International Journal of Science and Management Studies (IJSMS) E-ISSN: 2581-5946 Volume: 02 Issue: 01 January to February 2019 www.ijsmsjournal.org © 2019, IJSMS Page 38 The Prospects and Challenges of PoS as Electronic Payment System in Nigeria Amaefule, I.A. #1 , Njoku, O. D. *2 , Agbakwuru, O. A. #3 , Chilaka, U. L. #4 #1,3,4 Department of Computer Science, Imo State University, Owerri, Nigeria *2 Department of Computer Science, Covenant Polytechnic, Owerrinta, Abia, Nigeria Abstract With the growing use of sophisticated electronic technology for e-financing globally, the introduction of PoS into the Nigeria economy has facilitated the ease of doing business without necessarily going about with huge cash in wallet. This paper has presented the prospects and challenges of Point of Sale (PoS) as electronic payment system in Nigeria. The study aimed to investigate the acceptance and issues surrounding the effective use of PoS for carrying out e-payment in Nigeria. Descriptive method was used to collect data from PoS merchants’ customers, who were orally interviewed in Owerri. The responses obtained show that majority of the customers interviewed were of the opinion that PoS was convenient and fast. Also, majority expressed high level of trust on the use of PoS. However, significant number of the customers still maintained that network failure, excessive charge on the use of PoS for making payment, security, unlimited number of PoS and other financial transaction irregularities affect the efficient use of PoS. These challenges may hinder the full adoption or acceptability of PoS in Nigeria. These challenges are however not peculiar to growing economy like Nigeria and as such, with strong commitment by stakeholders including government and private businesses in the financial sector, the Nigeria economy will witness accelerated growth in the adoption of PoS for making e- payment. Keywords — Challenges, E-payment, Nigeria, PoS, Prospects I. INTRODUCTION The use of electronic payment (e-payment) system in carrying out financial services and transactions has taken a centre stage in the world economy with developing countries such as Nigeria harnessing it for growing their economic financial inclusiveness. These systems make use of Information and Communication Technology (ICT) network facilities. E-payment systems, as automated processes, are used to exchange monetary value among stakeholders doing business transactions and transferring this amount of money over ICT network (Ayo and Ukpere, 2010). E-payment can be done using Debit or credit cards, online portals, Point of Sales (PoS) terminals, Automated Teller Machines (ATMs), direct debit/deposit, and Real Time Gross Settlement (RTGS) system (Nnaka, 2009; Ayo and Ukpere, 2010). This paper considers the PoS e-payment channels as a growing financial system that is gaining widespread acceptance in making payment in virtually all business locations in Nigeria today. According to online report by Kingston (2018), the use of PoS terminals for payments has made Nigerians to use less cash for financial transactions more than ever. For instance, a record of 1.4 trillion naira was achieved in Nigeria using PoS for making transaction in 2017 (Achebe, 2018; Kingston, 2018). The use of PoS terminals to make financial payment in Nigeria was introduced by the Central Bank of Nigeria (CBN) in 2012 to promote its cashless policy with the aim of improving payment system. Ever since the introduction, there has been increasingly growth in the number of active PoS terminals provided by banks to mobile money merchants. In the first three months of 2018, for example, it was reported that a total of 17,193 PoS terminals were registered by banks for carrying out cashless transactions in Nigeria (Ogunfuwa, 2018). Statistical figures from the Nigeria Inter-Bank Settlement Scheeme (NIBSS) indicated that as of 2018, the number of active PoS terminals in Nigeria was 164,607. Also, in addition to this development, a record of 66.6% rise in transactions using PoS across the country was registered as at January, 2018 compared to the value registered using PoS for transaction in January, 2017. This trends was maintained in February, 2018 where an increase of 60.61% was registered compared to February, 2017. The attribution to this growth can be acceptance of PoS terminals for making payment and increasing ICT network penetration in Nigeria. However, the gain recorded, this paper examines the prospects and challenges of PoS terminals in Nigeria.