IDEAS home Printed from https://ideas.repec.org/a/spr/futbus/v6y2020i1d10.1186_s43093-020-00022-z.html
   My bibliography  Save this article

Electronic payment adoption and consumers’ spending growth: empirical evidence from Nigeria

Author

Listed:
  • Lukman O. Oyelami

    (University of Lagos)

  • Sulaimon O. Adebiyi

    (University of Lagos)

  • Babatunde S. Adekunle

    (University of Lagos)

Abstract

The study investigates the determinants of electronic payment adoption and the role of electronic payment on consumers’ purchase decisions as well as its effects on consumers’ spending growth in Nigeria. To achieve this, both primary and secondary data were deployed. The primary data were collected through a cross-sectional survey of banks’ customers who have experienced the e-payment modes in Lagos state, Nigeria. The questionnaire was designed in line with Likert scale and validated. Fifty copies of the questionnaire were piloted. The copies retrieved were subjected to Cronbach alpha test of reliability. All the six variables were found to be reliable ranging between 0.725 and 0.828 Cronbach alpha values, which are within the acceptable limit. The sample size for this study, as determined through Cochran formulae is 384. In like manner, the instrument of data collection was administered on 420 respondents by using the multistage sampling technique to sample respondents across five divisions (locations) of Lagos. The data retrieved were analysed using descriptive (frequency and percentage) and inferential statistics (Pearson correlation, hierarchical regression analysis and analysis of variance). The results revealed that there is a positive significant relationship between electronic payment systems determinants (convenience, security and safety, trust, social influence) and e-payment adoption in Nigeria. These variables accounted for more than half (3/5) of what influences consumers’ adoption of e-payment mode of transaction in Nigeria. The results from the estimations show that factors such as educational attainment, financial inclusion, income level, internet service availability and other financial infrastructures such as point-of-sale machines and mobile banking services are critical determinants of e-payment adoption in Nigeria. The results also indicate that electronic payment influences consumers’ purchase decisions and thus increasing consumers’ spending growth in Nigeria. The policy implication advanced by this study is that the Nigerian government can leverage on electronic payment to increase consumers’ spending and thus improve aggregate demand which will consequently stimulate investment and economic growth in the country.

Suggested Citation

  • Lukman O. Oyelami & Sulaimon O. Adebiyi & Babatunde S. Adekunle, 2020. "Electronic payment adoption and consumers’ spending growth: empirical evidence from Nigeria," Future Business Journal, Springer, vol. 6(1), pages 1-14, December.
    • Handle: RePEc:spr:futbus:v:6:y:2020:i:1:d:10.1186_s43093-020-00022-z
    DOI: 10.1186/s43093-020-00022-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1186/s43093-020-00022-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1186/s43093-020-00022-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Funmilola Omotayo & Oluwatobi Dahunsi, 2015. "Factors Affecting Adoption of Point of Sale Terminals by Business Organisations in Nigeria," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(10), pages 115-137, October.
    2. Weinian Liao & Jagdish Handa, 2010. "Is the Modern Economy Heading Toward a Cashless and Checkless One? Evidence from the Payments System in Canada," The IUP Journal of Bank Management, IUP Publications, vol. 0(4), pages 48-70, November.
    3. Todd D. Gerarden & Richard G. Newell & Robert N. Stavins, 2017. "Assessing the Energy-Efficiency Gap," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1486-1525, December.
    4. Drazen Prelec & George Loewenstein, 1998. "The Red and the Black: Mental Accounting of Savings and Debt," Marketing Science, INFORMS, vol. 17(1), pages 4-28.
    5. Feinberg, Richard A, 1986. "Credit Cards as Spending Facilitating Stimuli: A Conditioning Interpretation," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 13(3), pages 348-356, December.
    6. Tijani J. A & Ilugbemi A. O, 2015. "Electronic Payment Channels in the Nigeria Banking Sector and Its Impacts on National Development," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 521-531.
    7. Hirschman, Elizabeth C, 1979. "Differences in Consumer Purchase Behavior by Credit Card Payment System," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 6(1), pages 58-66, June.
    8. Roya Gholami & Augustine Ogun & Elizabeth Koh & John Lim, 2010. "Factors Affecting e-Payment Adoption in Nigeria," Journal of Electronic Commerce in Organizations (JECO), IGI Global, vol. 8(4), pages 51-67, October.
    9. Promothesh Chatterjee & Randall Rose & Jayati Sinha, 2013. "RETRACTED ARTICLE: Why money meanings matter in decisions to donate time and money," Marketing Letters, Springer, vol. 24(2), pages 109-118, June.
    10. Tijani, J. A. & Ilugbemi, A. O., 2015. "Electronic Payment Channels in the Nigeria Banking Sector and Its Impacts on National Development," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 521-531, March.
    11. Hock-Han Tee & Hway-Boon Ong, 2016. "Cashless payment and economic growth," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-9, December.
    12. Maryam Barkhordari & Zahra Nourollah & Hoda Mashayekhi & Yoosof Mashayekhi & Mohammad S. Ahangar, 2017. "Factors influencing adoption of e-payment systems: an empirical study on Iranian customers," Information Systems and e-Business Management, Springer, vol. 15(1), pages 89-116, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Saurabh Gupta & Sadananda Prusty, 2024. "Does consumer empowerment influence e-payment systems adoption? A digital consumer-centric perspective," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(3), pages 1-15, September.
    2. Li, Jiayi & Luo, Sumei & Zhou, Guangyou, 2023. "Electronic payment, natural environment and household consumption: Evidence from China household finance survey," International Review of Financial Analysis, Elsevier, vol. 85(C).
    3. Xuechao Sui & Xianhui Geng, 2021. "Continuous usage intention to e-transaction cards in wholesale markets of agriproducts: empirical evidence from China," Future Business Journal, Springer, vol. 7(1), pages 1-13, December.
    4. Manaf Al-Okaily & Abdul Rahman Al Natour & Farah Shishan & Ahmed Al-Dmour & Rasha Alghazzawi & Malek Alsharairi, 2021. "Sustainable FinTech Innovation Orientation: A Moderated Model," Sustainability, MDPI, vol. 13(24), pages 1-11, December.
    5. Hway-Boon Ong & Lee-Lee Chong, 2023. "The effect of cashless payments on the internet and mobile banking," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(1), pages 178-188, March.
    6. Abbas N. Albarq, 2021. "Effect of Web atmospherics and satisfaction on purchase behavior: stimulus–organism–response model," Future Business Journal, Springer, vol. 7(1), pages 1-8, December.
    7. Tsai-Ling Liu & Tyrone T. Lin & Shu-Yen Hsu, 2022. "Continuance Usage Intention toward E-Payment during the COVID-19 Pandemic from the Financial Sustainable Development Perspective Using Perceived Usefulness and Electronic Word of Mouth as Mediators," Sustainability, MDPI, vol. 14(13), pages 1-23, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yizhao Jiang, 2022. "The Influence of Payment Method: Do Consumers Pay More with Mobile Payment?," Papers 2210.14631, arXiv.org.
    2. Dilip Soman & Amar Cheema, 2002. "The Effect of Credit on Spending Decisions: The Role of the Credit Limit and Credibility," Marketing Science, INFORMS, vol. 21(1), pages 32-53, September.
    3. Falk, Tomas & Kunz, Werner H. & Schepers, Jeroen J.L. & Mrozek, Alexander J., 2016. "How mobile payment influences the overall store price image," Journal of Business Research, Elsevier, vol. 69(7), pages 2417-2423.
    4. Bernadette Kamleitner & Berna Erki, 2013. "Payment method and perceptions of ownership," Marketing Letters, Springer, vol. 24(1), pages 57-69, March.
    5. Ina Garnefeld & Andreas Eggert & Markus Husemann-Kopetzky & Eva Böhm, 2019. "Exploring the link between payment schemes and customer fraud: a mental accounting perspective," Journal of the Academy of Marketing Science, Springer, vol. 47(4), pages 595-616, July.
    6. Arvind Agrawal & James W. Gentry, 2020. "Why do many consumers prefer to pay now when they could pay later?," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(2), pages 607-627, June.
    7. Zha, Yong & Wang, Yuting & Li, Quan & Yao, Wenying, 2022. "Credit offering strategy and dynamic pricing in the presence of consumer strategic behavior," European Journal of Operational Research, Elsevier, vol. 303(2), pages 753-766.
    8. Khan, Jashim & Belk, Russell W. & Craig-Lees, Margaret, 2015. "Measuring consumer perceptions of payment mode," Journal of Economic Psychology, Elsevier, vol. 47(C), pages 34-49.
    9. Boden, Joe & Maier, Erik & Wilken, Robert, 2020. "The effect of credit card versus mobile payment on convenience and consumers’ willingness to pay," Journal of Retailing and Consumer Services, Elsevier, vol. 52(C).
    10. Liang Huang & Rafay A. Siddiqui & Anastasiya Pocheptsova Ghosh, 2024. "More of the same: Painful payment methods decrease variety seeking," Marketing Letters, Springer, vol. 35(4), pages 533-545, December.
    11. M. M. Naeser Seldal & Ellen K. Nyhus, 2022. "Financial Vulnerability, Financial Literacy, and the Use of Digital Payment Technologies," Journal of Consumer Policy, Springer, vol. 45(2), pages 281-306, June.
    12. Liu, Yunxin & Dewitte, Siegfried, 2021. "A replication study of the credit card effect on spending behavior and an extension to mobile payments," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    13. Dalla Costa, Aldo Fortunato & Mollica, Vito & Singh, Abhay, 2021. "Payment methods and the disposition effect: Evidence from Indonesian mutual fund trading," Journal of Behavioral and Experimental Finance, Elsevier, vol. 30(C).
    14. Ma, Qingguo & He, Yijin & Tan, Yulin & Cheng, Lu & Wang, Manlin, 2024. "Unveiling the Impact of Payment Methods on Consumer Behavior: Insights and Future Directions," OSF Preprints 3fphk, Center for Open Science.
    15. Zeballos, Eliana & Mancino, Lisa & Lin, Biing-Hwan, 2020. "Does how you pay influence the share of healthy items that you Buy? Assessing differences in nutritional quality of food purchases by payment type," Food Policy, Elsevier, vol. 92(C).
    16. Marie-Claire Broekhoff & Carin van der Cruijsen, 2022. "Paying in a blink of an eye: it hurts less, but you spend more," Working Papers 760, DNB.
    17. Kakkar, Vikas & Li, King King, 2022. "Cash or card? Impression management and restaurant tipping behavior," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 97(C).
    18. Yan, Ruiliang & Cao, Zixia, 2017. "Product returns, asymmetric information, and firm performance," International Journal of Production Economics, Elsevier, vol. 185(C), pages 211-222.
    19. Amit Poddar & Cameron Ellis & Timucin Ozcan, 2015. "Imperfect Recall: The Impact of Composite Spending Information Disclosure on Credit Card Spending," Journal of Consumer Policy, Springer, vol. 38(1), pages 93-104, March.
    20. Anurag Dugar & Mani Shreshtha & Rishabh Jain, 2014. "Cognitive Dissonance as an Effect of Indulging on Credit," Paradigm, , vol. 18(2), pages 155-166, December.

    More about this item

    Keywords

    E-payment; Adoption; Growth; ARDL; Survey; Consumer spending; Nigeria;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G2 - Financial Economics - - Financial Institutions and Services
    • E0 - Macroeconomics and Monetary Economics - - General
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:futbus:v:6:y:2020:i:1:d:10.1186_s43093-020-00022-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.