Analysis of Prospects and Challenges of E-Payment System in Nigeria

Abstract

E-payment is an electronic transfer of cash via online transaction for business -to- consumer (B2C), business-to-business (B2B), person –to- person (P2P), and most recently administration -to- consumer (A2C) purposes. Nigeria payment system has been predominately cash – based. However the cost of cash to Nigeria financial system is high and increasing. It is in this respect that the Central Bank of Nigeria (CBN) introduced the cashless policy with the objective of promoting the use of e-payment channels instead of cash. E-payment system apart from convenience and safety also have a significant number benefits which include faster access to capital, reduced risk of cash-related crimes, access to credit, reduced cash handling costs, increased tax collections, reduced revenue leakage, greater financial inclusion, more service options, encouraged financial deepening and promotes savings, reduced risk in payments and settlements, increased economic development.