Challenges and Prospects of E-payment Service: In the Case of Selected Ethiopian Commercial Banks.
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Date
2020-12
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A.A.U
Abstract
In Ethiopia cash is still the most dominant medium of exchange and electronic payment systems are at an embryonic stage. This study is aimed to assess the challenges and prospects of E-payment in Ethiopian commercial banks. The study was conducted based on the data gathered from five banks in Ethiopia; four private banks (Dashen bank, Zemen bank, Nib International bank and Awash bank) and one state owned bank (commercial bank of Ethiopia). Qualitative and quantitative research approach were used to answer the research questions that emerge through the review of existing literature and the experiences of the researcher in respect of the E-payment system in Ethiopia. The study statistically analyses data obtained from the survey questionnaire and interview. The study used descriptive statistics and Data was analyzed using a statistical package for social sciences (SPSS). The study identified basic benefits of E-payment for the customers and banks, which helps to enhance other banks to engage in such activity. It also indicated that the major challenges Ethiopian banking industry faces in the practice E-payment system are, Organizational related problems (lack of awareness creation and public confidence, lack of system readiness, lack of trust and lack of responsiveness), infrastructure related (lack of network penetration, power disruption and lack of alternative power and network) and socio-cultural challenges include (fear of risk, society perception to emerging technology). Prospects of E-payment system in Ethiopia; Digital Economic policy is the most important opportunity in Ethiopian e-payment system, liberalization of telecom sector, competitive e-payment channel, emerging need and innovation. The study suggests recommendation: the banks should run campaigns, promotions and adverts, which aim at educating their customers on the need to adopt electronic payment services deeply into technical areas to develop confidence and public awareness. Banks also should make their e-payment instruments ready, motivating e-payment support staffs to immediate e-payment users’ support and make clear the limit of daily e-payment transaction limit. To overcome network and power challenges, the banks should create better strategic partnership with telecom sector and electric power providers, installing 4G network and generators for e-payment users where e-payment instruments locate. To use the prospects (opportunities), the banks should being prepared for digital economy policy of Ethiopia, emerging need, restructuring of network infrastructure provider (ethiotelecom) and competitive e-payment channels. By drafting bank based (modified) digital policy, identifying and hiring emerging (prospect) e-payment customers, developing criteria to select network provider and e-payment channel provider based on latest e-payment owners and users’ criteria
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Keywords
commercial banks, prospects-payment