payment

mechanism as enhanced by the information and communication technology (ICT). ICT is the

technology required for processing, making use of electronic computers and computer

software to convert, store, protect, transmit, and retrieve information.

The electronic payment system is a system that enables funds to be transferred

electronically between individuals, financial institutions, and government sectors (Amedu,

2005). It is an internet-based, online, real-time transaction, which operate on double entry

accounting principle. The electronic payment system is made possible by the existence of

electronic money (e-money), which can be defined as a stored value, or prepaid product in

which a record of the funds or value available to the consumer for multipurpose use is stored

on an electronic device in the consumer’s possession. Electronic money has also been defined

by the European monetary institute as an electronic store of monetary value on a technical

device including prepaid cards that may be widely used for making payments to entities other

than the issuers without necessarily involving bank accounts in the transaction but acting as a

prepaid bearer instrument.

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Thus in recent years, ICT has significantly affected the banking industry. Banks and

other financial institutions have improved their functions as financial intermediaries through

the adoption of new technologies (Chang, 2002; Gourley and Pentecost, 2002).

The rapid development in ICT especially through the internet has brought in its wake

a new world order in information and business management. The internet has affected

positively in no small measure, the way business were conducted globally by affecting

variables such as transaction costs, efficiency, completion time, price, transparency and

convenience. In the same manner, the payment medium has been modernized drastically to

support the new business culture through electronic means of settlement. It is clear that

emerging payment technologies provide huge opportunities to the business world, from

saving money to decreasing float, to improving cash flow (Amedu, 2005). The payment

system that Nigerians are currently accustomed to, most of which are cash and cheque

payments, are inefficient and increasingly becoming antiquated. We live in a technology-

driven world and its high time the Nigerian business community began to recognize the value

that new technology system deliver when it comes to delivery payment. In developed

economies, the continued expansion of payment options is a key factor in reducing frictions

and creating economic efficiencies. In developing and transitional economies like Nigeria,

electronic payment system can play a powerful role in modernizing financial systems,

creating economic transparency and contribute to greater predictability, liquidity and stability

if adopted in daily transactions.

According to (Ovia, 2005), the traditional “brick and mortar” banking is gradually

giving way to e-platform, which enables the offering of financial services through the

electronic media to various customers irrespective of place, time and distance. The

importance and need for digitization of the Nigeria payment system becomes imperative by

examining Bill Gate’s comment in his book, “business at the speed of thought” where he

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asserted that: “the successful companies (countries) of the next decades will be the ones that

use digital tools to re-invent the way they work. These companies will make decisions

quickly, act efficiently and directly touch their customers in positive ways. Going digital will

put you on the leading edge of a shock wave of change that will shatter the old ways of doing

business” (Gates, 2000).

The introduction of electronic cards in the early 1900s started with western union in

1914, and this represented a breakthrough in electronic payments. This payment initiative,

though, accepted by the few clientele of that particular period, was limited to their local

markets and in-store uses. In 1958, bank of America took a major step forward by

introducing the modern credit card. After series of test marketing, it became clearer that there

was a big market for the general-purpose bank credits featuring a revolving credit facilities

and wide acceptance. With the launch of bank’s card, the consumer no longer tied to one

merchant or to one product, but were free to make purchases at a wide range of outlets. The

demand for the bank product increased in merchant outlets and in banks. The potential size of

the market expanded and it marked a turning point in the history of money (Guardian

newspaper, July 21 2006).

The development of the modern electronic payment took an important step forward in

the mid-1970s with the creation of a global joint venture that was eventually known as visa.

Through shared investment, the visa association created a global system to authorize

transactions and settle electronic payments and to protect consumers, merchant’s cash and

cheque alike. A visa card could be used anywhere in the world. Two developments in the

1990s further broadened the electronic payment scheme, and e-commerce payments. The

efficiency and benefits of the electronic payment system cannot be overemphasized.

Electronic payments are at a critical threshold of growth and development.

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Amedu (2005) has described the growth in the development of electronic payment (e-

payment) in Nigeria financial sector as a veritable tool to save resources, provide better

services to customers, and increase profit to shareholders. If this recent trend is well

developed, he opined that banks will become less manual and more electronic, and cash

handling in physical form will become less fashionable. The concept of electronic banking

will assure a more compelling business for better efficiencies, speed, conveniences, and

security. These are the trend in more advanced economies of Europe and America where

credit/debit cards, ATM, telephone and internet banking are popular. Market for electronic

banking products will be very big as the “new age” consumers will continue to demand for

fast, efficient and convenient banking options.

Apart from the private sectors, other establishments such as government parastatals,

and ministries in line with the National Economic Empowerment Scheme (NEEDS) are

expected to embrace e-banking. The effect or implication of this is that with time, payment

for government services, utilities will be conducted by electronic means. According to Ovia

(2005), Nigeria can replicate the success of South Africa where tremendous progress has

been made in the use of digital money where an estimated 44 million people use debit/credit

cards about 40 million times daily. This is impressive and worth emulating. In South Africa,

cards are being put to use in various areas; salaries, pensions, car parks, post offices, cinemas,

and stadia. This wide use of e-payment products are accompanied with the use of hi-tech

security measures like biometric verification, which includes the electronic reading of

fingers, to check the incidences of fraud.

2.1.3 Human aided service delivery

Realising that service quality research is dominated by personnel-based service delivery, one

might question whether or not automated self-service can deliver excellent service quality.

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“And so long as this presumption reigns, service will forever be limited in efficiency,

reliability and quality” (Dabholkar, 1996). Nowadays it became very difficult for the

organisations especially for the front line employees to provide quality in delivering the

services by taken into consideration about the productiveness and efficiency at a time. As a

matter of fact, the front line employee who will serve as bridge between the customer and

organisation to produce revenue to the firm and also building relationship with the customer

and organisation to produce revenue to the firm and also building relationship with the

customers. Today it’s a big question for many organisations and even for the employees to

serve the customer with quality in a timely manner to make them satisfied with their

offerings.

2.1.4 Technology

During recent years, technology has become one of the key aspects for the organisations to

deliver their services. As the companies started giving importance to new technologies, lead

for the development of self-service technologies. In self-service technology, the word

technology is crucial because self-service are related with technological aspects where

companies have to strive on to improve their technological features that will increase the

quality level in delivering the services. “The ability to customize is one of the key benefits of

implementing technology into the delivery of services”. (Quinn, 1996 as referenced in Bitner,

brown and Meuter, 2000) the term “technology” need not refer to machines or equipment.

The term technology can be separated into (1.) Hard (2.) Hybrid (3.) Soft technologies

(Levitt, 1976).

Hard technology is physical technology that replace both manual labour and

brainpower is usually termed as automation.

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Hybrid technology is machines or equipment that manages, limits, and organise work

or services process in such a way that they can be performed faster and more

efficiently.

Soft technology in terms of techniques or organized ways of working that replaces

more ad hoc methods.

Norman (2000) offers five reasons for the service company to offer technology-based service

delivery:

1. To reduce costs

2. To control quality

3. To increase quality level

4. More direct customer connections

5. Technology as moderator of behaviour

Advances in technology

This has increase service delivery in recent years, with a tremendous impact both on

self-service options and on service support. Today, customers can choose between varieties

of technological options to perform services for themselves (Zinn, 1993). At the same time,

companies employ technology at various stages in the service delivery process and in service

support operations to improve the quality and productivity of their service offering

(Blumberg, 1994).

Advances in the technology has given new dimensions, internet permitted to access wide

range of self-service technologies (ATMs, internet banking, E-shopping, online auctions,

etc.).

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As these technological aspect are spreading over, moreover companies are also interested to

employ these technological dimensions because of potential cost savings and delivering the

products in an effective way will make big difference in increasing sales growth, as well as to

win the competition and also to make the customer satisfied with the offerings.

Interactions with technology

This highlights research in the human factor in computer interaction and what it can

tell us about user’s evaluations of computer environments similar to technology based self-

service systems. Companies employ technology at various stages in the service delivery

process and in service support operations to improve the quality and productivity of their

service offerings (Blumberg, 1994). In the present society, human interactions with

technology is getting more importance, as a result, most of the customers are willing to use a

technology based service offers. Customer interactions with technology growing day by day

enabled the importance of self-service technology for companies to deliver service rather than

personnel based service. These technological features will be the critical factor of interaction

between the customer and the organisation and technology is going to play important role for

the companies in their long run business.

Research in service delivery system as such is suitable point for describing technology based

self-service option but as this research area is purely management oriented, it allows for only

a very limited contribution to the assessment of consumer preference between human aided

service and automated self-service.

Toffler (1982) is only one of several social scientists who write that long term

development of a large part of the service sector inevitably moves towards an economy of

“presumption” or self-service meaning that customers performs more and more services for

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themselves. One trend is towards standardization and self-service-based companies and the

other towards customization and knowledge based companies.

Ever since the early service literature, some service researchers have thought industrialization

process is too slow arguing for faster industrialization of the service sector and better

utilization of technology. Quinn and Paquette (1990), Dabholkar (1994), Prendergast and

Marr (1994), Lovelock (1995) and Meuter and Bitner, (1998) suggest that technology has

especially impacted on service firms as the number of technological applications offered by

service provides is substantial and growing.

In other to suggest “principles” for when and how to depersonalized an technology based self

service delivery, so that service companies may benefits from the internal advantages and at

the same time improve marketing performance, we first need a sound and rich understanding

of what customer want, and how customers evaluate these forms of service delivery.

Adoption of technology

There is a logical relationship between consumer behaviour and service quality. Research on

the assessment of consumer preferences between self-service technologies and human aided

services found out that “customer readiness” was a major factor in determining whether

customer would even try a self-service (ATMs) option. Customer readiness results a

combination of personal motivation, ability, and role clarity. Previous research on the

adoption of computer technology has shown that perceived case of ease of access influence

usage interactions (Davis, Bagozzi and Warshaw 1989, 1992). Research shows that customer

who view technology-based service as easy to use, reliable, and enjoyable also perceive

higher quality in such delivery options (Dabholkar 1991, 1996). Rogers (1995) suggest five

main and general characteristics that affect rate of adoption and diffusion (relative advantage,

compatibility, complexity, trial-ability and observability). The growth of new technologies is

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revolutionizing the retail landscape with firms using technology both internally and

externally to improve operations, increase efficiencies and provide functional benefits for

customers. ‘‘There is hardly an industry that is not undergoing an upheaval in how it deals

with customers’’ (Hof, 1999). This discontinuity is especially evident in how service firms,

including retailers, relate to their customers (Lovelock, 1995; Parasuraman, 2000). Many

service providers and retailers have begun to use a wide range of technologies, including the

Internet, to allow customers to produce and consume services electronically without direct

contact from firm employees. These technological interfaces have been called self-service

technologies (SSTs) (Meuter et al., 2000). Examples of SSTs include applications such as

automated phone systems, ATMs and transactions via the Internet such as Federal Express’

package tracking and Internet shopping. The wide range of SST alternatives available to

retailers illustrates that not only is the Internet revolutionizing retailing, but there are also

numerous other technological applications such as in-store kiosks and interactive phone

systems that can be utilized by retailers to compete in the E-Retailing marketplace. Despite

increasing availability, very little is known about factors influencing customer usage of these

SSTs options.

With most SST options, customers choose between an interpersonal and a

technologically based encounter (i.e. deposit money through an ATM vs. with a teller inside

the bank or shopping on-line vs. visiting a physical retail store). Because a choice is

available, customers will not use a Self-Service Technology option unless they perceive an

advantage for using it and feel comfortable with the technology.

2.1.5 The Current Innovations and Development in Payment System

The most significant development of the 20th century, which has influenced business

operations, is the emergence of information age (Ovia, 2005). In fact, the rapid development

in ICT, especially through the internet has brought in its wake, a new world order in

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information and business management. The progress achieved in ICT has made it possible for

information to be digitized and transmitted faster, and cheaper. Money has over time become

mere information. Currency notes are converted to data, which are transmitted through

telephone lines and satellite transponders. Globally, new financial services such as e-payment

system have been created. Such electronic payment system is one that enables funds to be

transferred electronically between individuals, financial institutions, companies and

government sectors. The electronic payment system is made possible by the existence of

electronic money (e-money). The two main types of electronic money are card-based e-

money (electronic purse), and network or software-based money (digital cash). Other variants

of card-based e-money include public telephone cards, transport cards, telephone recharge

cards and vending machines. The electronic payment system is amendable to fund transfer

(bank-to-bank, customer-to-banks, and customer-to-customer), e-purse transactions (load and

unload from ATMs, point of sales (POS)), debit transactions (using bank’s branch and offsite

ATMs, POS transactions at merchants), credit transactions and other transactions such as

cheque book order, balance enquiry and statement generation. These efficient payment

systems enable commercial transactions to be completed faster, safer, and cheaper. They also

have positive impacts on economic growth and global competitiveness.

2.2 Empirical Review

This section examines some empirical studies that are related to consumer preferences

between human aided services and self-service technology.

Kennickell and Kwast (1997) analysed the influence of demographic characteristics on the

likelihood of payment usage. They found that income, financial asset, and high level of

education increase the likelihood of electronic payment usage. Mackie-mason and White

(1996) provided review of the characteristics that are important to consider when designing

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new payment innovations as socio-economic and demographic in nature. Mantel (2001)

surveyed the literature on consumer payment decision-making and proposed a framework in

which three factors explained consumer electronic banking usage: wealth, personal

preferences (such as convenience, incentives, control, budgeting, privacy, security and

personal involvement) and transaction-specific factors. Mantel’s (2001) framework helped to

explain why consumers are increasingly choosing to use self-service technology instruments.

He found some demographic characteristics important in influencing consumer’s choice of

payment. Borzekowski et al (2006) found that ATM usage increases with education and

income, while the usage of personnel transaction accounts decreases with age. The study

evaluated the effect of demographic attributes such as education, income, age, marital status,

occupation, home ownership, and net worth on the probability of using payment instruments.

The most common type of payment instruments by household were in cash, cheque, credit

cards, debit cards, direct deposit and direct payment. The researcher isolated the effect of

individual characteristics on people’s likelihood of using specific payment instruments, when

other attributes are held constant. The findings of the survey revealed that white collar

workers who had higher income, and education, married or owned their home were more

likely to use almost any type of self-service technology tools.

Based on the research, it was realized that despite the lower cost of processing,

electronic payments constitute a fraction on all retail payments in US. However the slow

adoption lies on the demand side. Going by the analysis of the survey on the effect of

demographic characteristics on the use of various electronic payment system. Consumer

preferences varies. Though the likelihood of using different payment system varies with

attributes such as income, education, marital status, location, gender, and job classification.

The result showed the effect of individual characteristics on the probability of using each type

of self-service instrument while controlling for all other variables.

22

In understanding the underlying factors that trigger dis/satisfaction in self-service

where the customer experienced/encounter with these type of services, has become an

important managerial implications for customer-firms relationships. With self-service

technologies, customer create the service for themselves, so it is possible that they will accept

partial responsibility in dissatisfying situations, they may likely to use the SST in the future.

Again this could have important managerial implications as companies develop new self-

service technologies and struggle with service encounter failures. When customer complains

(dissatisfaction), the firm has the opportunity to rectify the situation and potentially create a

satisfied customer (Tax, Brown, and Chandrashekaran 1998). Complaints also provide

information that can be used to fix service failure points. Customers are viewed as ‘partial

employees’ whose participation or performance in service delivery can be used by the firm to

improve the quality of its operations (Schneider and Brown, 1995; Mills and Morris (1986).

Given that self-service technology option are relatively new forms of service delivery, service

firms need strategic direction regarding whether or not to offer such options and how to

design and promote them. Expectations from the firms rendering the self-service is the only

evaluation mechanism that customers have about service delivery. Dabholkar (1996) is

among the first one to introduce the self-service technology and further used by Ladik (1999)

and Anselmsson (2001).

Dabholkar (1996) found customer characteristics in terms of general attitude

(customer’s attitudes towards using technology and customers’ need for interaction with

service employee) affect customer’s service quality expectations and willingness to try out

and adopt technology-based self-service but before the organisation gets benefits from the

self –service technology, they have to find out the customer’s willingness about these kind of

services, Kelley et al (1990) says the service firm must develop mechanism for managing its

customers to ensure efficiency as well as quality as perceived customers using or observing

23

the process. Dabholkar (1996) empirical study of expected service quality and the intentions

to adopt (or not adopt) new self-service technology options was the first attempt to develop a

systematic understanding of how customers evaluate self-service technology. Previous

research on self-service technology (Meuter et al, (2000); Dabholkar (1996)) has initiated that

perceived attribute of technology play a critical role to determine whether the customers are

willing to use this option compare to the human based delivery option. According to

Dabholkar (1996) “from customers’ point of view, speed, enjoyment, control, and ease of use

are all important attributes in measuring and using the self-service”. Expected speed of

delivery is an important factor for choosing and evaluating self-service technology options.

Foley (1990) suggest that the time it takes to accomplish a certain task is one of the most

important factor when users evaluate the quality of computer technology. Several empirical

studies have proven speed of delivery and waiting time to be important factor in customer

evaluation of both self-service and human aided service. Norman (1983) suggest that

customer in the self-service store accept greater physical effort and less personal interactions.

Foley (1990) found pleasure to be a very important factor in determining how users evaluated

quality of computer technology. Dabholkar (1996) found enjoyment to be the most important

determinant of expected service quality and suggested that enjoyment may depend on the

novelty of the technology. According to Langeard (1981) control is the most important factor

for customers in using the self-service technologies. Control is a rather complex term and can

be conceptualized as behavioural, cognitive or decisional (Bateson, 1985). Behavioural

control means the ability to influence the process. Cognitive control means understanding and

anticipating the process. Decisional control concerns the ability to set or change the objective

or outcome in a particular situation. A person’s belief that he/she has control even in the

absence of real control (Glass and Singer 1972; Langer 1975). Ease of use is also an

important factor in the adoption and evaluation of self-service option (Dabholkar 1996;

24

Bateson 1985; Lockett and Littler 1997). Kelley (1990) suggest that ease of use is an

important attribute for customers if they are to contribute with their own efforts. Foley (1990)

deal with ergonomic qualities in a computer environment and distinguished between three

kind of efforts vis a vis cognitive, perceptive and motor. Dabholkar (1996) suggest several

aspects of ease of use with an impact on service quality evaluation of self-service that could

be related to physical effort.

Chase (1978) suggested that when rationalizing and replacing personnel with

equipment and customer participation, the importance of the remaining personnel increases.

He suggested that the customer who choose the human teller instead of the ATM expect high

social content of service delivery. This suggests that although we may speak of self-service

technology system, the support of staff when needed may be significant in the evaluation of

service quality. Personnel-based support may conceptually be separated into two aspects;

courtesy and responsiveness. In accessing the physical appearance aspect of service delivery

system, Berry and Parusuraman (1991) presented a model called “component of the physical

environment” which is based on two types of equipment related factors; ambient and design.

The so called ambient factors can only be neutral or negative. Design factors are qualities

such as physical appearance and modernity of the equipment. Physical appearance has an

effect on service quality. Some researcher begun to explore personality and demographic

factors related to the acceptance of self-service technology.

Dabholkar (1991 and 1992) personality factor, “need for interaction” with a service

provider had a significant negative effect.

Forman and Sriram (1991) some customer resist self-service technology, they feel

lonely and crave social interaction.

Prendergast and Marr (1994) banking customers resist technology because they prefer

human interaction.

25

Evans and brown (1998) suggest that safety and convenience are important factors.

Past research has also examine whether self-service technology option increase or decrease

perceived quality for customers and whether perceived control translates into perceived

quality. Some people feel more in control when they perform the service for themselves

whereas others feel more in control having someone else to wait on them (Bateson 1985;

Dabholkar 1990; Langeard et al 1981; Lovelock and Young 1979), a sense of “behavioural”

control. Some self-service technology offers the customers not only control but also privacy.

Consumer familiarity with technology has a direct bearing on strategy formulation for service

design and introduction. Also, with increasing familiarity, consumers are likely to use less

complex decision making and choice models for self-service technology option (Dabholkar,

1994). Further, self-service technology option represent a unique form of service delivery and

the dimension of service quality suggested in traditional models may not apply. Interviews

with potential customer of self-service technology option and an examination of past studies

on service delivery, self-service, and the use of technological products must suggest the

appropriate dimensions of service quality.

Hayashi and Klee, (2003) focused on technology adoption and consumer payment with the

examination of the relationship between technology adoption and consumer payments. The

researchers posited that payment choices depended in part on consumer’s propensity to adopt

new technologies and in part on the nature of the transaction. The research work was based

on the premise that consumer pay for goods and services everyday but consumers do not

always choose to pay the same way. The main finding of the survey were that consumers who

use new technology are more likely to use electronic forms of payment such as automated

teller machine. They also concluded that payment choice depends on the characteristics of

transaction such as transaction value, the physical characteristics of the point of sale and a

bill’s frequency and value variability. Point of sales physical characteristics such as absence

26

of cashier or availability of self-service significantly affect payment choice. For point of sales

(POS) payments, consumers tend to use cash more often. Cashier absence negatively affect

the probability of ATMs card usage. The availability of self-service has a positive effect on

the probability of using a debit card but negative effect on the probability of paying with

cheques, the average transaction value at the point of sale also significantly affect payment

choice.

Gerdes and Walton, (2002) viewed the trends in the use of self-service technologies

instrument in the USA. Their result indicated that an efficient payment system is important

for the smooth running and functioning of a large and complex economy. As technologies

evolve, the self-service system adapts to the changing needs and expectation of individuals,

businesses, and governments. Thus in the USA, may payments which used to be made

traditionally with cash and cheques are now being made electronically with self-service

technologies or via the automated clearing houses.

2.3 Theoretical Review

There are two general complementary theories of how new products are adopted.

There are (i) Innovation diffusion (ii) consumer adoption.

The first theory, the new product innovation diffusion assumes that the primary

determinant of new product adoption is the time it takes consumers to learn about a product,

to experiment with it and then ultimately to use it. An invention, when applied for the first

time is called and innovation. Traditionally, economists have stressed the distinction between

an invention and innovation on the ground that an invention has little or no economic

significance until it is applied. Rogers, (1965) conceived innovation as; “an idea perceived as

new by the individual”. It really matters little as human behaviour is concerned, whether or

27

not an idea is “objectively” new as measured by the amount of time elapsed since its use of

discovery. It is the newest of the idea to the individual that determines hid reaction to it.

A study of industrial innovation accepted that innovation entailed “a complex

sequence of events, involving scientific research as well as technological development,

management, production and selling. The study stressed that it had been concerned with

studying innovations and not inventions. This is because, innovation was seen to involve “the

commercial application of the results of previous inventive work and experimental

development. From the marketer’s point of view, successful innovation of product and

services results in improved market performance, increased profitability, improved market

share, expanded market opportunities etc. In fact marketing strategists are interested in

predicting the behaviour of aggregate of consumers. Rogers, (1965) defines the innovation

diffusion process as “the spread of a new idea from its source of invention to its ultimate

users or adopters.

The consumer adoption model on the other hand involves how potential customers

learn about new products, try them, and adopt or reject them. Adoption is an individual

decision to become a regular user of a product. This consumer-adoption process was later

followed by the consumer-loyalty-process which is the concern of the established producer or

marketer.

The theory of innovation diffusion and consumer adoption helps marketers to identify

early adopters. Five categories of adopters in the process of innovation diffusion were

observed and which are typified as;

Innovators

Early adopters

Early majority

28

Late majority

Laggards

This five adopter groups are differing in their value orientations (Roger, 1965).

Innovators: These group are eager and willing to try new ideas. Those who buy

products first are inevitably exposed to some element of risk. The ability to tolerate

varies among individuals; some people are temperamentally able to withstand the

strain of abnormally high risk, others avoid situations where the risk factor appears to

be significant. Several researchers have studied risk-taking over recent years.

Consumers adopting risk-reducing strategies with certain products are tended to

purchase only well-known brands or advertised line.

Early adopters: These group of people are guided by respect. They are opinion

leaders in their communities and adopted new ideas early but carefully. High mobility

is another distinctive characteristics of early adopters (Alagbe, 2001). These

individuals tends to move around a lot, they are experimental and welcome new ideas.

At each move, they tend to upgrade their house and its equipment.

Early majority: These group of consumers are deliberate, they adopt new ideas

before the average person.

Late majority: These people are sceptical, they adopt an innovation only after a

majority have tried it.

Laggards: These are group of people who are tradition-bound, they are suspicious of

change/mix with other tradition-bound people, and adopt the innovation only when it

takes on a measure of tradition itself. They are generally defined as the last group or

segment of a market to adopt a new product or service. Unlike non-users, they finally

29

accept a new idea and follow the trail blazed by the innovations. They appear to

exhibit a marked reluctance to accept risk.

Characteristics of the Innovation

Another critical factors influencing the adoption process is the characteristics of the

innovation itself. Some products are readily acceptable while others take a long time to

gain acceptance. According to Kotler (2003), five characteristics influencing the rate of

adoption of an innovation are;

1. Relative advantage: This is the degree to which the innovation appears superior to

existing products e.g. (ATM card compare to direct human service).

2. Compatibility: This is the degree to which the innovation matches the values and

experiences of the individuals. (For instance; ATM card are highly compatible with

young, educated and high income earner).

3. Complexity: This is the degree to which the innovation is difficult to understand or

use.

4. Divisibility: This is the degree to which the innovation can be tried on a limited basis.

The availability of shopping malls who use self-service instrument in addition to use

of cash will increase the rate of adoption of SST.

5. Communicability: This is the degree to which the beneficial results of use are

observable or describable to others would influence the rate of adoption into the social

system.

Other characteristics that influence the rate of adoption are cost, risk, uncertainty,

credibility, availability, and social approval. The new product marketer has to research all

these factors and give the key ones maximum attention in designing the new product and

marketing programme.

30

Stages in the Adoption Process

According to Kotler (2003), an innovation is any goods, service, or idea that is

perceived by someone as new. The product might have been existing for years but it is an

innovation to the person who sees it as new. It takes sometimes to spread through the social

system. The consumer adoption process focuses on the mental process through which an

individual passes from first hearing about an innovation to final adoption.

Adopters of new products have been observed to have move through five stages

explained briefly below;

1. Awareness: the consumer becomes aware of the innovation but lacks information

about it.

2. Interest: the consumer is stimulated to seek information about the innovation.

3. Evaluation: the consumer considers whether to try the innovation.

4. Trail: the consumer tries the innovation to improve his/her estimate of its value.

5. Adoption: the consumer decides to make full and regular use of the innovation.

The new product marketer should facilitate movement through these stages. The issuers

of self-service technology instruments might discover that many consumers are stock in the

first stage because they were not aware of its existence.

31

CHAPTER THREE

METHODOLOGY

3.1 Area of Study

The research assess the consumer preference between human aided service and self-

service technology in Nigeria with particular reference to Oshogbo being a city in one of the

south-western state. The south west is one of the six geo-political zones of Nigeria which

comprised of six state namely Osun, Ondo, Oyo, Ogun, Ekiti and Lagos states. Oshogbo was

chosen due to nearness to the research centre which will foster easy accessibility of data.

Furthermore, the choice of this city is based on its commercial status because it represent the

state capital and one of the most urbanized city in the state where most of the self-service

instruments like ATM, POS, internet banking transaction are dominant. Oshogbo is Osun

state’s financial, commercial and industrial nerve centre with most manufacturing firms and

financial institutions (banks, insurance companies etc.) including a branch of the nation’s

monetary authority, Central Bank of Nigeria being located in the city.

In Nigeria, almost all the banks have their branches in Osun state mostly situated in

Oshogbo the state capital. In fact the state government herself has started to collect her

revenue online. The Osun state government electronic banking system of revenue cycle

management has been activated online through the platform of Electronic tax clearance

certificate (e-TCC) which is a new system of issuing tax clearance certificate in Osun state.

3.2 Data and Method of Collection

This study is based on the descriptive survey design to assess the preference of

consumers towards the use of self-service technology and human aided service. The

32

researcher is to employ the descriptive method. A descriptive research intends to present facts

concerning the nature and status of a situation as it exist at the time of the study. It is also

concerned with relationship and practices that exist, beliefs and processes that are ongoing,

effects that are being felt, or trends that are developing. In addition, such approach tries to

describe present conditions, events, or systems based on the impression or reactions of the

respondents of the research (Creswell, 2009). Gay (2005) state that descriptive involve the

collection of data in order to answer questions concerning the current state of the problem.

Leedy (2006) described descriptive method of research as a way of looking with intense

accuracy at the phenomena at the moment and then describes precisely what the researcher

sees. To him, whatever the researcher observe at any one time is normal and under the same

condition could be observed again in the future.

Asika, (1990) stated that the primary data is the data that mainly comes from direct

observation of event, manipulation of variables, contrivance of research situation including

performance of experiments and response to questionnaire. So in the course of this study,

primary data source of data would be used and the major technique or tool used in collecting

data in this type of research is the administration of questionnaire which would be distributed

to randomly selected users and non-users of self-service technology since this study intends

to assess the preference of consumer between self-service technology and human aided

service in Nigeria.

3.3 Population of the Study

The study population comprised of users and non-users of self-service technology in

Oshogbo, Osun State that operate either savings or current accounts and who usually buy

goods and services from business organizations who operated POS facilities. The identified

POS in Oshogbo includes super markets, hotels, petrol stations, eateries, schools, and

33

pharmaceutical stores. These establishments accept self-service instruments such as ATM

cards apart from cash as a mode of payment for goods and services.

Primary data are to be generated through a cross-sectional survey of point-of-sales

with the use of structured questionnaire. Information sought through the questionnaire

included demographic characteristics (age, family size, marital status, education, gender and

nativity) and socio-economic characteristics (annual consumption income, employment type)

as they affect the use and non-use of self-service instruments as payment instrument in the

current period. Other type of payment instruments used by the respondents were also

requested for, together with the reasons for transition from the previous payment instruments

to self-service technology.

3.4 Sample Size and Sampling Technique

Based on the large homogenous population of the study location, a convenience

sampling technique will be used to select the sample size of the study while the non-

probabilistic purposive sampling technique would be employed to select the respondents who

are users and non-users of self-service technology in Osun state because they are the target

consumers of the self-service technology and human aided services. For the purpose of this

study, 100 questionnaires would be administered and it is believed that users and non-users of

self-service technology would not restrict their views on how the substitution pattern affect

their relation with banks.

3.5 Research Instrument

The major instrument used will be a structured questionnaire. The questionnaire were

specifically designed to accomplish the objective of the study and to evaluate and analyse the

research questions that the respondent intended to answer. The questionnaire would be titled

“assessment of consumer preference between self-service technology and human aided

34

service”. It consists of five sections. Section A sought the socio-economic and demographic

features of the respondents such as gender, age, educational qualification, and cadre. Section

B identify the factors influencing the consumer choice of payment instrument which were

closed ended questions. Section C was a 5 point Likert type scale consisting of items. Each

items had 5 response option ranging from strongly agreed, agreed, disagreed, strongly

disagreed and undecided and it appraise the extent to which self-service technology serves as

a method of behavioural restraints. The respondents were to tick one response option against

each item to indicate the factors affecting student’s ability to analyse or interpret the

information.

Validation of Research Instrument

This is the extent to which the study actually measures what it was supposed to

measure. The only tool that was used to extract the kind of information needed to carry out

this research is the questionnaire that is why the questionnaire is structured in such a way that

it elicit the necessary and sufficient information needed for the study.

3.6 Measurement of Variable

The variables of this research are factors influencing the substitution pattern of

payment and consumer preference. The independent variable are the factors influencing the

substitution pattern while the dependent variable is the preference placed on both substitute

by the consumers. The expected response from the respondent were obtained, analysed and

used to achieve the stated objectives.

3.7 Data Analysis Techniques

Analysis of data is made up of element such as data preparation, data tabulation, data

presentation and analysis. The data from the primary source of data were analysed with the

use of statistical package for social scientist (SPSS). Data were analysed using both

35

descriptive and inferential statistics. The descriptive statistics include frequency and

percentage which were used to analyse the research objectives while the inferential statistics

are Chi-Square Non-parametric statistics test. The inferential statistics were used to test the

hypothesis of the study.

36

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

This chapter presents the result of the data analyses. Two main analytical method

were used to provide answers to the research objectives namely descriptive statistics and Chi

square (X2). The discussion of various finding were made and each variable assessing the

preference of consumer between human aided service and self-service technology were

carefully explained. The study covered randomly selected individuals through the use of

questionnaire which were administered to one hundred respondents, of which eighty three

were returned.

4.1.1 Socio-Economic and Demographic Characteristics of the Respondents

Considering the gender distribution of the respondents, table 4.1.1 reveals that of the 83

respondents, 31 (37.3%) are male and 52 (62.7%) are female. This shows that more female

mostly embark on financial transaction than male.

37

Table 4.1 Gender Distribution of Respondents

Gender Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

male 31 37.3 37.3 37.3

female 52 62.7 62.7 100.0

Total 83 100.0 100.0

Source: Field survey, 2015

38

4.1.2 Age distribution of Respondents

The age of respondents may affect the quality of information supplied by the respondent.

Table 4.1.2 provide summary of age of the respondents. The table shows that 6 of the

respondents representing 7.2% are below 20 years of age, 39 (47%) of them are within the

age bracket of 20-29 years, 17 (20.5%) are within 30-39 years age bracket, 7 (8.4%) are

within 40-49 years age bracket, 14 (16.9%) are 50 years and above.

From the foregoing, the majority of the respondents are in the middle age class who

are economically viable. This is not unexpected as it coincides with the age category of

actively working member of the society. The need by the under-aged dependents and over-

aged and retired dependents all rest on this category of relatively young, actively involving

youths. The age grouping according to the average value and the distribution correspond to

the category of people who could be willing to try new practices and inventions. This finding

was in consonance with the study carried out by Jim and De vaney (2005) who discovered

that most of the self-service instrument users were younger than 40 years of age. This also

shows that majority of the respondents are matured depicting that the information supplied

are reliable.

39

Table 4.2 Age Distribution of Respondents

Age Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

below 20 years 6 7.2 7.2 7.2

20-29 years 39 47.0 47.0 54.2

30-39 years 17 20.5 20.5 74.7

40-49 years 7 8.4 8.4 83.1

50 years and

above

14 16.9 16.9 100.0

Total 83 100.0 100.0

Source: Field survey, 2015

40

4.1.3 Marital Status of the Respondents

On the marital status of the respondents, Table 4.3 reveals that 43 representing 51.8% of the

respondents are single and 33 representing 39.8% of the respondents are married while

2(2.4%) and 5 (6%) are divorced and widow respectively. Based on these table, it is deduced

that 51.8% of the respondents engage more in financial transaction and this percentage value

represent the single category who base on the reliability of the research constitute an active

population.

41

Table 4.3 Marital Status of Respondents

Marital Status Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

Single 43 51.8 51.8 51.8

Married 33 39.8 39.8 91.6

Divorce 2 2.4 2.4 94.0

Widow 5 6.0 6.0 100.0

Total 83 100.0 100.0

Source: Field survey 2015

42

4.1.4 Family Size of the Respondent

Reasonable number of respondents (30.1%) has just one dependent which is in consonance

with modern day nuclear family setting. From Table 4.4, it can be seen that all the identified

family size were well represented, though a dip was observed in two family sizes (i.e. family

size 1 and family size 5).

43

Table 4.4 Family Size of Respondents

Family size Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

1 25 30.1 30.1 30.1

2 11 13.3 13.3 43.4

3 11 13.3 13.3 56.6

4 3 3.6 3.6 60.2

5 12 14.5 14.5 74.7

5 and

above

21 25.3 25.3 100.0

Total 83 100.0 100.0

Source: Field survey 2015

44

4.1.5 Educational Attainment of Respondents

Table 4.5 shows the educational qualifications of the respondents. From the table, about

72.3% of the respondents possess advanced form of post-secondary education with 55.5%

having at least first degree or it equivalent. 13.3% also possess different combination of

postgraduate qualifications. The implication of this is that there is tendency for adoption and

use of self-service instrument, especially ATM. This result was in consistent with the

findings of carow and staten (1999) where higher education was associated with greater use

of self-service instrument. In a similar study conducted by borzekowski, et al (2006), it was

found that ATM use increases with levels of education. The findings of the survey revealed

that people with higher education were more likely to use almost any type of electronic

payment.

45

Table 4.5 Literacy rate of Respondents

Educational

qualification

Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

WAEC/SSC

E

23 27.7 27.7 27.7

ND/NCE 14 16.9 16.9 44.6

HND/BA/B.

Sc

35 42.2 42.2 86.7

M.Sc/MBA 11 13.3 13.3 100.0

Total 83 100.0 100.0

Source: Field survey 2015

46

4.1.6 Nativity and Non-nativity Distribution of the Respondents

It was observed from table 4.6 that the percentage value of those who are native of the study

state are 44 representing 53% of the total respondents and also 39 represent 47% of the total

respondents.

47

Table 4.6 Nativity and Non-nativity of the Respondents

Nativity Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

yes 44 53.0 53.0 53.0

no 39 47.0 47.0 100.0

Total 83 100.0 100.0

Source: Field survey 2015

48

4.1.7 Employment Status of Respondents

Employment is generally defined as income earning engagement. The frequency and

quantity of consumption all rest on income which also depends on employment. From the

survey, more than 75% of the respondent are fully employed either in a formal enterprise or

as self-employed and this represents the most actively working and income earning segment

of the society. Table 4.7 shows that the frequency distribution increases from the unemployed

to the employed and thereafter decreases drastically (retired).

49

Table 4.7 Employment Status of Respondents

Employment status Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

Unemployed 21 25.3 25.3 25.3

Employed 39 47.0 47.0 72.3

Self-

employed

21 25.3 25.3 97.6

retired 2 2.4 2.4 100.0

Total 83 100.0 100.0

Source: Field survey 2015

50

4.1.8 Income range of Respondents

Table 4.8 shows the range of income of respondents. High income is a proxy for various

transactions, it night also be viewed as proxy for frequent transactions. According to

kennickell and kwast (1997) income and financial assets increases the likelihood of electronic

payment usage. More than 41% earn N100,000 and above per month, while approximately

19.3% earn between N50000-N100000.

51

Table 4.8 Household Income of the Respondents

Household income Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

below N20,000 17 20.5 20.5 20.5

N20,000-N50,000 16 19.3 19.3 39.8

N50,000-

N100,000

16 19.3 19.3 59.0

N100,000 and

above

34 41.0 41.0 100.0

Total 83 100.0 100.0

Source: Field survey 2015

52

4.1.9 Expenditure pattern of the Respondents

It would be observed from Table 4.9 that the highest expenditure value from the respondents

is N120000. This depict the respondent’s expenditure rate which was as a result of the high

earned income. A value high enough to be an indication that the respondents were very much

above poverty line. The minimum monthly expenditure value is N8000 which account for

less than 5% of the total respondents and this means that the average spending of the

respondents is N10640 which indicate that greater percentage of the respondents perform

more financial transactions which determines the choice of consumer preference over self-

service instruments and human aided services within the study location.

53

Table 4.9 Expenditure value of the Respondents

Expenditure value

Frequency Percent Valid Percent Cumulative

Percent

10000 4 4.8 4.8 4.8

100000 4 4.8 4.8 9.6

12000 8 9.6 9.6 19.3

120000 10 12.0 12.0 31.3

15000 3 3.6 3.6 34.9

150000 4 4.8 4.8 39.8

20000 2 2.4 2.4 42.2

25000 5 6.0 6.0 48.2

30000 9 10.8 10.8 59.0

32000 3 3.6 3.6 62.7

5000 4 4.8 4.8 67.5

50000 5 6.0 6.0 73.5

6000 6 7.2 7.2 80.7

60000 4 4.8 4.8 85.5

70000 3 3.6 3.6 89.2

8000 2 2.4 2.4 91.6

80000 5 6.0 6.0 97.6

90000 2 2.4 2.4 100.0

Total 83 100.0 100.0

Source: Field survey 2015

54

4.1.10 Payment pattern adopted by the Respondents

Table 4.10 provides a summary of various payment options available and being used

by the respondents. The use of cash as a payment instrument tops the list (56.6%), followed

by ATM cards (about 29%). Respondents also use a combination of various payment

instruments as they found convenient. The various payment option being used by the

respondents was in line with the finding of Stavins (2001) who found that consumer’s

preference for payment instrument were not uniform. This study also supports the findings of

Mantel and McHugh (2001). The results showed that despite the prediction of cashless

society for decades, paper-based instruments such as cash among others continues to remain a

dominant form of payment in the economy.

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Table 4.10 Payment pattern adopted by the respondents

Payment pattern

adopted

Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

cash 47 56.6 56.6 56.6

internet

banking 9 10.8 10.8 67.5

ATM card 24 28.9 28.9 96.4

POS 3 3.6 3.6 100.0

Total 83 100.0 100.0

Source: Field survey 2015

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4.2 Preference of self-service instruments to Human aided services

Table 4.11 and 4.12 indicated that on the average, 73 percent of the respondents agreed that

they prefer self-service instrument to human aided services and which may be due to its

convenience and safety. This position was supported by the study carried out by Mantel

(2000) where he found out that the personal preference for using electronic banking was

convenience among others. This same position was held by Gerdes and Walton (2002) when

they reviewed the trends in the use of self-service instrument was on the increase because of

it convenience.

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Table 4.11 preference of self-service to cash transaction

preference of

self-service

to cash

transaction

Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

Yes 62 74.7 74.7 74.7

No 21 25.3 25.3 100.0

Total 83 100.0 100.0

Source: Field survey 2015

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Table 4.12 preference of self-service to cheque

preference of

self-service

to cheque

Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

yes 59 71.1 71.1 71.1

No 24 28.9 28.9 100.0

Total 83 100.0 100.0

Source: Field survey 2015

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4.3 Self-service instrument as a Method of Behavioural Restraints

Self-service instrument draws from available reserves, payment choice is potentially linked

with household spending decision, and the restraints classification includes the reasons for

using self-service instruments. Consumer’s restraints in the indicated classes view self-

service instruments as a preferred alternative to other payment methods based on the strength

of their agreement to the highlighted reasons.

In table 4.13, approximately 64% of the respondents agree that self-service instrument will

reduce the abuse of naira notes. This hopefully will translate to reduction in the cost of

printing naira notes by the government.

Self-service instrument will reduce the incidence of overspending. This is because consumers

will pay from their reserve. In table 4.14, about 70% of the respondents affirmed that its use

will curtail their spending pattern. Unplanned spending was also affirmed a precautionary

benefit through the self-service instruments.

Financial planning, reduction in buying regret, prompt settlement of financial transactions,

and a cautious social engagements were other methods of behavioural restraints highlighted

by respondents.

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Table 4.13 self-service reduces abuse of currency

self-service reduces

abuse of currency

Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

Disagreed 11 13.3 13.3 13.3

Undecided 19 22.9 22.9 36.1

Agreed 20 24.1 24.1 60.2

strongly

agreed 33 39.8 39.8 100.0

Total 83 100.0 100.0

Source: Field survey 2015

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Table 4.14 self-service reduces overspending

self-service reduces

overspending

Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

disagree 13 15.7 15.7 15.7

undecided 12 14.5 14.5 30.1

Agreed 26 31.3 31.3 61.4

strongly

agreed 32 38.6 38.6 100.0

Total 83 100.0 100.0

Source: Field survey 2015

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Table 4.15 Self-service encourages better Financial Planning

self-service encourages

better financial

planning

Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

strongly

disagree 5 6.0 6.0 6.0

disagree 9 10.8 10.8 16.9

undecided 15 18.1 18.1 34.9

agreed 38 45.8 45.8 80.7

strongly agreed 12 14.5 14.5 95.2

55.00 4 4.8 4.8 100.0

Total 83 100.0 100.0

Source: Field survey 2015

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Table 4.16 self-service reduces after buying regret

self-service reduces

after buying regret

Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

strongly

disagree 5 6.0 6.0 6.0

Disagree 14 16.9 16.9 22.9

Undecided 26 31.3 31.3 54.2

Agreed 16 19.3 19.3 73.5

strongly agreed 22 26.5 26.5 100.0

Total 83 100.0 100.0

Source: Field survey 2015

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Table 4.17

self-service encourage prompt settlement of financial transaction

self-service

encourage prompt

settlement of

financial transaction

Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

Disagree 27 32.5 32.5 32.5

Undecided 14 16.9 16.9 49.4

Agreed 25 30.1 30.1 79.5

strongly

agreed 17 20.5 20.5 100.0

Total 83 100.0 100.0

Source: Field survey 2015

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Table 4.18 self-service discourage unnecessary social engagements

self-service

discourage

unnecessary social

engagements

Frequenc

y

Percent Valid

Percent

Cumulative

Percent

Valid

disagree 11 13.3 13.3 13.3

undecided 16 19.3 19.3 32.5

agreed 32 38.6 38.6 71.1

strongly

agreed 24 28.9 28.9 100.0

Total 83 100.0 100.0

Source: Field survey 2015

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4.4 Test of Hypothesis

In order to test the hypothesis that there is no significant difference between the consumers

substitution pattern of users of self-service technology and non-users of self-service

technology, chi square test was carried out.

Table 4.19 Chi square test of the preference of self-service to cash transaction

preference of self-service to cash

transaction

Observed

N

Expected

N

Residual

yes 62 41.5 20.5

no 21 41.5 -20.5

Total 83

Source: Field survey 2015

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Table 4.20 Chi square test of the preference of self-service to cheque

preference of self-service to cheque

Observed

N

Expected

N

Residual

yes 59 41.5 17.5

no 24 41.5 -17.5

Total 83

Source: Field survey 2015

Table 4.21 Test Statistics result

Test Statistics

preference of

self-service

to cash

transaction

preference of

self-service

over cheque

Chi-

Square 20.253a 14.759a

df 1 1

Asymp.

Sig. .000 .000

a. 0 cells (0.0%) have expected

frequencies less than 5. The minimum

expected cell frequency is 41.5.

Source: Field survey 2015

Based on the chi square result above, the result is significant at 0.000 in which case the null

hypothesis should be rejected and the alternative hypothesis should be accepted.

This implies that there is a significant difference between the consumer substitution patterns

of users of self-service instruments and non-users of self-service instrument.

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CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary

This study investigated the consumer preference between Human aided service and

self-service technology in Osun state. The study area is one of the commercial nerve centre of

the country.

Data were collected with the aid of questionnaire that was administered to 100 respondents in

the study location out of which 83 were returned. Result from the socio-economic and

demographic characteristics of respondent indicated that the majority of the respondents are

in the middle age class who are economically viable. This is not unexpected as it coincides

with the age category of actively working member of the society. The need by the under-aged

dependents and over-aged and retired dependents all rest on this category of relatively young,

actively involving youths and reasonable number of respondents (30.1%) has just one

dependent which is in consonance with modern day nuclear family setting. Also about 72.3%

of the respondents possess advanced form of post-secondary education with 55.5% having at

least first degree or its equivalent. 13.3% also possess different combination of postgraduate

qualifications. The implication of this is that there is high tendency for adoption and use of

self-service instrument, especially ATM because of the high literacy rate of the respondents

in the study location also from the survey, more than 75% of the respondent are fully

employed either in a formal enterprise or as self-employed and this represents the most

actively working and income earning segment of the study location. 73 % of the respondents

agreed that they prefer self-service instrument to human aided services and which may be due

to its convenience and safety. Self-service instrument will reduce the incidence of

overspending. This is because consumers will pay from their reserve. In table 4.14, about

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70% of the respondents affirmed that its use will curtail their spending pattern. Unplanned

spending was also affirmed a precautionary benefit through the self-service instruments.

Financial planning, reduction in buying regret, prompt settlement of financial transactions,

and a cautious social engagements were other methods of behavioural restraints highlighted

by respondents.

5.2 Conclusion

Both self-service technology and human aided service are still in contention in financial

transaction within the study location. Emphasis should be placed on guarantee of deposit by

account owners so that their fears on use can be allayed. This is not because most of them

still attribute insecurity to their refusal to use this payment option despite their appetite for it.

We also saw from the work that problems associated with use by others are never a constraint

in using it by any next intending user. This implies that use attribute are independent of users.

Of the five propositions measured on a likert scale and tested on Chi square non-parametric

test.

From the research, the prediction of a cashless economy is still far from being attained. This

is because about 56.6% of the respondents still make use of cash medium of transaction.

5.3 Recommendation

Based on the findings of this study, the following are recommended to improve the use base

of self-service technology as well as protecting financial transaction through the human aided

disposition.

i. In order to achieve optimal use of any newly introduced technological innovation,

it is better to put hands on deck to work on modifying features of these

innovations so as it give total acceptability and use that is not competing with the

earlier ones.

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ii. Financial institutions should have regular contact with IT firms towards

repackaging innovations so as to guarantee improvement in their products. A once

and for all innovation is not likely to have incorporated all the attributes that will

ensure optimal performance.

iii. There should be training to any customer who is not willing to use self-service

technology for his/her transaction. This can come in the form of assigned

customer service officer to give audience to such. It can also technically enforced

by insisting that transactions below a specific value should be executed on the

ATM and failure to adhere to this will attract some charges for choosing

counter/personnel option.