Full Project -THE PROSPECTS AND CHALLENGES OF ATTAINING CASHLESS LAGOS
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CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Over the course of history, there have been many different forms of payment systems. Originally, barter was quite common. Eventually, various forms of money were introduced. In mid-twentieth century, cards debuted. Ever since then, pundits have been predicting the demise of paper instruments and the emergence of a “cashless society.” Today, we still pay with cash and cheques, but several other payment instruments, such as credit and debit cards, are widely used. The use of paper money is declining, but several instruments, such as credit and debit cards, are widely used. The use of paper money is declining, but at a slow pace.
For years, analysts have predicted the elimination of physical cash as a transaction medium. Such a transaction medium has been referred to as a “cashless society.” Substituted in the place of cash would an electronic payment system, in one form or another. Some analysts look at such a prospect optimistically, believing that a cashless society would increase the efficiency of the economy. Still, others view such a prospect pessimistically believing that it would subject the most private details of the society’s lives to scrutiny and publication. Whatever the outcome, such a radical transformation will undoubtedly have a substantial effect on the credit card processing industry.
Many things have been exchanged in markets including, for example, livestock and sacks of cereal grain (from which the Shekel is derived) – things directly useful in themselves, but also sometimes merely attractive items such as cowry shells or beads were exchanged for more useful commodities.
Attention to the possibility of a cashless society has increased and intensified over the past several years. Those who are enthusiasm over the prospect of eliminating cash as transaction mediums believe that the immediate benefits would be profound and fundamentals. Theft of cash would become impossible. Bank robberies and cash end. Urban streets might very well become safer. Security costs and insurance rates might possibly fall. Property values could very well rise. The sale of illegal drugs, along with related violent crime could diminish.
Not all proponents are as ecstatic about the benefits of a cashless society. However, regardless of the advantages, or disadvantages, some observers think that it might only be a matter of time before the cashless society becomes a reality.
A Cashless Society is one where cash (money) is not carried about. As a result, payments for goods and services are made through electronic means and by the use of quasi money. In the developed economies, broad money goes beyond Currencies in circulation plus Demands Deposit plus Time Deposit (M2 = CC + DD + TD) as it is in most developing economies. In a Cashless Society, broad money involves all these electronics means that facilitate payments for goods and services.
The initiative of a cashless economy will minimize associated risk of carrying huge cash for businesses and enhances economic growth for job creation.
1.2 Statement of the Problem
It is believed that the challenge for the cash-less policy is not paucity of alternative payment options any more, but getting the public to be acquainted with these options and embraces the system.
Our banks and financial institutions face two problems that are becoming more overwhelming with each passing day. First, they are drowning in paper. There is simply no practical way to cope with the amount of paper needed to record and verify the millions of personal and business transactions taking place every day of the year.
Second, when transactions are not only increasing in number but involving much larger amounts of money than ever before, essential control over those transactions is lacking. There are more and more instances of bad check passing and non-payment of bills.
Banks already have begun to cope with the first problem through electronic funds transfer, one aspect of which we see every day in the form of the automated bank teller machine. This use of the computer has contributed to alleviating the paper overload somewhat.
But as yet little has been done to solve this second problem–control.
Here, too, the solution lies in the computer. As almost all of us routinely use credit cards to make purchases, we have already made a radical departure from our traditional cash-oriented society. A logical extension of this trend should bring us a credit-card-size, dedicated computer that performs all personal financial transactions. Looking Ahead
This Card–and it can’t be far off–will identify you, give you and the bank your personal audit trial, balance your checkbook when you plug it into a phone line, buy food, clothing and houses for you. It will pay your rent and your utility bills. You will no longer have any need at all for cash–ever.
1.3 Aim and Objectives
Specifically, the objectives of the study are stated below:
- To identify the general area through which cashless society can be of great benefit to the masses.
- To show how fast and time saving cashless system can be when compared to the traditional system of paying cash for every transaction.
- To determine easier comparison of cashless system and cash system.
- To evaluate the extent to which the masses are willing to adopt the cashless system.
- To evaluate the problems associated with cashless system.
1.4 Relevant Research Questions
- How can the effectiveness of cashless system be measured in the society?
- How can the security threat in electronic transaction be resolved in a cashless society?
- What is the masses adoption of the cashless system in the rural area where illiteracy is more rampant?
- What are the benefits and advantages of cashless system over traditional cash system?
- How can the society fully embrace cashless system?
1.5 Relevant Research Hypotheses
In carrying out this research work these theoretical statements are made to serve as a direction on which the work will premised.
Ho: Cashless society will not have any effect on the masses of Lagos State.
H1: Cashless society will have a positive effect on the masses of Lagos State.
1.6 Scope of the Study
The research work will evaluate the prospects and challenges of attaining cashless Lagos, using Ajah market as a case study.
To achieve this, a random sampling of 100 respondents covering the entire Ajah Market, Lagos, shall be taken.
1.7 Limitation of the study: The study as perceived might face some logistic challenges in term of the time and the costs involve in carrying out the research, but nevertheless, it would strive to accomplish its aims and purpose.
1.8 Significance of the Study
It is hoped that the findings and recommendations of the study will be of great benefit through the following ways:
Society as a whole will gain as a result of the fact that most muggers and thieves will be put out of business because there won’t be any cash left to steal. Bad cheques will become a thing of the past. For example, you can’t use the Card to buy groceries without having the money in your account; the computer simply won’t accept the transaction. In some cases the computer will require voice identification–as well as voice verification–to complete a transaction. The Punishment Fits the Crime.
This system would be a boon to the Federal government too. The illegal “underground economy” of cash-only deals will disappear when individuals can no longer stash money in a safe deposit box and avoid declaring it as income.
1.9 Definition of Terms
Cashless Society; A Cashless Society is one where cash (money) is not carried about.
P.O.S. (Point of Sale): POS (Point of Sale) is a device that enables a seller receives payment electronically via e-payment channels like payment cards.
Payment cards: Payment cards are cards (usually plastic) that enable you pay for goods and services without the need for cash. ATM/debit card from your bank are payment cards so also are cards like Visa, MasterCard, Inters witch Verve, etc. These payment cards can be used to pay for goods and services at any merchant location where there is a supported PoS.
Mobile Money: Is the medium that allows users create to an electronic wallet for storing funds on their phone.
Debit cards: are operated on-line to the holder’s bank account. At a point of sale the card is swiped through an electronic funds terminal which activates a signal to the card holder’s bank to transfer the specified payment amount from the card holder’s bank account to that of the payee.
Prepaid cards: Prepaid cards are cards that have embedded value that can be used to purchase goods and services until the stored value is exhausted.
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