Impact Of Cashless Society On Emotional Value And Significance Of Money
(A Case Study Of The Nigeria Economy)
The transition towards a cashless society profoundly influences the emotional value and significance attributed to money. With the proliferation of digital payment systems, traditional tangible currency’s emotional resonance diminishes as individuals interact less frequently with physical money. This shift alters perceptions of money from a tangible symbol of wealth and security to a more abstract concept tied to digital transactions and accounts. Consequently, the emotional attachment to money evolves, with emphasis placed on convenience, security, and efficiency rather than the physical presence of cash. However, this transition also raises concerns regarding privacy, security, and detachment from the tangible representation of wealth. As society navigates this transition, understanding and addressing these emotional shifts becomes crucial for financial literacy and well-being in the increasingly digitized financial landscape.
This study examined the impact of cashless society on emotional value and significance of money with emphasis to Nigeria economy. The main aim of the study was to determine the cashless policy affect the Nigeria economy. Primary sources of data was adopted which involves the administration of questionnaires designed in likert scale format. The design adopted for the study was survey research design and data administered were analyzed percentages and t-test with the aid of Spss. The study finds out there is significant relationship between values of cash transfer from Automated Teller Machine on Gross Domestic Product and Value of point of sale has significant relationship on Gross Domestic Product.It was recommended that there is need for an increase in installation of more automated teller machine in the country and particularly Bida, Niger State. This will in turn increase the gross domestic product and the cost associated with transacting with point of sale terminals should be reduced so as to encourage e-banking policies thereby increasing the gross domestic product.
Title Page
Certification Page
Approval Page
Dedication
Acknowledgement
Abstract
Table of Contents
CHAPTER ONE:
INTRODUCTION
a. Background of the Cases 1
b. Statement ofProblem 3
c. Research Questions 4
d. Objectives of the Study 4
e. Contribution to Knowledge 5
f. Scope and Delimitation of the Study 5
g. Sample Size 5
h. Formulation of Hypotheses 6
i. Definition of Terms 6
CHAPTER TWO:
LITERATURE REVIEW
2.0 Introduction 8
2.1 Historical Background of the Case Study 8
2.2 Conceptual Frameworks 10
2.2.1 Concept of Cashless Policy 10
2.2.2 Reasons for Introduction of Cashless Policy 16
2.2.3 Nigeria Move to Cashless Regime 18
2.2.4 Cashless Banking Channels 21
2.2.5 Essentials of Cashless Economy 23
2.2.6 Problems of Cashless Banking in Nigeria 25
2.2.7 Significance of Money 27
2.3 Theoretical Framework 30
2.3.1 Technology Acceptance Model Theory 30
2.3.2 Diffusion of Innovation Theory 31
2.4 Review of Empirical Studies 31
CHAPTER THREE:
RESEARCH METHODOLOGY
3.1 Introduction 39
3.2 Research Design 39
3.3 Study Population 39
3.4 Sample Size and Sampling Technique 39
3.5 Types of Data Required 40
3.6 Instruments of Data Collection 40
3.7 Methods of Data Presentation 40
3.8 Methods of Data Analysis 40
3.9 Limitations of the Study 40
CHAPTER FOUR:
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 Introduction 41
4.2 Data Presentation, Analysis and Interpretation 41
4.3 Discussion of Results 49
4.4 Test of Hypotheses 49
CHAPTER FIVE:
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.0 Introduction 51
5.1 Summary of findings 51
5.2 Conclusion 52
5.3 Recommendations 53
References 54
Appendix 57
INTRODUCTION
1.1 Background of the Cases
Currently in Nigeria, there are already some shades of cashless transactions in place. Today there exists up to seven different electronic payment channels in the country. Automated Teller Machines (ATM), points of sale terminals, mobile voice, web, inter -bank branch and kiosks. It is needless to say that the Cashless policy initiative in Nigeria has largely been undertaken by indigenous firms and is stimulated by improvements in technology and infrastructure. (Akhalumeh & Ohiogha, 2012).
To further drive the policy, the CBN, in its pilot scheme in Lagos has now (after reviews) set daily cumulative withdrawals and deposit limits to N500,000 for individuals and N3 million for corporate bodies. Penalty fees of N100 and N200 respectively (now reduced to 50 percent and 13percent respectively are to be charged per extra N1, 000 (Ezumba, 2011). It then follows that, what is anticipated by this policy is that instead of large cash withdrawals for payments for goods and services, such monies ought to be kept in the banking system, so that payments can be made electronically.
However, while the gain in operating a cashless policy might be enormous, it must be pointed out that transactions in a cashless economy are not entirely free as the CBN might have us believe. For instance, using the POS comes with a hefty price tag of 1.25 percent of the cost of every purchase or transaction that is effected, in addition to the N5 for every N1,000 commission on turnover that is deposited, which banks are allowed by CBN to charge every time money is taken from the account (Omose, 2011). Lawal, (2012) posited that while so much has been said about the likely gains of a cashless economy (or cashless banking), in real concrete terms, the people are not convinced that the agenda like anything Nigerian is for the good of all. This is the result of culture of doubt which currently pervades the minds of our people.
But the report of the Technical Committee on e-banking by the Central Bank in 2003, e-banking is a means whereby banking business is transacted using automated processes and electronic devices such as personal computers, telephones, facsimile, internet, card payments and other electronic channels. It further states that some banks practice electronic banking for informational purpose, some for simple transactions such as checking accounts balance as well as transmission of information, while others facilitate funds transfer and other financial transactions. Therefore, since Cashless banking is a kind of banking that involves electronic form of money transmission; here banking services are fully automated such that transactions are concluded in jiffy, since e-banking involves the use of computer network in dispensing cash and transfer of funds. However, it is not suggestive or implied that e-banking refers to an outright absence of cash transactions, in the economy, rather, it connotes one in which cash- based transactions are kept to the barest minimum.
(Ojo 2013) in Nigeria, the need to improve the payment system has become increasingly important having realized that the design of payment system has important implication for the conduct of monetary policy, the soundness of financial institution and the functioning of the economy at large. Ayodele(2014) note that this era of dwindling financial system stability in Nigeria has resulted into erosion of confidence by the populace, the need to pay more attention on the status of the Nigeria payment system via the electronic banking (e-banking) is very genuine.
In view of the above, it is therefore hoped that this study would bring out some of the impact of cashless society on emotional value and significance on the Nigeria economy.
1.2 Statement of Research Problem
An efficient and modern payment system is expected to reduce the cost of banking services (including cost of credit) and drive financial inclusion by providing more efficient transaction option and greater reach and to improve the effectiveness of monetary policy in managing inflation and driving economic growth. In addition, the cash policy aims to curb some of the negative consequences associated with the high usage of physical cash in the economy including high cost of cash, high risk of using cash high subsidy, informal economy and inefficiency and corruption, Central bank of Nigeria (2012).
Cobb (2014) pointed out that the value of electronic payment goes way beyond the immediate convenience and safety of cards to a greater sphere of contributing to overall economic development. Consequently this is expected to enhance efficient financial intermediation. Undoubtedly the last three decades have witness major advancement in payment technologies as Nigeria electronic payment (e-payment) landscape is on new threshold with banks switching and transaction companies, vendors of automated teller machine(ATM) and point of sale (POS).
1.3 Research Questions
In other to achieve the objective to this study the following research questions were raised:
i. To what extent does value of cash transfer from Automated Teller Machine affect Gross Domestic Product?
ii. To what extent does value of Point of Sale affect Gross Domestic Product?
1.4 Objectives of the Study
The objectives of the study are to determine the effect of cashless policy on Nigeria economy. Other specific objectives of the study includes:-
i. To examine the relationship between value of cash transfer from Automated Teller Machine on Gross Domestic Product.
ii. To examine significant relationship between value of Point of Sale on Gross Domestic Product.
1.5 Contribution to Knowledge
The significance of the study is to properly evaluate the impact of cashless society on emotional value and significance of money on the Nigeria economy and it implementation. It also hoped that the research will explain cashless society where if thoroughly practices it will benefit all Nigerians. The study will be of help in carrying out research in electronic banking and electronic payment via e-banking as it will present suitable solution to such factor negating cashless society in Nigeria economy.
1.6 Scope and Delimitations of the Study
The scope of this study is to assess the impact of cashless society on emotional value and significance of money on the Nigeria economy. Attention will also focus on electronic banking, mobile banking and internet banking among other electronic commerce implementation. The study is delimited to cover electronic banking channels in Nigeria for a period of ten years (2009-2018).
1.7 Sample Size
The sample size which the study considered relevant for data analysis was POS users and owners (20), Mworld Café (15), Business Centre’s, Businessmen, Supermarkets (20) and Students (20). This was based on judgmental technique adopted by the study.
1.8 Formulation of Hypotheses
In order to achieve the objective of this research work, the following hypotheses was formulated:
H1: There is no significant relationship between value of cash transfer from Automated Teller Machine on Gross Domestic Product.
H2: Value of point of sale has no significant relationship on Gross Domestic Product.
1.9 Definition of Terms
For the purpose of this study, the following terms mean:
Electronic Transaction: A grouping of information or data stored electronically in a defined format that has a distinct meaning as a set.
Automated Teller Machine (ATM) is a computerized telecommunications device that provides the customers of a financial institution with access to financial transactions in a public space without the need for a human clerk or bank teller.
Internet/Web payment: The internet is an innovative form of information technology, yet most commercial web sites function as well-defined information systems. The internet banking, compared to traditional banking system, heavily involves no-human interactions between customers and online bank information systems.
Electronic point of sales (EPOS) electronic payment system is user friendly simple multi-functional equipment with many possibilities of use. It enables the operators to administer payments by the customer in a simple way and subsequently to record the payments for clear accounting purposes.
Mobile payment or known also as Mobile wallet is an alternative payment method. Instead of paying with cash, cheque or credit cards, a consumer can use a mobile phone to pay for a wide range of services and digital or hard goods such as: transportation fare (bus, subway or train), parking meters and other services; Books, magazines, tickets and other hard goods; Music, videos, ringtones, online game subscription or items, wallpapers and other digital goods.
Electronic banking – it generally implies a service that allows customers to use some form of computer to access account-specific information and possibly conduct transactions from a remote location – such as at home or at the workplace.
Internet: is a worldwide, publicly accessible series of interconnected computer networks that transmit data by packet switching using the standard internet protocol.
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Impact Of Cashless Society On Emotional Value And Significance Of Money:
The transition to a cashless society can have a significant impact on the emotional value and significance of money. Here are some of the key ways in which this transition can affect our relationship with money:
- Tangibility and Emotional Attachment: Physical cash has a tangible quality that can create a stronger emotional connection to money. When you hold cash in your hand, you can feel its presence, and this can make spending it more emotionally significant. In a cashless society, money becomes more abstract, existing as digital numbers on a screen. This can reduce the emotional attachment people have to their money.
- Transparency and Awareness: Cashless transactions often come with real-time digital records of every expenditure. This increased transparency can make people more aware of their spending habits. When using cash, it’s easier to lose track of small expenses, but in a cashless society, every transaction is recorded, potentially leading to better financial management.
- Impulse Spending: The ease of making cashless payments, such as swiping a credit card or using a mobile app, can lead to more impulsive spending. Without the physical act of handing over cash, people may not feel the same sense of loss when making a purchase, which can make it easier to overspend.
- Security and Anxiety: While cashless transactions offer security benefits, such as reduced risk of theft, they can also create anxiety around cybersecurity and identity theft. People may worry about the security of their digital assets and be more cautious about their financial information.
- Digital Disconnect: In a cashless society, there can be a sense of detachment from the physical world, as more transactions occur in the digital realm. This can impact the way people perceive the value of money, as it becomes more abstract and less tied to physical objects.
- Ease of Giving and Sharing: Cashless transactions make it easier to send money to friends and family, donate to charities, or support causes online. This can increase the emotional significance of money in terms of generosity and social connections.
- Financial Literacy: Cashless transactions require a certain level of financial literacy to understand digital statements, fees, and payment methods. This can affect how people perceive the value of money and their ability to manage it effectively.
- Debt Management: The convenience of cashless payments can lead to the accumulation of debt, as people may be more inclined to borrow or use credit cards without a clear understanding of the financial consequences. This can impact the emotional value of money in terms of stress and financial well-being.
In summary, the transition to a cashless society can alter our emotional connection to money in various ways. It can make money feel more abstract and less tangible, increase transparency and awareness of spending, change spending behavior, and influence perceptions of security and financial literacy. The impact on individuals’ emotional value and significance of money will vary based on their personal experiences and attitudes towards technology and finance.