CASH AND ELECTRONIC BASED TRANSACTIONS IN NIGERIA: THE [PDF]

Keywords: Cashless policy, transactions, electronic transactions, Nigeria interbank settlement system ... In Nigeria, th

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JORIND 13(2) December, 2015. ISSN 1596-8303. www.transcampus.org/journal; www.ajol.info/journals/jorind

CASH AND ELECTRONIC BASED TRANSACTIONS IN NIGERIA: THE ROLE OF A NATIONAL AGGREGATOR Oluwatosin Oyetayo Department of Banking and finance, College of Management Sciences, Federal University of Agriculture, Abeokuta, Ogun State and James Fatokun Department of Economics, Accounting and Finance, Bells University of Technology, Ota E-mail: [email protected]+2348084875993, [email protected]+2348053293275 Abstract Can the cashless policy succeed in Nigeria? That was the question on the lips of everyone when it was introduced in January 2009 as an important factor that can help achieve sustainable development in the Nigerian financial system. So much has been invested in the re-galvanizing of the national aggregator (NIBBS) which is the mechanism that facilitates both cash and electronic payment systems. The Central Bank and other financial services providers are quite optimistic about the success of the policy against the pessimistic view expressed by some close watchers that Nigeria is not ripe for such yet. We test the short term dynamics in the operation of the cashless policy (January 2009-May 2014) to establish if truly there is hope in that direction. In all, our result shows that the national aggregator (NIBBS) has facilitated more of electronic payments than cash payments within the last ten months of the period of study,even with some fluctuations though. This is an indication that the cashless policy is gradually taking root and ready to replace the existing cash payment system. The Nigerian financial subscribers have come to accept the cashless policy after-all! Keywords: Cashless policy, transactions, electronic transactions, Nigeria interbank settlement system Introduction In every economy, a large number of transactions take place each day, on the initiative of a wide range of economic actors. All transactions, whether they involve the acquisition of goods, financial assets or services (and provided they do not involve bartering), have two settlement components: (i) the delivery of the good or service; and (ii) the transfer of funds – i.e. payment using cash (banknotes and coins) or deposits held with banks (funds in accounts held with banks). A payment either cash or electronic is therefore a transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. A payer is the party to a payment transaction which issues the payment order or agrees to the transfer of funds to the payee. A payee – or beneficiary – is the final recipient of funds.

prerequisite for the majority of economic interactions (i.e. “no payment, no trade”).In its more restricted sense, the term “payment system” is sometimes used as a synonym for “interbank funds transfer system” or “IFTS”. However, at a general level, the term “payment system” refers to the complete set of instruments, intermediaries, rules, procedures, processes and interbank funds transfer systems which facilitate the circulation of money in a country or currency area (Caianiello, Scarpetta&Simoncelli, 1982). A payment instrument is a tool or a set of procedures enabling the transfer of funds from the payer to the payee. There are a variety of different payment instruments, each with its own characteristics depending on the type of relationship and transaction between the payer and the payee. The most common distinction is between cash and noncash payment instruments.

Well-designed payment infrastructure contributes to the proper functioning of markets and helps to eliminate frictions in trade (Boeschoten&Fase, 1989). If the cost of a transaction exceeded the benefits expected from the trade, services, assets and products might not even be exchanged. The availability of reliable and safe payment mechanisms for the transfer of funds is therefore a

Cash payments (i.e. payments made using banknotes and coins) are usually associated with face-to-face transactions of low value between individuals or between an individual and a merchant. If the parties do not exchange information on their identity, a cash payment is said to be “anonymous”. A cash payment is an immediate and final transfer of value, and the

JORIND 13(2) December, 2015. ISSN 1596-8303. www.transcampus.org/journal; www.ajol.info/journals/jorind

recipient can immediately use the cash received for further payments. In most countries, legislation or regulation requires that banknotes and coins be accepted as payment for all types of transaction, potentially subject to limits per denomination (Boeschoten&Fase, 1992). This confirms the status of the banknotes and coins as legal tender. Further identification measures are not normally required for cash transactions, with the exception of largevalue transactions in the context of increased efforts to tackle money laundering and the financing of terrorism. Non-cash payments, by contrast, involve the transfer of funds between accounts. A non-cash payment instrument is therefore the means by which a payer gives its bank authorization for funds to be transferred or by which a payee gives its bank instructions for funds to be collected from a payer. The accounts of the two parties may be held with a single bank or with different banks.Non-cash payment instruments can be further classified on the basis of the following; Physical form– (paper-based or electronic instruments) Payment instructions have traditionally been in paper form, but today they are increasingly taking the form of electronic instructions. In which, in the case of Nigeria, the NIBSS (Nigeria Inter-bank Settlement Systems) shall be considered as a case study that operates as a Central Switch and thus occupying a critical position in electronic payments in Nigeria. Electronic payment system as a modern means of payment is meant to complement the existing medium of payment which is the cash based medium. In developed countries, over the years,electronic payments have been able to successfully complement and ultimately substitute for cash based transactions. In Nigeria, the situation at the inception of the cashless policy is almost like the reverse of what is obtained in much more developed economy.Subsequently, the Nigerian government has made frantic efforts to sustain electronic payment in the country. The central bank of Nigeria (CBN) has further reengineered its central switch to facilitate effective interplay of both cash and electronic payment system. Some studies in Nigeria (Komolafe 2013) reveals about 83% of citizens in the economy still conduct more of cash based transactions than electronic payment transactions. Other studies like(Yaqub, Bello, Adenuga, Ogundeji (2013) have also revealed the benefits or advantages of electronic payment system over the cash based

system in terms of convenience, speed of transfer etc. However, some others like(Odior and Banuso, 2013) reveal some of the shortcomings of electronic payment system such as system hacking, ATM imposters etc. all of which have contributed to the low usage or patronage of electronic payment witnessed in Nigeria at inception. This places a question mark on the efficacy of the national aggregator- the central switch system which is the central arm of the Nigerian interbank settlement system (NIBSS). This study aims to examine the level of success recorded so far by NIBSS in the facilitation of both cash and electronic payments. Therefore, we come up with the following questions; is the Nigerian central switch system actually capable of facilitating both the cash based and electronic payment systems effectively? What is extent of the dynamic effects of NIBBS facilitation on both electronic and cash based payments? Literature review Kippers (2004) in his thesis presented the first empirical analysis of the use of currency denominationsin individual cash payments. In this, he showed that such an approach contributesto existing currency research that mainly concentrates on currency use at the aggregatelevel. In fact, no more than theoretical assumptions have been made on individual cashpayment behavior in economic literature. He also summarized the discussion onwhat values should be assigned to denominations for a currency range to be optimal. Thisoptimizing problem can be approached from two different angles. As given by Akhavein, Frame and white, (2000), the first argues thatthe optimal range should provide for cash payments in which, on average, a minimumnumber of notes and coins are exchanged. This is called the “principle of least effort” thatsuggests that currency should provide for the most efficient cash payments. The secondapproach has the view that the number of different denominations should be minimized,while allowing any amount to be paid. The reason being that the lower the number ofdenominations is, the lower the costs of issuing, developing and producing denominationsare, and the lower the risk of confusion is with the public. Johnson (1998) reported that the primary objective of price stability without unduly compromising the operational efficiency of the payment system constitutes a major problem for central banks. Routine monetary policy presumes a

JORIND 13(2) December, 2015. ISSN 1596-8303. www.transcampus.org/journal; www.ajol.info/journals/jorind

given institutional and technological framework, including aspects of the payment system. Such a monetary policy concerns itself with intraday and interday credit for payments settlements and with float. Liquidity shocks and panics sometimes pose an additional challenge. In recent years, major and rapid institutional and technological changes in the payment system(mainly to lower risks and augument operational efficiency) have affected the monetry policy decision making process, particularly in the short run. But some other authors believe government monetary policies can be enhanced and better implemented with the electronic payment system. Kriwoluzky and Stoltenberg (2010) studied the cashless and monetary economy in the US. They employed the Bayesian technique of estimation using data set split into two parts; first quarter 1964 to third quarter 2009. Their findings reveal that interest rate policy was passive in the cash economy but active in the cashless economy. This position is supported by Marco and Bandiera (2004) who argued that increased usage of cashless banking instruments strengthens monetary policy effectiveness and that increases in the usage of electronic money does not pose a threat to the stability of the financial system. However, CostaStorti and De-Grauwe (2001) are worried about central banks gradually losing their monopoly position in the provision of liquidity as it shrinks out of relevance over time which makes it hard to control the short term interest rate. Xiaonan (2011) reported that due to the reform of payment systems from netting settlement systems to Real Time Gross Settlement systems (RTGS) around the world in recent years, there is a dramatic increase in the interest in modeling the large-valued interbank payment system. Recently some queuing facilities have been introduced in the response to the liquidity management within the RTGS systems. Since stochastic process models have been wildly applied in social networks, and some aspects of which have similar statistical properties with the payment system, therefore, based on the existing empirical research, a Markov type model for RTGS payment system with queuing and collateral borrowing facilities was developed. He analyzed the effect on the performance of the payment system of the parameters, such as the probabilities of payment delay, the initial cash position of participating banks and the probabilities of cross bank payments. Two models were proposed; one is the simplest model where payments were assumed to

be equally distributed among participating banks, the other one is a so-called ”cluster” model, that there exists a concentration of payments flow between a few banks according to the evidence from empirical studies. We have found that the performance of the system depends on these parameters. A modest amount of total initial liquidity required by banks would achieve a desired performance which minimizing the number of unsettled payments by the end of a business day and negligible average lifetime of the debts. Morten and Hobijn (2006) both examined the diffusion of the real-time gross settlement (RTGS) technology across the world‟s 174 central banks. RTGS reduces settlement risk and facilitates financial innovation in, for example, the settlement of foreign exchange trades. According to them, in 1985 only three central banks had implemented RTGS systems; by year-end 2006 that number had increased to ninety-three (93). Their findings reveal that the RTGS diffusion process is consistent with a standard S-shaped curve. Real GDP per capita, the relative price of capital, and trade patterns explain a significant part of the cross-country variation in RTGS adoption. These determinants are remarkably similar to those that seem to drive cross-country adoption patterns of other technologies. Oyewole, Gambo, Abba and Onuh(2013)came to a conclusion that technological advancement has provided efficient and effective payment system devoid of „cash and carry syndrome‟. Specifically, electronic payment system provides a medium through economic exchanges take place without visiting brick and mortal banks or with no physical presence of the transacting parties. While electronic payment system enjoys prominence in Nigeria, evidence of its contribution to economic growth has not been empirically established. Meanwhile, the current transition to cashless economy was essentially based on the prominence of e-payment system. The study, for the first time, explored relationship between e-payment system and economic growth as means of reviewing current transition to cashless economy in Nigeria. They employed OLS and TSLS methods covering a period of 7years (2005-2012). Their result indicates a significant positive relationship between e-payment system and economic growth in terms of real GDP per capita and trade per capita. Only ATMs was found to positively contribute to economic growth while other epayment channels contribute negatively. Hence,

JORIND 13(2) December, 2015. ISSN 1596-8303. www.transcampus.org/journal; www.ajol.info/journals/jorind

current cashless policy should be tailored towards effective e-payment system and other factors which bear much relevance on successful transition to cashless economy should be prioritized.

This establishes the relationship and extent of influence of the national aggregator on cash payment and electronic payment transactions. The model is specified thus as; Xt=αXt-1 + Yt + µt ------------------ (1)

Yaqub, Bello, Adenuga, Ogundeji (2013),argued that the emergence of a cashless society pose benefits as well as problems for a society. Cashless policy can help deepen bank deposits thereby increasing funds available for commercial purposes while on the other hand, a remarkable challenge identified by them is the lack of suitable legal and regulatory framework for e-payments yet in Nigeria.

Zt=αZt-1 + Yt + µt……………… (2) Where X represent matrix of cash based channels Z represent matrix of electronic based channels Y represent log value of total transactions supported by NIBSS, t represent the time dimension. From the above, we go further to specify a VAR system to capture the dynamic effects in the relationship among the three major variables. The model is given thus:

Model specification We followAmeniya (1974) to state abaseline multiregression model given in equation (1) and (2). k

k

k

X t  a1   b1 j X t  j   c1 j Yt  j   d1 j Z t  j  u1t .......... ....( 3) j 1

j 1

j 1

k

k

k

j 1

j 1

j 1

k

k

k

j 1

j 1

j 1

Yt  a 2   b2 j X t  j   c2 j Yt  j   d 2 j Z t  j  u 2t .......... ...( 4) Z t  a3   b3 j X t  j   c3 j Yt  j   d 3 j Z t  j  u 3t .......... ...(5) and impulse response analysis of the VAR system is carried out.

Analysis We employ the trend analysis to look at the trend in the values of major variables in order to study the pattern of transaction activities overtime. The correlation analysis also reveals the level of association among variables. For the estimation of the model specified above, variance decomposition

Result and interpretation Graph showing the trend and pattern of cash based payment

Fig I: Trend of cash based payment in Nigeria from Jan 2009 to May 2014 2,500,000 2,000,000 1,500,000 1,000,000

CASH

500,000

Sources: Author’s computation using NIBSS data

Apr

Jan

Oct

JUL

Apr

Jan

Oct

JUL

Apr

Jan

Oct

JUL

Apr

Jan

Oct

JUL

Apr

Jan

Oct

JUL

Apr

Jan

0

JORIND 13(2) December, 2015. ISSN 1596-8303. www.transcampus.org/journal; www.ajol.info/journals/jorind

This graph shows the trend of cash based payment which includes cheque and draft which has significantly declined since the inception of electronic based payment in 2009 with a sharp

reduction in both value and volume of transaction from about 1,400,000 to about 600,000 in October 2009 to January 2010 and has been having a minimal rise and fall till date.

Fig II: Trend of electronic payment in Nigeria from Jan 2009 to May 2014 14,000,000 12,000,000 10,000,000 8,000,000 EBANK

6,000,000 4,000,000 2,000,000

Apr

Jan

Oct

JUL

Apr

Jan

Oct

JUL

Apr

Jan

Oct

JUL

Apr

Jan

Oct

JUL

Apr

Jan

Oct

JUL

Apr

Jan

0

Sources: Author’s computation using NIBSS data The graph above shows the trend of electronic based payment which includes NIBSS instant payment (NIP), NIBSS electronic fund transfer (NEFT), point of sale (POS), automated teller machine (ATM) and mobile (i.e. inter-scheme transfer) which has been growing since its inception in 2009 though some of the variables were not yet in play but was fully functional in May 2012 and has significantly grown ever since then, increased to about 8,300,000 volume of

transaction, and was at its peak in the month of November 2013, but experienced a great fall in the volume of transaction from about 13,500,000 to 3,000,000 between December 2013 and January 2014 either due to system upgrade of the Nigerian interbank settlement system or as a result of been a festive period in which most people perform more of cash based transaction than electronic based; and can be said to have a constant trend till date.

JORIND 13(2) December, 2015. ISSN 1596-8303. www.transcampus.org/journal; www.ajol.info/journals/jorind

Fig III: Trend of NIBSS transaction in Nigeria from Jan 2009 to May 2014 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 NIBS

2,000,000 Jan Apr JUL Oct Jan Apr JUL Oct Jan Apr JUL Oct Jan Apr JUL Oct Jan Apr JUL Oct Jan Apr

0

Sources:

Author’s computation using NIBSS data This graph shows the trend of the total transaction facilitated by the Nigerian interbank settlement system which includes all subset of both the cash and electronic based transaction which had a significant rise in both the volume and value of transaction in January 2012 due to the full

implementation of the electronic based transaction then had it peak period of exactly 14,000,000 volume of transaction in November of 2013 to around January of 2014 then fell to about 3,900,000 volume of transaction performed each month till date according to the trend.

Table 1: Correction Matrix between Cash Based Transaction and Electronic based Payment Correlation

CASH

EBANK

CASH

1.000000

EBANK

-0.345130

1.000000

t-Statistic

CASH

EBANK

CASH EBANK Source:

Author‟s

2.918730** Computation

The correlation result presented in table 1 depicts that there is a weak and negative significant association between cash based transaction and electronics payment in Nigeria since the correlation coefficient is -0.3451 and it statistically significant at 5% level. This finding shows that the

from

E-views,

2014

direction of relationship between cash based transaction and electronics payment is negative and below average. Thus, this implies that both methods must be used simultaneously in order to achieve fast and quick payment method in Nigeria. Hence, the methods are complementary in nature.

Impulse response results for dynamic relationship among cash based transaction, NIBSS and electronics payment

JORIND 13(2) December, 2015. ISSN 1596-8303. www.transcampus.org/journal; www.ajol.info/journals/jorind

Response to Cholesky One S.D. Innovations ± 2 S.E. Response of LOG(CASH) to LOG(CASH)

Response of LOG(CASH) to LOG(EBANK)

Response of LOG(CASH) to LOG(NIBS)

.20

.20

.20

.15

.15

.15

.10

.10

.10

.05

.05

.05

.00

.00

.00

-.05

-.05

-.05

-.10

-.10 1

2

3

4

5

6

7

8

9

10

-.10 1

Response of LOG(EBANK) to LOG(CASH)

2

3

4

5

6

7

8

9

10

1

Response of LOG( EBANK) to LOG(EBANK) .4

.4

.3

.3

.3

.2

.2

.2

.1

.1

.1

.0

.0

.0

-.1

-.1

-.1

-.2 1

2

3

4

5

6

7

8

9

10

Response of LOG(NIBS) to LOG(CASH)

2

3

4

5

6

7

8

9

10

1

Response of LOG(NIBS) to LOG(EBANK) .3

.2

.2

.2

.1

.1

.1

.0

.0

.0

-.1 2

Source:

3

4

5

6

7

8

9

Author’s

10

5

6

7

8

9

10

2

3

4

5

6

7

8

9

10

Response of LOG(NIBS) to LOG(NIBS)

.3

1

4

-.2 1

.3

-.1

3

Response of LOG(EBANK) to LOG(NIBS)

.4

-.2

2

-.1 1

2

3

4

5

6

7

Computation

8

9

10

1

from

2

3

4

5

6

7

8

E-views,

9

10

2014

Table 2: Variance Decomposition Result for Dynamic Relationship among Cash Based, Electronic Based payment and NIBBS Response of LOG(CASH): Period

LOG(CASH)

LOG(EBANK)

LOG(NIBSS)

1

0.155073

0.000000

0.000000

(0.01382)

(0.00000)

(0.00000)

0.075419

-0.023478

0.055637

(0.02184)

(0.02146)

(0.02016)

0.044313

-0.004894

0.036522

(0.02119)

(0.01255)

(0.01386)

0.034285

-0.005032

0.040141

(0.01876)

(0.01108)

(0.01010)

0.027382

-0.002424

0.035062

(0.01556)

(0.01157)

(0.01002)

2

3

4

5

JORIND 13(2) December, 2015. ISSN 1596-8303. www.transcampus.org/journal; www.ajol.info/journals/jorind

6

0.023891

-0.001296

0.032311

(0.01392)

(0.01165)

(0.00971)

0.021105

-0.000293

0.029081

(0.01271)

(0.01199)

(0.00958)

0.018931

0.000491

0.026267

(0.01182)

(0.01223)

(0.00942)

0.017031

0.001135

0.023663

(0.01107)

(0.01243)

(0.00922)

0.015354

0.001666

0.021309

(0.01040)

(0.01257)

(0.00898)

Period

LOG(CASH)

LOG(EBANK)

LOG(NIBSS)

1

0.036653

0.305891

0.000000

(0.03868)

(0.02725)

(0.00000)

0.012169

0.210753

0.015797

(0.04676)

(0.04430)

(0.03885)

0.013801

0.219128

-0.003206

(0.05018)

(0.03035)

(0.02604)

0.011488

0.199216

-0.000271

(0.05224)

(0.03536)

(0.02892)

0.008384

0.188340

-0.005514

(0.05229)

(0.03581)

(0.02959)

0.006250

0.176014

-0.007130

(0.05143)

(0.03847)

(0.03106)

0.004065

0.164929

-0.009328

(0.05010)

(0.04071)

(0.03226)

0.002285

0.154370

-0.010855

(0.04870)

(0.04299)

(0.03322)

0.000724

0.144456

-0.012149

(0.04724)

(0.04503)

(0.03390)

7

8

9

10

Response of LOG(EBANK):

2

3

4

5

6

7

8

9

JORIND 13(2) December, 2015. ISSN 1596-8303. www.transcampus.org/journal; www.ajol.info/journals/jorind

10

-0.000591

0.135126

-0.013142

(0.04576)

(0.04683)

(0.03428)

Period

LOG(CASH)

LOG(EBANK)

LOG(NIBSS)

1

0.128116

0.222951

0.073182

(0.03169)

(0.02190)

(0.00652)

0.067199

0.144133

0.078853

(0.03970)

(0.03838)

(0.03442)

0.058599

0.159444

0.057127

(0.04205)

(0.02528)

(0.02284)

0.049698

0.145244

0.055218

(0.04321)

(0.02928)

(0.02443)

0.042458

0.139374

0.045522

(0.04280)

(0.02957)

(0.02479)

0.037079

0.131456

0.039662

(0.04190)

(0.03162)

(0.02575)

0.032164

0.124368

0.033534

(0.04062)

(0.03337)

(0.02657)

0.027967

0.117433

0.028391

(0.03936)

(0.03513)

(0.02722)

0.024222

0.110822

0.023778

(0.03808)

(0.03671)

(0.02765)

0.020918

0.104501

0.019742

(0.03680)

(0.03809)

(0.02785)

Response of LOG(NIBSS):

2

3

4

5

6

7

8

9

10

Source:

Author‟s

Computation

from

E-views,

2014

JORIND 13(2) December, 2015. ISSN 1596-8303. www.transcampus.org/journal; www.ajol.info/journals/jorind

The results of the dynamic relationship among cash based transaction, Nigeria Inter-bank Settlement Systems (NIBSS) and electronics payment as depicted from the impulse response analysis indicated that in the first six-months, the effect of NIBSS facilitation on cash based transaction is 12.8% while that of electronics payment transaction is 22.3%. In the next sixmonths, the effect of NIBSS facilitation on electronics payment transaction is 14.4% while accounted for 6.7% effect on cash based transaction. However, for the periods under study, the effects of NIBSS facilitation on cash based transaction and electronics payment transaction are 5.9%; 5%; 4.2%; 3.7%; 3.2%; 2.7%; 2.4%; 2.1% and 15.9%; 14.5%; 13.9%; 13.1%; 12.4% 11.7% 11.1% 10.5% for third six-months to the tenth six-months respectively. The results reveal that over the period of study, NIBSS facilitates electronics payment transaction more than the cash based transaction. These findings confirmed that for the last ten months in Nigeria, the cashless policy has gradually taken root. We derive from these results therefore that in the recent time, banks customers are beginning to use more of electronics payment more than cash based payment even though periodic fluctuations have been observed. Conclusion Contrary to the pessimistic views about the success of the cashless policy, we establish that for the last ten months of the period of study in Nigeria, the cashless policy has gradually taken shape. The Nigerian Inter-bank Settlement Systems (NIBSS) has facilitated more electronic payment transaction than cash based transaction. It simply means that in the recent time, bank customers are beginning to use more of electronic payment than cash based payment even though periodic fluctuations have been observed. We therefore conclude that electronic payment successfully complements and is gradually going to replace the existing cash mode of payment. It can also be said that a good percentage of the Nigerian bank customershave accepted the electronic means of payment. The trend analysis provides an interesting support for the impulseresponse and variance decomposition. They all point to the fact that the use of cash mediums of

payments has significantly reduced when compared to that of the electronically based mediums of payment. Recommendation Therefore, the Nigeria interbank settlement system (NIBSS) through the approval of the government and the Central Bank of Nigeria should create awareness of the services rendered by them in order to smoothen the upward and downward movement of the trendin electronic payment. An important way to do this is by expanding the electronic mediums of payments to rural areas of the country. More automated teller machines (ATM),point of sale (POS) services should be provided coupled with regular and effective enlightenment on how to use them. The Nigerian interbank settlement system should expand the electronic mediums like the near field communication (NFC) which is now available in most developed countries; the POS Dongle which is a much more convenient means than the widely known ATM device popularly seen in the country in which an application has to be developed should be provided en-mass;ensure user friendly devices and secure transactions to be performed on electronic mediums of payment; then NIBSS should also ensure increased interconnectivity among all the mobile money operators in the country to encourage increase in mobile money transactions. There is the need to connect all functioning electronic payment devices particularly ATM to NIBSS. Current statistics show that NIBSS handles only one ATM leaving other private switches to handle the ATM transactions of other banks. In addition to the aforementioned, NIBSS can introduce an antifraud management system to complement their other activities and also reduce the level of fraud and increase the level of confidence on e-payment channels. References Akhavein, J., Frame, S., and White, L (2000) The diffusion of financial innovations: An examination of the adoption of small business credit scoring by large banking organizations,Journalof Business, 78(2), 577–596.

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Odior, E.S and Banuso, F.B (2013) Cashless banking in Nigeria: challenges, benefits and policy implications, European Scientific Journal 8(12) June 289-314 Oyewole,O.S., Gambo, E.J., Abba, M., Onuh, M.E (2013) Electronic payment system and economic growth: A review of transition to cashless economy in Nigeria,International Journal of Scientific Engineering and Technology, 2, Issue 9, 913-918 Xiaonan, C. (2011) Markov type models for largevalued interbank payment systems, A thesis submitted for the degree of Doctor of Philosophy, University of Edinburgh, 1-4 Yaqub, J.O., Bello, H.T., Adenuga, I.A., Ogundeji, M.O (2013) Cashless policy in Nigeria: prospects and challenges, International Journal of Humanities and Social Science 3(3), 200-212

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