Information and Knowledge Management www.iiste.org ISSN 2224-5758 (Paper) ISSN 2224-896X (Online) Vol.6, No.12, 2016 7 An Integrated Model of the Factors Influencing the Adoption and Extent of Use of E-Payment Systems by SMEs in Nigeria *Dr Patrick Ohunmah Igudia Department of Business Administration, Ambrose Alli University, Ekpoma – Nigeria Abstract This paper investigates the factors influencing the adoption and extent of use of e-payment systems by SMEs in Nigeria. The paper develops an integrated model following a comprehensive review of literature in IS/IT adoption and diffusion in organisations. The paper used primary data culled from a survey conducted in Lagos state of Nigeria in 2012 for a PhD thesis. 239 SMEs were involved. Results of the logistic regression analysis show that three technology attributes (perceived benefits, perceived trust and perceived security), one organisation factor (firm IT infrastructure), one environmental factor (favourable government support policy), and two individual characteristics factors (IT knowledge and educational level) facilitated EPS adoption by SMEs in Nigeria. Furthermore, perceived complexity and age inhibited e-payment systems adoption by SMEs in Nigeria. With regard to the extent of use, perceived benefits, age, and perceived trust facilitated volume of use while perceived complexity and age influenced the breadth of use. Keywords: E-payment adoption, e-payment in Nigeria, IT/IS adoption by SMEs 1. Introduction The era of monetary exchange for goods and services started after the elimination of trade by barter (Sadeghi and Schneider, 2001). In barter, goods exchanged for goods directly. Ever since then, money and other forms of abstract media such as bank notes, payment orders, cheques and credit cards, over time have gradually been accepted as an abstract value for goods and services to facilitate exchange. The long list of exchange media has included in the most recent history the electronic payment systems (EPS). Electronic payment system (EPS) refers to the transaction of goods and services using electronic payment means such as computer networks, the internet, and digital systems to transfer money electronically or digitally between two parties (Wyllie et al., 2010:5). The recent EPS phenomenon was occasioned by the advent of technological revolution in trade and commerce. The brick and mortar payment techniques by banks (Ovia, 2002) in offering financial products and services to their customers have indeed changed. The previously used cash and cheque payment instruments by customers are thus either slowly but steadily being replaced in developing countries or completely overtaken by e-platforms in developed countries irrespective of the nature, distance, time, and place of business. Large and small organisations in developed economies like US, UK, Japan, Europe, and the emerging BRIC economies (Brazil, Russia, India and China) have over the years extensively and successfully increased the use of EPS to improve their participation in global trade and business activities (Akintola et al., 2011). However, the same cannot be said about many developing countries especially in sub- Saharan Africa such as Nigeria. It is even more so with SMEs in the sub-Saharan African countries. Literature indicates that SMEs in these countries are reluctant in adopting and using new technologies in general and EPS in particular. There are several reasons why SMEs in developing countries are reluctant to adopt and use the EPS despite its acclaimed importance. Some of such reasons include the high cost of acquiring telecommunication facilities (like computers, mobile phones, Internet subscription, etc.) and inadequate national infrastructure (such as lack of stable power supply and irregular and very slow internet services). Others include lack of perceived safety and security of money and payment information, high level of illiteracy, lack of adequate technical competencies, and lack of seriousness on the part of their governments to effectively implement extant laws on cyber crimes to protect both the consumers and merchants. These could explain why the SMEs in Nigeria are slow to adopting the EPS notwithstanding the fact that in recent past, there has been an improvement in the rate of adoption. Literature reveals that SMEs in Nigeria are slowly but steadily adopting the cards payments (Tooki, 2006), mobile phone payments (Jimoh, 2013), and ATM payments (Adeoti, 2011) even in the face of some reputation crises involving identity theft scourge with which the country has been associated. Without a doubt, EPS is important to the growth of economies as it helps to perform the monetary function, financial stabilisation function and the overall economic management function. Aside these three functions, EPS also facilitates trade (Sumanjeet, 2009) through e-commerce and e-business transactions, and makes payments very convenient, fast and easy (Winn, 2003, Ozkan, 2010). Despite its importance, empirical research stream relating to EPS in developing countries has been nothing but scanty (Kahn and Roberds, 2009; Gerdes and Walton, 2002). It is quite obvious from the literature review that the subject has not been sufficiently addressed to expose its importance to the understanding of the developing countries (Ifinedo, 2011). Hence, the importance of secure and efficient EPS to economic growth and development has so far not yet been given