Project – THE IMPACT OF POS ON THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN NIGERIA

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ABSTARCT

This study was carried out to examine the impact of POS on the performance of small and medium enterprises in Nigeria. The study was specifically set to determine the level of POS adoption among small and medium enterprises in Nigeria, determine the contributions of POS to the performance of small and medium enterprises in Nigeria, and ascertain the factors affecting the utilization of POS among small and medium enterprises in Nigeria. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of small and medium enterprises owners in Asaba, Delta state. In determining the sample size, the researcher conveniently selected 119 respondents while 110 were received and 100 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables and mean scores, while the hypotheses was tested using Chi-square statistical tool. The result of the findings reveals that the level of POS adoption among small and medium enterprises in Nigeria is high. Furthermore, the study showed that the contributions of POS to the performance of small and medium enterprises in Nigeria includes: it’s convenience for performing transactions, it facilitates better purchasing / supplier order management, it simplify invoicing, it facilitate effective time management, it speeds access to fund and payment services, and it improves payment security. The study recommends that SMEs should embrace the innovation in the banking sector to take full advantage of advancement in technology to increase their financial performance. To mention but a few.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The mode of payment for goods and services has recently taken another dimension, especially in the urban areas of Nigeria. The use of this electronic machine for payment has brought a positive change as well as a controversial financial transaction in all spheres (or arguments and interested criticism) in business transactions. The recent introduction of cashless policy by Nigerian government in conjunction with the CBN has positively made business transactions easier and secured, especially in the aspect of electronic payment for goods and services. The cashless policy is not only indispensable for reduction of crime rates such as armed robbery attack on individuals and organizations, but also makes business and financial transactions simple, easier and convenient by this components of e-commerce (Egbunefu Chibuike (Ph.D) and Dr. (Mrs) E. A. Amadi, 2019).

Transactions, demands and purchase inarguably are daily and reoccurring phenomena in every society. The mode of payment can be traced back to the primitive system known as “barter system” where people pay for services and goods through exchange of goods and services possessed by each party and accepted for exchanged. However, following the challenge of mutual coincidence in wants of the two parties, there was a great metamorphosis into the use of money which is a generally accepted way of exchange of goods and services and payment for the same.

The recent development was the introduction of several e-payment methods which was aimed at reducing the dependence on cash-based economy which was found to be risky and difficult because money outside the banks cannot be subjected to regulatory and operational procedures (Adeoti 2013). Many nations of the world have developed an effective and efficient payments system whose transactions are required to guarantee and sustain their economic development.

Electronic commerce which is also known as e-commerce is usually associated with buying and selling of goods and services by the use of internet. (Ekpo, 2016) described ecommerce as a process of conducting business transaction involving business to business and business to consumer through a computer mediated networks which is distinguished by the establishment of electronic business relationships between business owners and final consumers.

One of such in Nigeria is the POS, following the introduction of the cashless policy in Nigeria. A point of sales (POS) is the point at which a retail transaction is finalized, usually coinciding with the moment a customer makes a payment in exchange for goods and services using his or her debit/credit card instead of cash. It is a device allowing the use of payment cards such as debit cards at a physical point of sale in making payments for transactions or demands made. Hence, this made it advantageous following its convenience and speed of operation. According to the report from the apex money regulatory body in Nigeria (CBN 2011), the epayment system has helped to solve many of the associated challenges arising in the country ranging from the exuberant cost arising from frequent printing of currency notes, currency sorting, cash movement, keeping large amount of cash, security cost of checking high incidences of robbery among others (Akerejola,2017).

One of the component used by micro-scale business operators for payments in Nigeria is the Point of Sales (POS) machines. According to (Uche, 2011), Point of Sales (POS) machine is a computer-based order-entry technology used by most micro-scale business owners to capture orders and store transaction receipts. A Point of Sale (POS) terminal is used to accept cards for payment of goods and services. It enables the card holder to have access to useful information concerning his account details through the useful utilization of the ATM cards.

1.2 Statemement Of The Problem

One of the reasons for setting up a shop/ business is to enable people buy goods and to make profits. The act of buying and selling must be done with terms and agreements that conform to the agreement of the participants involved. (Chukwuigwe, 2002) stressed that through the operations of business activities, peoples and economic needs would be met, which in turn, would contribute to the wellbeing of so many persons. Any person that produces goods and services or set up any activity that requires buying and selling is into business. There are different kinds of businesses but the commonest business within and around streets where ordinary people can transact business ranges from restaurants, kiosk, bakery and other micro-scale business. (Ande, 2008) stressed that Micro-scale business involves the exchange of goods and services among the people within a particular neighbourhood. It involves buying and selling of goods and services within a particular country. The cashless policy introduced by Central Bank of Nigeria in 2014, the rate of use of Point of Sale (POS) machines for payment is on a high side. A Point of Sale (POS) machine is the act of capturing of data and customer payment information in a particular terminal were the buying of goods and services are transacted. Meanwhile, there seems to be challenge in utilization of Point of Sale (POS) machines for payment by micro-scale business operators. The purpose for introduction of Point of Sale (POS) machines has been truncated by so many factors, ranging from operational incapability’s and unavailability of regular networks, to power supply. The skills and competencies required of micro-scale business operators to operate and utilize the Point of Sale (POS) machine is being frustrated by these afore-stated factors. The researcher therefore deemed it necessary to the impact of point of sale (POS) on small and medium enterprise in Nigeria.

1.3 Objective Of The Study

The general aim of this study is to examine the impact of POS on the performance of small and medium enterprises in Nigeria. To achieve this, the study will specifically:

1. Determine the level of POS adoption among small and medium enterprises in Nigeria.
2. Determine the contributions of POS to the performance of small and medium enterprises in Nigeria.
3. Ascertain the factors affecting the utilization of POS among small and medium

1.4 Research Question

The following questions will guild this study;

1. What is the level of POS adoption among small and medium enterprises in Nigeria?
2. What are the contributions of POS to the performance of small and medium enterprises in Nigeria?
3. What are the factors affecting the utilization of POS among small and medium?

1.5 Research Hypothesis

Ho: The use of POS does not play a significant impact on the performance of small and medium enterprises in Nigeria.

Ha: The use of POS plays a significant impact on the performance of small and medium enterprises in Nigeria.

1.6 Significance Of The Study

Small businesses that sell goods often have to rely on a point-of-sale system to handle their daily transactions and keep track of their working capital. While not every small business needs a device like this – for instance, many professional services companies can probably survive without the need for a card reader – for other companies, such as retail stores, a POS system is an absolute must.  In addition to tracking and handling monetary transactions, the POS system have special features which include inventory management and cybersecurity features to protect the sensitive financial information transmitted during the exchange. Not having a solid POS system with these crucial features can ultimately hinder a company’s competitiveness.

Without some of the capabilities of POS, such as creating regular sales records through receipts, maintaining inventory data which can help small-scale compete with other companies and win due to their advantages, POS systems provide a safe an efficient way of transacting especially when the cash involved is a large chunk.

According to a 2015 Capterra survey, 88 percent of companies have updated their POS software in the past five years, indicating that there is a good number of businesses that understand the need for maintaining an upgraded system. While this might seem like a high number of organizations making a big change in a relatively short period, the fact is that as technology improves, it’s also imperative for businesses to keep pace with these changes.

1.7 Scope Of The Study

The general focus of this study boarders on the impact of POS on the performance of small and medium enterprises in Nigeria. However, the study was carried out in Asaba, Delta state.

1.8. Limitations Of The Study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents.

In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed.

More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.

1.9 Definition Of Terms

Point Of Sale: According to the bottom line in 2016, a POS (Point of Sale) system is the combination of software and hardware to facilitate your business operations. A POS consists of software and hardware to run the software. Hardware may include a computer, a physical terminal, a scanner, a printer, and other devices to operate the point-of-sale software. The software tracks and organizes your store’s information.

1.10 Organization of the Study

The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the  review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study,  sample size determination,  sample size, abnd selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.

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Project – THE IMPACT OF POS ON THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN NIGERIA