Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol.6, No.2, 2015 37 Cashless Policy and Customers' Satisfaction: A Study of Commercial Banks in Ogun State, Nigeria Alao, A. Adeniyi (Corresponding author) Department of Accounting, College of Social and Management Sciences, Crescent University, P.M.B. 2104 Sapon, Abeokuta, Nigeria E-mail: alaoadeniyi07@yahoo.com Sorinola, O. Olutayo Research student, Department of Accounting, College of Social and Management Sciences, Crescent University, P.M.B. 2104 Sapon, Abeokuta, Nigeria Abstract The advent of cashless policy into the Nigerian banking sector has brought mixed feelings to all stakeholders in the sector. The development has brought relief to a segment dominated by the operators (bankers), while the other segment dominated by the customers has complained about the challenges associated with the operation of the policy. Therefore, this study seeks to investigate the customers’ satisfaction of the recently introduced cashless policy in Ogun State, Nigeria with a survey of bank customers in Abeokuta. Data was collected with a well structural questionnaire and analyzed with descriptive statistics, while hypotheses formulated for the study were tested with correlation co-efficient.The findings of the study reveal that cashless policy contributed significantly to customers’ satisfaction in Ogun State. Also, the study revealed that cashless policy contributed significantly to customers’ satisfaction through electronic channels.Finally, the study concluded that the cashless policy is customer friendly and progressive. Hence, it was therefore recommended, among others, that infrastructures should be improved upon to ensure easy operation of the policy in Ogun state. Keywords: Cashless policy, Customers’ satisfaction, Nigerian banking sector, Customers’ orientation and Banking performance 1.0 INTRODUCTION The recent innovation of technology for financial transactions poses interesting questions for policy makers and financial institutions regarding the suitability of current institutional arrangements and availability of instruments to guarantee financial stability, efficiency, effectiveness of monetary policy and achievement of sustainable economic growth in Ogun State. Over the course of history, different forms of payment systems have been in existence. Initially, “trade by barter” was common. However, the problems of barter such as the double coincidence of wants necessitated the introduction of various forms of money. Nevertheless, pundits have been predicting the complete demise of study instruments and the emergence of potentially superior substitute for cash or monetary exchanges that is cashless society (Wikipedia 2011). Since Nigeria‘s Independence in 1960, there have been different governments, constitutional reforms, change in economic policies and banking reforms, mainly directed at enhancing social welfare and achieving developmental goals but there has been no substantial positive change in Nigeria‘s Human Development Indicators. This also calls to question the effectiveness of the cash-less policy of the Central Bank of Nigeria (CBN) in some selected states in Nigeria, a particular reference to Ogun State. At the end of the 1980s, the use of cash for purchasing consumption goods in the US has constantly declined (Humphrey, 2004). Hence, most LDCs (Less Developed Countries) like Nigeria are on the transition from a pure cash economy to cash-less one for developmental purposes. According to CBN, the new cash policy was introduced for a number of key reasons, including: To drive development and modernization of our payment system in line with Nigeria‘s vision 2020 goal of being among 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 Nigerian economic growth. To reduce the cost of banking services (including cost of credit) and drive financial inclusion by providing more efficient transaction options and greater reach and to improve the effectiveness of monetary policy in managing inflation and driving Nigerian economic growth (CBN,2013). In addition, the cashless policy aims to curb some of the negative consequences associated with the high usage of physical cash in the economy, including: high cost of cash: high risk of using cash, high subsidy, informal economy and inefficiency & corruption (CBN, 2011). In Ogun State, customers of banks today are no longer about safety of their funds and increase returns on their investments only. Customers demand efficient, fast and convenient services. Customers want a Bank that will offer them services that will meet their particular needs (personalized Banking) and support their Business goals for instance; businessmen want to travel without carryout cash for security reasons. They want to be able to check their balance online, find out if a cheque is cleared, transfer funds among accounts and even