ABSTRACT
Cashless economy has ushered in the cashless banking framework across different countries of the world and this is made possible by the advances in information technology. Electronic cash is a term becoming more acceptable as the world makes a shift towards a cashless society. This research work presents the development of a mobile payment system which implements cashless economy. The main aim of this development is to reduce some cash-related crimes in our society such as: robberies, the risk of losing cash in the case of fire and flooding incidents, inefficiency and corruption associated with cash usage like leakages, money laundering, amongst other cash-related fraudulent activities. The mobile payment system developed produces services operated under financial regulation and performed from or via a mobile device. Instead of paying with cash or check, a consumer can use a mobile phone to pay for a wide range of services, digital or hard goods. This payment system is a service system where the consumer sends a payment request via an SMS text message to a short code, the merchant involved is informed of the payment success and can then release the goods paid for. AT commands for VB.Net programming language is the tool used in the development of this mobile payment system with Mysql as the database.
CHAPTER ONE
INTRODUCTION
1.0 Introduction
Throughout the developing world, there is a strong
focus on improving information technology. In this view, many believe that the
use of information and communication technology (ICT) is a key that can help to
address certain problems that required constant attention, like monitoring,
controls, security and other commercial businesses. In the early 1940s,
computers were used only for calculating and solving of trigonometric problems,
as time went on, the use of computers extended to data processing applications,
results oriented programs etc (Wikipedia). Today, Information Technology has
advanced to the extent that it has made life more comfortable and efficient.
The comfort of being able to pay for goods and services from any point of
transaction, using mobile payment system
has become a vital issue as it saves a lot of time and the risks involved in
carrying cash.
Mobile phones can substitute for travel, allow
quicker and easier access to information on prices, enable traders to reach
wider markets, boost entrepreneurship and generally makes it easier to do
business. Mobile phones have become devices for paying merchants, receiving
time sensitive information such as stock quotes, and aid in critical business
processes in many countries. Mobile Payment System (MPS) is an innovative
application on the mobile phone platform that allows a person to initiate a
transaction and make a payment using a mobile phone. MPS as an emerging payment
system allows commercial transactions to be carried out anytime, anywhere and
by anyone with a mobile phone which is a form of payment system that supports
the emergence of Cashless economy. Cashless economy is gaining more and more
significance nowadays due to the widespread of Point Of Sale (POS) terminals in
stores. This payment system is where paper money is replaced with electronic
money which is facilitated with the advances in technology. As witnessed in the
invention of the internet, the development of electronic account systems and
the increasing sophistication in major industries all around the world, paper
money (cash payment system) is becoming functionally less important as its
functions are been reduced potentially and drastically.
Cash payment system is the popular form of payment
with customers as transactions are completed immediately and it can also be
used for another transaction, making them a cash-based economy. Payment with
cash is simply using physical cash to make payments. This is the most common
form of payment prevailing in most developing countries. The majority of
African countries still have cash and cheque economies.
1.1 Statement
of the Problem
According to Ovia (2002), Nigeria is largely a
cash-based economy with large percentage of funds residing outside the banking
sector as against the developed world, where the money in circulation is for
example 4 percent in US and 9 percent in U.K. Whereas the cash-based economy is
characterized by the psychology to physically hold and touch cash, a culture
informed by ignorance, illiteracy, and lack of security consciousness and
appreciation of the merit of digital payment.
There are so many problems observed that are
associated with Nigerian’s cash-based economy, which include:
- Delays in financial transactions which
can be caused by queue in the bank or ATM to collect cash.
- Spread of bacteria through handling
physical cash
- High rate of crime, illegal drug trade,
terrorism, illegal immigration, human trafficking, corruption, due to its
cash-based economy. People are always faced with the challenges of violent crimes
(insecurity) such as, bank and ATM robberies, store holdups, armed robberies,
employee cash theft, armor car heists, kidnap for ransom, and purse snatching
as the system of physical cash been used is non-traceable, unaccountable, easy
to hide or lose, steal, counterfeit and spend without a trace, as such paper
cash has allowed all sorts of criminal activities to thrive.
- Too much cash in circulation which
causes inflation to rise, and as inflation rises, it diminishes the purchasing
power of consumers, making it undesirable to hold cash.
The use of Mobile Payment System can address these
disadvantages associated with cash payment system.
- Objectives of the Study
The Objective of this research work is to develop a
prototype application to simulate the real world Mobile Payments applications
that will help to:
- Make
faster transactions – reducing queues at the banks, ATM points and points of
sales by eliminate time spent on collecting, counting and sorting cash.
- Improve hygiene on site – eliminating
the bacterial spread through handling of notes and coins.
- Help eliminate the crimes associated
with the cash economy and improve the security consciousness of individuals and
remove the common fear associated with using physical cash.
- Help check inflation by reducing the
amount of cash in circulation.
- Enhance the Central Bank of Nigeria
(CBN) new policy on cashless economy.
1.3 Significance
of the Study
The study will foster the reduction
of some disadvantages associated with cash-based economy to the government,
banks, merchants and customers. It will seek to:
- Offer huge cost savings to the
government because the use of Mobile payment system will reduce cost of
printing paper currency.
- Obviate the need to transport, handle,
store and dispense physical cash as mobile payment system will offer enormous
savings to the banks and merchants
- Enable customers to conveniently pay for
their goods and services without the inconveniences associates with withdrawing
cash, especially those that are staying far from banks or ATMs stands.
- Provide more security to the business
owners who will be saved from the stress of ensuring that they deposit the cash
realized on daily basis in the bank due to the fear of financial loss in the case of fire,
flooding incidents, armed robbery or domestic crisis.
- Also drive development and
modernization of our payment system in line with Nigeria’s vision 202020 goal
of being amongst the top 20 economies by the year 2020. An efficient and modern
payment system is positively correlated with economic development, and is a key
enabler for economic growth.
1.4 Scope
and Limitations of the Study
This research work is to develop a mobile payment system
that can handle the payment for goods and services obtainable only in Nigeria.
The project was left without certain
limitations which include:
- ]The transaction must be made in a location where network signal (like GLO, MTN, etc) is available.
- Because the cashless policy is a new system in Nigeria, the researcher encountered challenges in data collection.
- Financial constraints posed a great challenge to the success of this project.
DEVELOPMENT OF MOBILE PAYMENT SYSTEM: AN IMPLEMENTATION OF CASHLESS ECONOMY
