adoption of e-payment or internet delivery channels

adoption of e-payment or internet delivery channels

Profits

According to Hernando and Nieto (2006), adoption of e-payment or internet delivery channels has changed the performance of many organizations such as banks by lowering overhead expenses, specifically IT, marketing, and staff that often translate to more profitability for the firms. Hernando and Nieto (2006) claim that using the internet complements physical banking activities, significantly reducing overhead expenses. These authors emphasise that profitability from online or e-payments are often linked to cut overhead costs. According to Hernando and Nieto (2006), this impact is slow but becomes significant after eighteen months of adopting the technology. After more than two years of adopting e-payment technologies, these researchers claim that this impact becomes very significant, and the profitability can easily be seen. After studying banks, Hernando and Nieto (2006) found statistically significant data about the efficiency gains in multichannel banks that occur due to reduced general expenses for every output unit.

In a study conducted by Cheruiyot (2010) on banks that offer internet banking services, this researcher found that these financial institutions are much larger and have much better profitability and operating efficiency ratios than their non-internet counterparts. The researcher found out that the internet using financial institutions depend majorly on deposits for financing. Cheruiyot (2010), however, found the relationship between internet banking and profitability to have an association significance, which is less than 5% and a negative association with different forms of risks, thereby highlighting that the internet-dependent banks are not exposed to risks like non-performing loans.

Yu, His, and Kuo (2002) say that electronic commerce and e-payment are top-rated services that emerged because of internet proliferation around the world and because of the technological advancements for creating mobile devices, as well as because of the increasing internet speed. These factors have provided customers all over the world to use mobile devices to carry out electronic transactions besides activities like Web browsing and e-mails (Tellez-Isaac and SHerali, 2014). According to Oyewole, Anna, and Pnuh (2013), the simplicity of doing business and exchanging money online and because of the speed and security of such transactions in accessing one’s capital resources are also some significant factors that have contributed to the increased use of e-payment systems. In support of the argument about e-payment becoming more popular, Singh et al. (2012) say that unlike conventional payment methods, which are quite expensive, e-payment involves an intangible transaction that is affecting almost all economies as, through it, money can be transferred at minimal costs.

Shilpa and Sharma (2012) argue that the increased use of the web in daily lives have made people to be accustomed to e-payment for purchasing or selling of ventures and products. Furthermore, the increase in the number of online-based business and companies have resulted in new finance-related necessities which cannot be met through the conventional payment approaches.

The World Payments Report (2014) indicate that annually, the cash that is transacted globally by mobile and online payment increased significantly at a rate of 8.6%. Additionally, the number of non-paper transactions globally increased to 8.9%. The report links this growth to the developing or newly emerging markets. In line with these highlights, Slozko and Pelo (2015) claim that e-payment systems are crucial mechanisms employed by firms and individuals as a much convenient and secure method of transacting. Kabir, Saidin, and Ahmi (2015) support this claim by stating that e-payment has become a significant facilitating engine in digital commerce and is the primary driver of successful electronic companies. These researchers say that e-payments have attained proficiency thanks to their ability to reduce the frequency of frauds and increase resourcefulness in the global payment system.

According to Oyewole, Abba, and El-maude (2013), globalisation in the contemporary world has led to more innovative technological projects and changed the landscape of payment, shifting the old world to a new electronic type of World. These researchers claim that e-payment has altered the standards of moving money positively, particularly in developing nations that were initially accustomed to carrying hard cash around. These authors argue that systems of e-payment has become a crucial factor in the current economy, where it is considered to be pertinent to the strength of budgets, monetary policy, and financial activity.

Newstead (2012) examined systems based on e-payment, as well as monetary development, and discovered a link between the speed of financial advancement or development and cashless payment. This researcher found that e-payment was developing twice as fast in developing nations as compared to the developed world. Similarly, the World Payment Reports (2012) studied the advancement and state of global e-payment systems. They found that these systems lead to speedier and less demanding for people and companies to buy enterprises and products, increasing profit and the GDP of a country. This claim is supported by Hasan et al. (2012), who studied the primary connection between overall financial developments and online payment for retail business across 27 European countries. The researchers found that e-payment empowered the businesses’ overall exchange, utilisation, and financial growth.

Zandi, Singh, and Irving (2013) say that besides convenience and safety, e-payment systems have numerous financial benefits. The researchers claim that the main financial benefit of e-payment is associated with mobilizing funds for investment, as well as guaranteeing a significant amount of cash accessible to the country and the company or the organisation and the people. Additionally, e-payment systems allow firms and people to tack their spending. The authors say that such data can be crucial to the administration in decision-making processes on how better to streamline the process of transaction among other critical areas. Additionally, Moody (2010) says that e-payment can eliminate costs linked to handling money and other expenses like printing. Zandi, Singh, and Irving (2013) indicate that a general annual GDP increase of 0.2% was experienced in the same year due to the introduction of cards. These researchers claim that basically, the use of cards increases the nation’s GDP by about 0.2% annually.

According to McGrath (2017), the payment sector globally is expanding rapidly, thanks to the emerging payment technologies. This author claims that the attention on innovation and technology has pushed many individuals and organisations around the world to indulge e-payment technologies resulting in improved bottom-line for organisations that also experience corporate growth. Moreover, this researcher argues that e-payment options are quicker and cheaper and reduce the dependence on hard cash. McGrath (2017) says that in 2016, the United Kingdom experienced an increase in the number of transactions done through e-payment systems by 212% as compared to 2015. This researcher says that this increase is linked to the fact that the retailers benefited from reduced cost acceptance by contactless payment and that because contactless payment modes improve the interaction between companies selling products and their customers. This increased customer-seller interaction improved customer experience, predictability, transparency, and payment speed.

Fiallos and Wu (2005), the proliferation of the internet or the web, has exponentially increased the rate of exchanges and electronic payment where customers can purchase merchandise through the internet in a secure manner. Cobb (2005) says that e-payment has many benefits besides its simple nature of operation and safety. This researcher says that these advantages contribute significantly to improving the financial status of a country. Electronic payment has helped develop financial institutions, increasing the accessibility of their reserve, thereby driving their financial achievement.

In a study conducted by Amazon (2005), this firm shows that the secure and advantageous e-payments results in large scale financial benefits. According to Amazon (2005), introducing e-payment adds efficiency in an organisation’s payment system by providing it with better control of business and customer credits. Additionally, Hord (2005) supports this claim by saying that e-payments results in reduced organisational expenses. As a result, companies using e-payment systems spend less money on postage and paper, even with an increased number of payments made through the system. The researcher says that e-payments helps organisations to preserve their clients because the possibility of a client returning to the e-commerce site where her or his information is already entered is high. Amazon (2005) claims that e-payment can help reduce the costs of transactions and stimulate increased consumption. As a result, e-payment improves financial transparency and intermediation, also improving a country’s GDP. Nonetheless, Amazon (2005) highlights that the government is a vital player in establishing an environment that is conducive to achieve the benefits.

According to Humphrey et al. (2001), the use of e-payment systems benefits buyers and vendors in many ways, for instance, by reducing costs and simplifying transaction processes, as well as improving security in the process. Humphrey et al. (2001) say that one benefit seen from e-payment systems is how they empower customers of financial institutions to deal with daily transactions without physically visiting the bank. Online payments also save dealers’ costs and time in processing transactions. These authors claim that the reshuffling and mechanism of e-payment led to self-service channels such as point-of-sale systems and ATMs, which reduced paper-based expenses and mistakes. Lastly, Humphrey et al. (2001) say that many people around the world believe that the payment sector shall grow in the coming years due to the new online systems of payment. However,