The technology acceptance model (TAM) is regarded as the most widely used theoretical framework for assessing the acceptance of technologies in the literature (Legris et al., 2003). The TAM was developed by Davis (1989); it posits that users' acceptance or adoption of technological innovations can be predicted by the users' views of the perceptions related to ease of use and usefulness of the system (Davis, 1989).

The perceived ease of use describes "the degree to which a person believes that using a particular system would be free of effort" (Davis, 1989, 320). Perceived usefulness describes the user's perceptions of the expected benefits derived from using a particular IS system (Davis, 1989). In this research, the dependent variable is intention to expand use. The constructs from the TAM, which were essentially technology-related factors, were integrated into the technology-organization-environment (TOE) framework. The TOE framework posits that the adoption of innovations depends on organizational, environmental as well as technological factors (Tornatzky & Fleischer, 1990). In general, the TOE model is an integrative schema that incorporates the characteristics of the technology, contingent organizational factors, and other elements from the macro-environment. Prior studies (e.g. Ifinedo, 2011a, b) that used the TOE framework to examine the antecedents of factors on e-business usage and acceptance in small firms elsewhere included such variables as top management support, organizational readiness, IS vendor support, government support, and financial resources availability.

#### **5. Hypotheses formulation**

This study' research framework highlighting factors identified as being pertinent to the intention to expand the use of e-business payment solutions among Nigerian small firms are presented in Figure 1. Previous studies (e.g. Al-Ghait et al., 2010; Gholami et al., 2010) indicated that the adoption and usage of online services and e-payment systems can be impacted by such factors as gender, age, education, organizational size, and revenues. To that end, these variables were incorporated into the research model to increase insight.

With regard to IS acceptance, Davis (1989) demonstrated that perceived ease of use and perceive usefulness have positive effects on use or adoption of an IS. Evidence from the

Facilitating the Intention to Expand E-business

of e-business in the region. Thus, it is predicted that:

payment systems use in Nigerian small firms

payment systems use in Nigerian small firms

predicted that:

systems use in Nigerian small firms

Payment Systems Use in Nigerian Small Firms: An Empirical Analysis 25

support and commitment generally boded well for the acceptance of technological innovations in small businesses (Iacovou et al., 1995; Premkumar & Roberts, 1999; Al-Qirim, 2007). This is because top managers act as change agents in the adoption process of technological innovations (Igbaria et al., 1997). When top managers understand the importance of technological innovations such as e-payment systems in their organizations, they tend to play a crucial role in influencing other organizational members to accept the use of such innovations. Chatterjee et al. (2002) found lack of top management support to be a hindrance to e-business adoption in organizations. In the context of SSA, Eze (2007) and Cloete et al. (2002) found support for the relevance of this factor in the successful adoption

H2a: Top management support positively influences the intention to expand e-business

Organizational readiness is defined by Iacovou et al. (1995, 467) as "the availability of the needed organizational resources for adoption." Organizational readiness of businesses is critically important for IS adoption and it encompasses not only physical assets, but also human knowledge of IS (Mehrtens et al., 2001; Zhu et al., 2003). Chircu and Kauffman (2000) revealed that lack of computer literacy among owners of small businesses and a lack of knowledge of the benefits of IS use is an inhibitor to IS adoption in small firms. In SSA, Saffu et al. (2007) indicated that e-business thrives better where operators of business have an

H2b: Organizational readiness positively influences the intention to expand e-business

In this study, IS vendor support refers to the support for implementing and using technological innovations that a business obtains from external sources of technical expertise (Attewell, 1992; Thong et al., 1996; Premkumar & Roberts, 1999). According to Attewell (1992), business organizations tend to postpone technology adoption due to lack of expertise and knowledge. Importantly, the availability of external IS support can help businesses to bridge knowledge gaps related to IS innovation acquisition. I argue that small firms in Nigeria that have access to needed external sources of expertise related to the use of epayment systems will be better served in their quests to expand their use of such innovations compared to counterparts lacking such assistance. It is worth noting that low levels of ICT skills is among the major barriers of e-business expansion in SSA (Ifinedo, 2005a, b; 2008); thus, the availability of IS vendor support can mitigate this shortcoming. Researchers elsewhere have found this factor to be an important factor in the adoption and usage of e-business and related technologies (Doolin et al., 2003; Scupola, 2003). Thus, it is

H3a: IS vendor support positively influences the intention to expand e-business payment

Here, government support refers to the assistance provided by the authority to encourage the spread of IS innovations such as e-business payment systems in its context. Some studies suggested that government support is required for the spread of technological innovations such as e-business within a country (Teo et al., 1997; Chau & Jim, 2002) while others (e.g. Ifinedo, 2011a) did not find support such a relationship. The government in Nigeria through the CBN has realized the pertinence of e-payment solutions in the country's economic

understanding of e-business concepts in their setups. Thus, it is predicted that:

Fig. 1. The research model

extant literature has supported the importance of the TAM's constructs in determining IS use (Legris et al., 2003). Lee (2009) showed that perceived usefulness and perceived ease of use have positive impacts on the adoption of internet banking with the variable of attitude toward use serving as a mediator. Others including Reid and Levy (2008) and Ayo et al. (2011) found that perceived usefulness and perceived ease of use influence customers' acceptance of e-banking, which is a larger concept that includes EPS. Ramaya et al. (2005) found both perceived usefulness and perceived ease of use to be significant determinants of intention to use an online bill payment system for graduate students. Ozkan's (2010) study of the factors facilitating the adoption of e-payment systems indicated that perceived advantage (perceived usefulness, in this instance) was a significant variable in the relationship. Thus, it is predicted that:

H1a: Perceived usefulness positively influences the intention to expand e-business payment systems use in Nigerian small firms

H1b: Perceived ease of use positively influences the intention to expand e-business payment systems use in Nigerian small firms

Thong et al. (1996, p253) describe top management support as the "active engagement of top management with IS implementation." Prior research has shown that top management

extant literature has supported the importance of the TAM's constructs in determining IS use (Legris et al., 2003). Lee (2009) showed that perceived usefulness and perceived ease of use have positive impacts on the adoption of internet banking with the variable of attitude toward use serving as a mediator. Others including Reid and Levy (2008) and Ayo et al. (2011) found that perceived usefulness and perceived ease of use influence customers' acceptance of e-banking, which is a larger concept that includes EPS. Ramaya et al. (2005) found both perceived usefulness and perceived ease of use to be significant determinants of intention to use an online bill payment system for graduate students. Ozkan's (2010) study of the factors facilitating the adoption of e-payment systems indicated that perceived advantage (perceived usefulness, in this instance) was a significant variable in the

H1a: Perceived usefulness positively influences the intention to expand e-business payment

H1b: Perceived ease of use positively influences the intention to expand e-business payment

Thong et al. (1996, p253) describe top management support as the "active engagement of top management with IS implementation." Prior research has shown that top management

Fig. 1. The research model

relationship. Thus, it is predicted that:

systems use in Nigerian small firms

systems use in Nigerian small firms

support and commitment generally boded well for the acceptance of technological innovations in small businesses (Iacovou et al., 1995; Premkumar & Roberts, 1999; Al-Qirim, 2007). This is because top managers act as change agents in the adoption process of technological innovations (Igbaria et al., 1997). When top managers understand the importance of technological innovations such as e-payment systems in their organizations, they tend to play a crucial role in influencing other organizational members to accept the use of such innovations. Chatterjee et al. (2002) found lack of top management support to be a hindrance to e-business adoption in organizations. In the context of SSA, Eze (2007) and Cloete et al. (2002) found support for the relevance of this factor in the successful adoption of e-business in the region. Thus, it is predicted that:

H2a: Top management support positively influences the intention to expand e-business payment systems use in Nigerian small firms

Organizational readiness is defined by Iacovou et al. (1995, 467) as "the availability of the needed organizational resources for adoption." Organizational readiness of businesses is critically important for IS adoption and it encompasses not only physical assets, but also human knowledge of IS (Mehrtens et al., 2001; Zhu et al., 2003). Chircu and Kauffman (2000) revealed that lack of computer literacy among owners of small businesses and a lack of knowledge of the benefits of IS use is an inhibitor to IS adoption in small firms. In SSA, Saffu et al. (2007) indicated that e-business thrives better where operators of business have an understanding of e-business concepts in their setups. Thus, it is predicted that:

H2b: Organizational readiness positively influences the intention to expand e-business payment systems use in Nigerian small firms

In this study, IS vendor support refers to the support for implementing and using technological innovations that a business obtains from external sources of technical expertise (Attewell, 1992; Thong et al., 1996; Premkumar & Roberts, 1999). According to Attewell (1992), business organizations tend to postpone technology adoption due to lack of expertise and knowledge. Importantly, the availability of external IS support can help businesses to bridge knowledge gaps related to IS innovation acquisition. I argue that small firms in Nigeria that have access to needed external sources of expertise related to the use of epayment systems will be better served in their quests to expand their use of such innovations compared to counterparts lacking such assistance. It is worth noting that low levels of ICT skills is among the major barriers of e-business expansion in SSA (Ifinedo, 2005a, b; 2008); thus, the availability of IS vendor support can mitigate this shortcoming. Researchers elsewhere have found this factor to be an important factor in the adoption and usage of e-business and related technologies (Doolin et al., 2003; Scupola, 2003). Thus, it is predicted that:

H3a: IS vendor support positively influences the intention to expand e-business payment systems use in Nigerian small firms

Here, government support refers to the assistance provided by the authority to encourage the spread of IS innovations such as e-business payment systems in its context. Some studies suggested that government support is required for the spread of technological innovations such as e-business within a country (Teo et al., 1997; Chau & Jim, 2002) while others (e.g. Ifinedo, 2011a) did not find support such a relationship. The government in Nigeria through the CBN has realized the pertinence of e-payment solutions in the country's economic

Facilitating the Intention to Expand E-business

Construct Items Mean SD Factor

 PUSS1 4.60 1.39 0.771 PUSS2 4.30 1.69 0.837

PUSS4 4.30 1.67 0.840

 PEOU1 4.35 1.45 0.776 PEOU1 4.44 1.28 0.771

PEOU1 4.42 1.39 0.861

MGT1 4.63 1.43 0.867

 MGT3 4.52 1.47 0.884 MGT4 4.30 1.60 0.767

ORG2 4.82 1.21 0.815

PUSS3 4.11 1.76 0.771 0.874

PEOU1 4.46 1.23 0.836 0.884

MGT2 4.61 1.46 0.826 0.903

PUSS5 2.95 2.37 0.579

the results.

(Nunnally, 1978).

Perceived

Perceived ease

Top

management support

Organizational

Payment Systems Use in Nigerian Small Firms: An Empirical Analysis 27

confidential. The participants were also motivated with a promise of receiving a summary of

The majority of the measures used in the study were taken from previously validated sources (Davis, 1989; Iacovou et al., 1995; Igbaria et al. 1997; Thong et al., 1996; Premkumar & Roberts, 1999; Ifinedo, 20011a, b). Please see the Appendix for a list of the measures used in the study. The measurement items were anchored on a 7-point Likert scale ranging from "strongly disagree" (1) to "strongly agree" (7) in which participants were asked to indicate an appropriate response. Table 1 highlights the construct's sources and their descriptive statistics. The composite reliability scores for each factor exceeded the recommended 0.7 threshold to indicate a reasonably high reliability of the research measures and constructs

loading

usefulness Davis (1989)

of use Davis (1989)

readiness ORG1 4.80 1.18 0.807 Iacovou et al.

Composite

reliability Sources

Thong et al. (1996) ; Igbaria et

al. (1997)

(1995)

growth. To that end, when concerted efforts are directed toward promoting such innovations among small firms in the country, it is to be expected that the use of such systems will be positively encouraged in the country. Thus, it is predicted that:

H3b: Government support positively influences the intention to expand e-business payment systems use in Nigerian small firms

The apparent lack or financial resources in small firms and their resistance to invest in complex IS have been reported as major barriers in some studies (Tuunainen, 1998; Chapman et al., 2000; Love et al., 2001). Research has also shown that small firms do encounter difficulties with respect to obtaining finance, and this unfavorable situation often set back their efforts to adopt needed IS innovations (Tuunainen, 1998; Chapman et al., 2000; Love et al., 2001). Tan and Wu (2003) and Pearson and Grandon (2004) showed that financial matters are vitally important to owners and managers and such issues often influence the adoption of IS in small businesses. However, others (e.g. Dongen et al., 2002; Simpson & Doherty, 2004) found that a lack of financial resources was not a sufficient factor to set back e-business adoption in small firms. Perhaps due to economic reality, Nigerian small firms lack required financial resources to enable them procure and adopt useful and relevant business tools (Ifinedo, 2005b; 2008). To that end, where such resources exist, it is to be expected that the intention to expand the use of e-payment solution will be relatively higher. Thus, it is predicted that:

H3c. Financial resources support positively influences the intention to expand e-business payment systems use in Nigerian small firms

#### **6. Research methodology**

#### **Data collection**

This work is a part of a major research conducted by the researcher and his associates in Nigeria. This study's data was collected in Lagos and environs; the city is the largest commercial city in Nigeria (and in SSA) (Eze, 2007). I believe that the search of small firms with knowledge of e-business payments will be easier in such a place. The targeted population comes from the list of business contacts held by a local university in the city. This approach is akin to judgmental sampling (Iacobucci & Churchill, 2009) because the researcher selects respondents based on his/her knowledge of the suitability of the participants. Other prior studies in Nigeria have used a similar method for data collection (Anandarajan et al., 2002; Ayo et al., 2008, Ifinedo, 2008). The identified participants, who were mainly middle-level managers, came from a wide range of industries. As the unit of analysis of this study was at the level of the organization, the inclusion of such organizational informants would ensure that useful insights are provided.

To ensure content validity, six (6) knowledgeable individuals, including business managers and IS faculty members participated in a pilot test with an initial draft of the questionnaire. The comments and suggestions received from these individuals helped to improve the quality of the final questionnaire. The research effort identified 300 possible respondents from the contacts list and each received a copy of the questionnaire in person. Each package contained a cover letter explaining the purpose of the study. Participation in the study was voluntary. Respondents were assured that their individual responses would be treated as

growth. To that end, when concerted efforts are directed toward promoting such innovations among small firms in the country, it is to be expected that the use of such

H3b: Government support positively influences the intention to expand e-business payment

The apparent lack or financial resources in small firms and their resistance to invest in complex IS have been reported as major barriers in some studies (Tuunainen, 1998; Chapman et al., 2000; Love et al., 2001). Research has also shown that small firms do encounter difficulties with respect to obtaining finance, and this unfavorable situation often set back their efforts to adopt needed IS innovations (Tuunainen, 1998; Chapman et al., 2000; Love et al., 2001). Tan and Wu (2003) and Pearson and Grandon (2004) showed that financial matters are vitally important to owners and managers and such issues often influence the adoption of IS in small businesses. However, others (e.g. Dongen et al., 2002; Simpson & Doherty, 2004) found that a lack of financial resources was not a sufficient factor to set back e-business adoption in small firms. Perhaps due to economic reality, Nigerian small firms lack required financial resources to enable them procure and adopt useful and relevant business tools (Ifinedo, 2005b; 2008). To that end, where such resources exist, it is to be expected that the intention to expand the use of e-payment solution will be relatively higher.

H3c. Financial resources support positively influences the intention to expand e-business

This work is a part of a major research conducted by the researcher and his associates in Nigeria. This study's data was collected in Lagos and environs; the city is the largest commercial city in Nigeria (and in SSA) (Eze, 2007). I believe that the search of small firms with knowledge of e-business payments will be easier in such a place. The targeted population comes from the list of business contacts held by a local university in the city. This approach is akin to judgmental sampling (Iacobucci & Churchill, 2009) because the researcher selects respondents based on his/her knowledge of the suitability of the participants. Other prior studies in Nigeria have used a similar method for data collection (Anandarajan et al., 2002; Ayo et al., 2008, Ifinedo, 2008). The identified participants, who were mainly middle-level managers, came from a wide range of industries. As the unit of analysis of this study was at the level of the organization, the inclusion of such

To ensure content validity, six (6) knowledgeable individuals, including business managers and IS faculty members participated in a pilot test with an initial draft of the questionnaire. The comments and suggestions received from these individuals helped to improve the quality of the final questionnaire. The research effort identified 300 possible respondents from the contacts list and each received a copy of the questionnaire in person. Each package contained a cover letter explaining the purpose of the study. Participation in the study was voluntary. Respondents were assured that their individual responses would be treated as

organizational informants would ensure that useful insights are provided.

systems will be positively encouraged in the country. Thus, it is predicted that:

systems use in Nigerian small firms

Thus, it is predicted that:

**Data collection**

**6. Research methodology**

payment systems use in Nigerian small firms

confidential. The participants were also motivated with a promise of receiving a summary of the results.

The majority of the measures used in the study were taken from previously validated sources (Davis, 1989; Iacovou et al., 1995; Igbaria et al. 1997; Thong et al., 1996; Premkumar & Roberts, 1999; Ifinedo, 20011a, b). Please see the Appendix for a list of the measures used in the study. The measurement items were anchored on a 7-point Likert scale ranging from "strongly disagree" (1) to "strongly agree" (7) in which participants were asked to indicate an appropriate response. Table 1 highlights the construct's sources and their descriptive statistics. The composite reliability scores for each factor exceeded the recommended 0.7 threshold to indicate a reasonably high reliability of the research measures and constructs (Nunnally, 1978).

Facilitating the Intention to Expand E-business

in their organizational business transactions.

businesses are highlighted in Table 3.

*Gender*

*Age*

*Education*

*Job title*

Engineer

Technician) Missing

Assistant/Office Executive Other (e.g. Surveyor, Lab

Table 2. The profile of the respondents

Payment Systems Use in Nigerian Small Firms: An Empirical Analysis 29

machines (ATMs), electronic cash (E-cash), and electronic funds transfer (EFT), respectively

Table 2 summarizes the profile of respondents. The participants' average work experience was 3.94 years (s.d. = 1.22). The respondents included 64% middle-level managers and 26% top managers. Seventy-two percent (74%) of the sample had at least a university degree. The average age of the respondents was 32.3 years. The employees in the sampled firms ranged from 1 to 500 employees with a median of 6 employees. The other profiles of the responding

Profile Frequency Percentage (%)

Male 94 70.1 Female 40 29.9

Less than 20 years 2 1.5 21-30 37 27.6 31-40 67 50.0 41-50 23 17.2 51-60 5 3.7

Primary education 1 0.7 Secondary education 4 3.0 College/Bachelor's education 74 55.2 Post-graduate degree 53 39.6 Other 2 1.5

CEO 9 6.7 Director (e.g. Operations, Sales) 11 8.2 Manager (Admin, IT, Project, etc.) 74 55.2

to indicate that common method variance is not a problem for the data.

The problem of common method bias exists for studies that used single informants such as this one. I followed the procedural remedies for controlling common method biases. First, to increase the study's validity, I used clear and concise questions in the questionnaire. Second, to reduce apprehension, I assured the respondents that their data will be treated with anonymity. Third, I used a statistical procedure i.e. the Harmon one-factor test (Podsakoff et al., 2003) to assess if such biases were a problem in the collected data. The test results showed that several factors with eigenvalues greater than one are present in the collected data. Accordingly, the most covariance explained by one factor in the data is 26.5%

6 13.4 9 1.5

SD = Standard deviations

Table 1. The constructs' descriptive statistics and their reliability values

#### **7. Survey results**

One hundred and fifty six (156) responses were received from the administered 300 questionnaires, which gives an effective response rate of 52% for this study. However, 22 responses were not considered valid for this research; these included responses from the public sector, those with a high percentage of missing entries, and those indicating nonadoption of any e-payment solutions in their business operations. The data showed that 64%, 75%, 43%, and 40% of the respondents indicated using credit cards, automated teller

support Ifinedo (2011a)

support Ifinedo (2011a)

FINS1 3.57 1.79 0.837 0.839

e-payment Davis (1989)

One hundred and fifty six (156) responses were received from the administered 300 questionnaires, which gives an effective response rate of 52% for this study. However, 22 responses were not considered valid for this research; these included responses from the public sector, those with a high percentage of missing entries, and those indicating nonadoption of any e-payment solutions in their business operations. The data showed that 64%, 75%, 43%, and 40% of the respondents indicated using credit cards, automated teller

FINS2 3.66 1.81 0.863

INT2 5.56 2.24 0.935 0.974

Table 1. The constructs' descriptive statistics and their reliability values

Premkumar & Roberts (1999)

GOVT3 3.34 1.72 0.910 0.892

ORG3 4.46 1.53 0.743 0.870

GOVT1 3.57 1.91 0.676 GOVT2 3.34 1.92 0.796

GOVT4 3.42 1.89 0.770

ISV2 3.47 1.71 0.856 0.918

ORG4 4.55 1.52 0.694

support ISV1 3.94 1.66 0.865

ISV3 4.02 1.38 0.942

INT1 5.60 2.25 0.958

 INT3 5.61 2.26 0.951 INT4 5.81 1.93 0.956

Government

IS vendor

Financial resources

Intention to use

SD = Standard deviations

**7. Survey results**

machines (ATMs), electronic cash (E-cash), and electronic funds transfer (EFT), respectively in their organizational business transactions.

Table 2 summarizes the profile of respondents. The participants' average work experience was 3.94 years (s.d. = 1.22). The respondents included 64% middle-level managers and 26% top managers. Seventy-two percent (74%) of the sample had at least a university degree. The average age of the respondents was 32.3 years. The employees in the sampled firms ranged from 1 to 500 employees with a median of 6 employees. The other profiles of the responding businesses are highlighted in Table 3.

Table 2. The profile of the respondents

The problem of common method bias exists for studies that used single informants such as this one. I followed the procedural remedies for controlling common method biases. First, to increase the study's validity, I used clear and concise questions in the questionnaire. Second, to reduce apprehension, I assured the respondents that their data will be treated with anonymity. Third, I used a statistical procedure i.e. the Harmon one-factor test (Podsakoff et al., 2003) to assess if such biases were a problem in the collected data. The test results showed that several factors with eigenvalues greater than one are present in the collected data. Accordingly, the most covariance explained by one factor in the data is 26.5% to indicate that common method variance is not a problem for the data.

Facilitating the Intention to Expand E-business

**9. The measurement model**

usefulness 0.59 **0.768**

use 0.66 0.514 **0.812**

elements are correlations among constructs

results for the βs and the R2 are shown in Figure 2.

support 0.70 0.656 0.513 **0.837**

readiness 0.63 0.567 0.392 0.598 **0.793**

support 0.67 0.521 0.454 0.353 0.367 **0.819**

Table 4. Inter-construct correlations, AVE, and the square root of AVE

6: IS vendor support 0.79 0.356 0.650 0.346 0.416 0.514 **0.889**

support 0.72 0.289 0.486 0.377 0.352 0.521 0.650 **0.849**

use 0.90 0.288 0.173 0.317 0.298 0.200 0.292 0.197 **0.949**  Note: a) The bold fonts in the leading diagonals are the square root of AVEs, b) off-diagonal

The structural model in PLS presents information related to the path coefficients (β) and the squared R (R2). The strength of the relationship is indicated by the β and the R2 shows the percentage of variance in the model to give an indication of its predictive power. The path significance levels (t-values) are estimated by the bootstrapping method. The SmartPLS 2.0

Four out of the seven hypotheses were supported; hypothesis (H1a) was confirmed to show that perceived usefulness of e-business payment systems positively influences the intention

1:Perceived

2:Perceived ease of

3:Top management

4:Organizational

7:Financial resources

8:Intention to expand e-payment system

**10. The structural model**

5:Government

Payment Systems Use in Nigerian Small Firms: An Empirical Analysis 31

The measurement model assesses the reliability, convergent, and discriminant validities of the data. The internal consistency of the data measures is assured when the reliability of each measure in a scale is above 0.7 (Nunnally, 1978). Composite reality scores of 0.7 and above is also considered adequate to assure reliability (Nunnally, 1978; Hair et al., 1998). The convergent validity of the data is assured when each item has an item loading that is greater than 0.5 on its associated construct. Fornell and Larcker (1981) recommend that the following conditions be met for adequate discriminant validity to be assured: a) the square root of the average variance extracted (AVE) of all constructs should be larger than all other cross-correlations; b) the value of the AVE should be of the threshold value 0.50. Table 4 shows that the AVE ranged from 0.59 to 0.90, and in no case was any correlation between the constructs greater than the squared root of AVE (the principal diagonal element). Thus, the measurement items used for this study demonstrate good psychometric properties.

AVE 1 2 3 4 5 6 7 8

Note: The exchange rate of the naira per US dollar is 150.48 in year 2009. Table3. Profile of the participating businesses

In testing for nonresponse bias, I divided the collected data into two parts i.e. early and late respondents. The mean values of selected items for early and late respondents in a survey were then compared (Iacobucci & Churchill, 2009). Chi-square (χ2) test was used to compare the sampled firm size, annual revenue, and industry type. The results of the Chi-square tests (significant at p < 0.05) showed there were no significant differences in the chosen characteristics.

#### **8. Data analysis**

I used the Partial Least Squares (PLS) technique for data analysis. The PLS approach is suitable for validating predictive models (Chin, 1998), and the approach permits information about the measurement and structural models to be presented. The specific tool used in this study was SmartPLS 2.0 that was developed by Ringle et al. (2005).

#### **9. The measurement model**

30 E-Business – Applications and Global Acceptance

23

17.2

Profile Frequency Percentage (%)

Adverting, Marketing, Sales 10 7.5 Manufacturing 18 13.4 Retail, Wholesale 19 14.2 Financial services 35 26.1 Pharmaceutical/Chemical 6 4.5

Oil and Gas Services 8 6.0 Hospitality 6 4.5 Other (e.g. Aviation, Surveying) 7 5.2 Missing data 2 1.5

Less 500,000 naira 3 2.2 500,001 - 1.0 million naira 9 6.7 1.1 - 5.0 million naira 7 5.2 5.1 - 10.0 million naira 8 6.0 10.1 - 20.0 million naira 15 11.2 20.1 - 50.0 million naira 81 60.4 Missing data 11 8.2

1-25 employees 27 20.1 26-50 employees 12 9.0 51 - 75employees 6 4.5 76 -100 employees 8 6.0 Above 100 employees 78 58.2 Missing data 3 2.2

In testing for nonresponse bias, I divided the collected data into two parts i.e. early and late respondents. The mean values of selected items for early and late respondents in a survey were then compared (Iacobucci & Churchill, 2009). Chi-square (χ2) test was used to compare the sampled firm size, annual revenue, and industry type. The results of the Chi-square tests (significant at p < 0.05) showed there were no significant differences in the chosen

I used the Partial Least Squares (PLS) technique for data analysis. The PLS approach is suitable for validating predictive models (Chin, 1998), and the approach permits information about the measurement and structural models to be presented. The specific tool

used in this study was SmartPLS 2.0 that was developed by Ringle et al. (2005).

Note: The exchange rate of the naira per US dollar is 150.48 in year 2009.

Table3. Profile of the participating businesses

*Business type*

Information Technology (IT) and

Telecoms

*Workforce*

characteristics.

**8. Data analysis**

*Annual sales revenues*

The measurement model assesses the reliability, convergent, and discriminant validities of the data. The internal consistency of the data measures is assured when the reliability of each measure in a scale is above 0.7 (Nunnally, 1978). Composite reality scores of 0.7 and above is also considered adequate to assure reliability (Nunnally, 1978; Hair et al., 1998). The convergent validity of the data is assured when each item has an item loading that is greater than 0.5 on its associated construct. Fornell and Larcker (1981) recommend that the following conditions be met for adequate discriminant validity to be assured: a) the square root of the average variance extracted (AVE) of all constructs should be larger than all other cross-correlations; b) the value of the AVE should be of the threshold value 0.50. Table 4 shows that the AVE ranged from 0.59 to 0.90, and in no case was any correlation between the constructs greater than the squared root of AVE (the principal diagonal element). Thus, the measurement items used for this study demonstrate good psychometric properties.

Note: a) The bold fonts in the leading diagonals are the square root of AVEs, b) off-diagonal elements are correlations among constructs

Table 4. Inter-construct correlations, AVE, and the square root of AVE

#### **10. The structural model**

The structural model in PLS presents information related to the path coefficients (β) and the squared R (R2). The strength of the relationship is indicated by the β and the R2 shows the percentage of variance in the model to give an indication of its predictive power. The path significance levels (t-values) are estimated by the bootstrapping method. The SmartPLS 2.0 results for the βs and the R2 are shown in Figure 2.

Four out of the seven hypotheses were supported; hypothesis (H1a) was confirmed to show that perceived usefulness of e-business payment systems positively influences the intention

Facilitating the Intention to Expand E-business

Nigeria may be finding the use of such systems to be complex.

**11. Discussions**

scope or lack adequate validity.

**12. Implication for research and practice**

Payment Systems Use in Nigerian Small Firms: An Empirical Analysis 33

The findings of this research confirmed a number of factors that positively influence the intention to expand e-business payment systems use in Nigerian small firms. The hypotheses formulated to determine the importance of perceived usefulness, top management support, organizational readiness, and IS vendor support in the research model were all confirmed, the other factors were not supported by the collected data. While perceived usefulness was found to be an important factor for the firms sampled in this study, perceived ease of use did not have any meaningful influence on small firm's intention to expand e-business payment systems use. The finding with respect to the variable of perceived usefulness is consistent with the results of other studies (e.g. Ramaya et al. 2005; Ozkan, 2010; Ayo et al., 2011). It is surprising to notice that perceived ease of use is not a significant factor in the research model. This result might be suggesting that small firms in

Consistent with past studies (e.g. Thong et al., 1996; Ozkan, 2010; Ifinedo, 2011a), both top management support and organizational readiness were found to have positive influences on the intention to expand e-business payment systems use in Nigerian small firms. These results indicated that small firms in Nigeria that have higher levels of top management support and the required organizational readiness in their setups are more inclined to expand their use intentions of e-business payment solutions. The results of this study confirmed that the availability of IS vendor support augured well for intention to expand the use of e-payment in Nigerian small firms; this positive relationship is consistent with the results of similar prior research (Thong et al., 1996; Premkumar & Roberts, 1999; Ifinedo, 2011a). The variables of government support and financial resource support did not positively influence the intention to expand e-business payment systems use in Nigerian small firms. Two plausible reasons are offered for the lack of support these foregoing hypotheses: a) the result might have been impacted by extraneous factors i.e. the respondents may believe that government agencies and financial organizations in Nigeria are not providing needed assistance to small firms wishing to adopt such innovations, b) it is also possible that measuring items used to operationalize these items may be limited in

This research has implications for future study. First, the use of the TOE framework in this current study has engendered deeper insight at the micro level regarding possible factors that positively influence the intention to expand e-business payment systems use in Nigerian small firms. This chapter expanded the body of knowledge in the area with its perspectives and insights; others may be enticed to continue research in the area. Second, the dependent variable, i.e. intention to expand e-business payment systems use that was used departs from prior research efforts that tend to operationalize such constructs with a single item of Use (Usage) or Intention to use. The utilization of such singular items may obfuscate reality and has, in fact, been criticized for limiting insight (Legris et al., 2003). Third, this research generally affirms findings and observations regarding the factors influencing the adoption of e-business in small organizations both in SSA and elsewhere. It also underscores factors or issues that may have little or no relevance to such discourse.

to expand e-business payment systems use in Nigerian small firms. Hypothesis (H1b) was unsupported by the data. Hypothesis (H2a) was supported to affirm the view that top management support is crucially important in facilitating the intention to expand the use of e-business payment systems in Nigerian small firms. The data did not provide support for hypothesis (H2b). The result also demonstrated significant, statistical support for hypothesis (H3a) which predicted that IS vendor support would positively influence the intention to expand e-business payment systems use in Nigerian small firms.

Contrary to the hypotheses formulated in H3b and H3c, government support and financial resources support did not positively influence the intention to expand e-business payment systems use in Nigerian small firms. It is worth noting that the nature of the relationships appeared to be negative. None of the control variables used in this study had any significant impact of the dependent variable to assure me that such factors had little impact in my research conceptualization. Together, all the variables explained 21% of the variance in the dependent construct. The foregoing information suggests that the proposed research conceptualization possess adequate predictive power to permit an understanding with regard to the intention to expand e-business payment systems use in Nigerian small firms. Further discussion on the results is presented in the next section.

\* Denotes significance at the p < 0.05 level, ‡ = Not significant Fig. 2. The SmartPLS results for the research model

#### **11. Discussions**

32 E-Business – Applications and Global Acceptance

to expand e-business payment systems use in Nigerian small firms. Hypothesis (H1b) was unsupported by the data. Hypothesis (H2a) was supported to affirm the view that top management support is crucially important in facilitating the intention to expand the use of e-business payment systems in Nigerian small firms. The data did not provide support for hypothesis (H2b). The result also demonstrated significant, statistical support for hypothesis (H3a) which predicted that IS vendor support would positively influence the intention to

Contrary to the hypotheses formulated in H3b and H3c, government support and financial resources support did not positively influence the intention to expand e-business payment systems use in Nigerian small firms. It is worth noting that the nature of the relationships appeared to be negative. None of the control variables used in this study had any significant impact of the dependent variable to assure me that such factors had little impact in my research conceptualization. Together, all the variables explained 21% of the variance in the dependent construct. The foregoing information suggests that the proposed research conceptualization possess adequate predictive power to permit an understanding with regard to the intention to expand e-business payment systems use in Nigerian small firms.

expand e-business payment systems use in Nigerian small firms.

Further discussion on the results is presented in the next section.

\* Denotes significance at the p < 0.05 level, ‡ = Not significant

Fig. 2. The SmartPLS results for the research model

The findings of this research confirmed a number of factors that positively influence the intention to expand e-business payment systems use in Nigerian small firms. The hypotheses formulated to determine the importance of perceived usefulness, top management support, organizational readiness, and IS vendor support in the research model were all confirmed, the other factors were not supported by the collected data. While perceived usefulness was found to be an important factor for the firms sampled in this study, perceived ease of use did not have any meaningful influence on small firm's intention to expand e-business payment systems use. The finding with respect to the variable of perceived usefulness is consistent with the results of other studies (e.g. Ramaya et al. 2005; Ozkan, 2010; Ayo et al., 2011). It is surprising to notice that perceived ease of use is not a significant factor in the research model. This result might be suggesting that small firms in Nigeria may be finding the use of such systems to be complex.

Consistent with past studies (e.g. Thong et al., 1996; Ozkan, 2010; Ifinedo, 2011a), both top management support and organizational readiness were found to have positive influences on the intention to expand e-business payment systems use in Nigerian small firms. These results indicated that small firms in Nigeria that have higher levels of top management support and the required organizational readiness in their setups are more inclined to expand their use intentions of e-business payment solutions. The results of this study confirmed that the availability of IS vendor support augured well for intention to expand the use of e-payment in Nigerian small firms; this positive relationship is consistent with the results of similar prior research (Thong et al., 1996; Premkumar & Roberts, 1999; Ifinedo, 2011a). The variables of government support and financial resource support did not positively influence the intention to expand e-business payment systems use in Nigerian small firms. Two plausible reasons are offered for the lack of support these foregoing hypotheses: a) the result might have been impacted by extraneous factors i.e. the respondents may believe that government agencies and financial organizations in Nigeria are not providing needed assistance to small firms wishing to adopt such innovations, b) it is also possible that measuring items used to operationalize these items may be limited in scope or lack adequate validity.

#### **12. Implication for research and practice**

This research has implications for future study. First, the use of the TOE framework in this current study has engendered deeper insight at the micro level regarding possible factors that positively influence the intention to expand e-business payment systems use in Nigerian small firms. This chapter expanded the body of knowledge in the area with its perspectives and insights; others may be enticed to continue research in the area. Second, the dependent variable, i.e. intention to expand e-business payment systems use that was used departs from prior research efforts that tend to operationalize such constructs with a single item of Use (Usage) or Intention to use. The utilization of such singular items may obfuscate reality and has, in fact, been criticized for limiting insight (Legris et al., 2003). Third, this research generally affirms findings and observations regarding the factors influencing the adoption of e-business in small organizations both in SSA and elsewhere. It also underscores factors or issues that may have little or no relevance to such discourse.

Facilitating the Intention to Expand E-business

diffusion in developing countries such as Nigeria.

**15. Appendix: The measurement items and scales**

**14. Conclusion**

**Perceived Usefulness**

**Perceived ease of use**

**Top management support**

**Organizational readiness**

business

Payment Systems Use in Nigerian Small Firms: An Empirical Analysis 35

systems use intentions in the country (and region). Knowledge from such efforts stands to consolidate theories related to the acceptance of e-business payment systems use in SSA.

This chapter focused on the factors positively influencing the intention to expand the use ebusiness payment systems in Nigerian firms. A research model fusing the TAM into the TOE was used to guide the discourse. Factors including perceived usefulness, perceived ease of use, organizational readiness, top management support, IS vendor support, and government support were considered in this study. This current study's findings lend credence to results obtained elsewhere and it provides support for the relevance of the TAM and TOE as useful models for examining the use intentions of technological innovations. Perceived usefulness, organizational readiness, top management support, and IS vendor support were all found to positively influence the intention to expand the use of e-business payment systems in Nigerian firms. Accordingly, more progress can be sustained and assured when adequate attention is accorded the foregoing significant factors vis-à-vis facilitating an increase in the use behaviors of e-payment systems in Nigerian small firms. The relevant literature and practitioners stand to benefit from the information provided in this study, and it is hoped that future research will build upon the findings reported herein as efforts are made to understand technology

• Using e-payment solutions would make work easier for our employees and managers • Using e-payment solutions would increase employees' and managers' productivity • Using e-payment solutions would increase the performance of our employees. • Our employees and managers would find e-payment solutions useful in their jobs • Using e-payment solutions would provide information for strategic decisions

• The use of e-payment solutions would be clear and understandable for us • Learning to use e-payment solutions would be easy for our employees • Overall, e-payment solutions would be easy to use in our organization • It would be easy to become skilful at using e-payment solutions in our firm

• Management is interested in the use of e-payment solutions in our operations • Management is supportive of the use of e-payment solutions in our operations • Our business has a clear vision regarding the use of e-payment solutions

• Management clearly communicates the need for e-payment solutions usage in the firm

• Our firm knows how information technology (IT) can be used to support our operations • Our firm has a good understanding of how e-payment solutions can be used in our

The attention being paid to issues in a developing part of the world i.e. Nigeria in the SSA could positively serve theory consolidation and development, which goes to enrich the literature. As well, policy makers, industry leaders, and business executives wishing to understand some of the reasons why the use of e-payment has been sluggish in Nigeria may benefit from the information provided in this study. Given that the respondents from small firms in Nigeria indicated that the perceived usefulness of e-payment, their organizational readiness, top management and IS vendor support can positively influence their intention to increase their use of e-business payment solutions, I recommends that such factors should be continually monitored when decision related to the continued use of such systems are being proposed in adopting firms. Similarly, more concerted efforts need to be undertaken to sensitize business owners and their employees or increase awareness of such innovations. The need for e-business payment systems coaching and training is deserving of attention (Simpson & Doherty, 2004).

In light of the fact that government support was not found to positively influence the intention to expand e-business payment systems use in Nigerian firms, it is reasonable to suggest that by increasing assistance in this area, many more small firms in the country may be encouraged to increase their use of such e-payment technologies. To that end, relevant government agencies and other local sources of expertise in Nigeria can be marshaled towards providing needed awareness and coaching programs aimed at encouraging positive outcomes in e-payment use in small firms in the country. With such sorts support on board, it is to be expected that more and more small firms in Nigeria will see they need to expand their use of such e-payment platforms. Small loans from local financial houses should be actively promoted to enable small firms needing such to procure needed epayment infrastructure.

#### **13. Limitations and avenues for future research**

This exploratory research has its share of limitations. First, despite the fact that common method bias was not seen to pose a problem for this study's data, it is still possible that respondents may be subject to a halo effect. I accept that asking only one respondent to present a view on behalf of their organization may be problematic. Second, the results from this endeavor should not be generalized for the whole of Nigeria as only a small part of the country was included in this study. Data from other parts of the country may be different from what is reported and discussed herein. Third, the research included the views of both owners and employees in the sampled organizations. It is possible that the views of both cohorts may differ somewhat on certain issues presented in the questionnaire. I did not control for this possibility of such happening in this study.

Future research can build upon this current research's conceptualization. Whenever possible, some of the aforementioned limitations could be addressed in subsequent studies. The amount variance explained by the factors considered in this study, which is 21% implies that other relevant factors and issues can be incorporated into the research model to increase its predictive power. The effects of security, perceived trust, and perceived risks could be investigated. This research effort can be replicated in other SSA countries to reify or debunk claims presented in this study. The data used in this study is cross-sectional in nature; future efforts could consider using longitudinal data to facilitate more insight. Industry specific studies could also be commissioned to further enhance insight. Future research using metaanalytic approaches could examine the enablers and inhibitors of e-business payment systems use intentions in the country (and region). Knowledge from such efforts stands to consolidate theories related to the acceptance of e-business payment systems use in SSA.

#### **14. Conclusion**

34 E-Business – Applications and Global Acceptance

The attention being paid to issues in a developing part of the world i.e. Nigeria in the SSA could positively serve theory consolidation and development, which goes to enrich the literature. As well, policy makers, industry leaders, and business executives wishing to understand some of the reasons why the use of e-payment has been sluggish in Nigeria may benefit from the information provided in this study. Given that the respondents from small firms in Nigeria indicated that the perceived usefulness of e-payment, their organizational readiness, top management and IS vendor support can positively influence their intention to increase their use of e-business payment solutions, I recommends that such factors should be continually monitored when decision related to the continued use of such systems are being proposed in adopting firms. Similarly, more concerted efforts need to be undertaken to sensitize business owners and their employees or increase awareness of such innovations. The need for e-business payment systems coaching and training is deserving of attention

In light of the fact that government support was not found to positively influence the intention to expand e-business payment systems use in Nigerian firms, it is reasonable to suggest that by increasing assistance in this area, many more small firms in the country may be encouraged to increase their use of such e-payment technologies. To that end, relevant government agencies and other local sources of expertise in Nigeria can be marshaled towards providing needed awareness and coaching programs aimed at encouraging positive outcomes in e-payment use in small firms in the country. With such sorts support on board, it is to be expected that more and more small firms in Nigeria will see they need to expand their use of such e-payment platforms. Small loans from local financial houses should be actively promoted to enable small firms needing such to procure needed e-

This exploratory research has its share of limitations. First, despite the fact that common method bias was not seen to pose a problem for this study's data, it is still possible that respondents may be subject to a halo effect. I accept that asking only one respondent to present a view on behalf of their organization may be problematic. Second, the results from this endeavor should not be generalized for the whole of Nigeria as only a small part of the country was included in this study. Data from other parts of the country may be different from what is reported and discussed herein. Third, the research included the views of both owners and employees in the sampled organizations. It is possible that the views of both cohorts may differ somewhat on certain issues presented in the questionnaire. I did not

Future research can build upon this current research's conceptualization. Whenever possible, some of the aforementioned limitations could be addressed in subsequent studies. The amount variance explained by the factors considered in this study, which is 21% implies that other relevant factors and issues can be incorporated into the research model to increase its predictive power. The effects of security, perceived trust, and perceived risks could be investigated. This research effort can be replicated in other SSA countries to reify or debunk claims presented in this study. The data used in this study is cross-sectional in nature; future efforts could consider using longitudinal data to facilitate more insight. Industry specific studies could also be commissioned to further enhance insight. Future research using metaanalytic approaches could examine the enablers and inhibitors of e-business payment

(Simpson & Doherty, 2004).

payment infrastructure.

**13. Limitations and avenues for future research**

control for this possibility of such happening in this study.

This chapter focused on the factors positively influencing the intention to expand the use ebusiness payment systems in Nigerian firms. A research model fusing the TAM into the TOE was used to guide the discourse. Factors including perceived usefulness, perceived ease of use, organizational readiness, top management support, IS vendor support, and government support were considered in this study. This current study's findings lend credence to results obtained elsewhere and it provides support for the relevance of the TAM and TOE as useful models for examining the use intentions of technological innovations. Perceived usefulness, organizational readiness, top management support, and IS vendor support were all found to positively influence the intention to expand the use of e-business payment systems in Nigerian firms. Accordingly, more progress can be sustained and assured when adequate attention is accorded the foregoing significant factors vis-à-vis facilitating an increase in the use behaviors of e-payment systems in Nigerian small firms. The relevant literature and practitioners stand to benefit from the information provided in this study, and it is hoped that future research will build upon the findings reported herein as efforts are made to understand technology diffusion in developing countries such as Nigeria.

#### **15. Appendix: The measurement items and scales**

#### **Perceived Usefulness**

#### **Perceived ease of use**

#### **Top management support**

#### **Organizational readiness**

Facilitating the Intention to Expand E-business

Newspaper, Wednesday February 27th 2008.

computing. *Organization Science, 3(1*), 1-19.

and Management Sciences, 1(1), 37-45.

Central Bank of Nigeria Website. Retrieved from

http://www. cenbank.org/Paymentsystem/evolution.asp.

Developing Countries, 40(1), 1-32.

and Applications, 6(4), 462-473.

Management, 22(1), 47-65.

Commerce, 11(3), 20–35.

*Quarterly*, 26(2), 65-89.

vii-xvi.

*13(2),* 1-12.

Payment Systems Use in Nigerian Small Firms: An Empirical Analysis 37

Agbada, A.O. (2008). E-banking in Nigeria, problems and prospects from customer's perspective. *CBN Bullion Magazine,* 32(4), October-December 2008 edition. Akpan, N., (2008). E-payment solutions: are banks getting it right?" Business day

Al-Ghait, W., Sanzogni, and Sandh, K. (2010). Factors influencing the adoption and usage of

Al-Qirim, N. (2007). The adoption of ecommerce communications and applications

Andam, Z. R. (2003). E-commerce and e-business, e-primer for the information economy,

Attewell, P. (1992). Technology diffusion and organizational learning: The case of business

Ayo, C. K. (2006). The Prospects of E-commerce in Nigeria. Journal of Internet Banking and

Ayo, C.K., Adebiyi, A., Fatudimu, I.T., & Ekong, U.O. (2008). A framework for e-commerce

Ayo, C. K., Adewoye, J. O, & Oni, A. A. (2011). The state of e-banking implementation in

Babalakin & Co. (2002). Cybernetic banking (changing the banking landscape in Nigeria)

Chapman, P., James-Moore, J., Szczygiel, M., & Thompson, D. (2000). Building Internet Capabilities in SME's. *Logistics Information Management*, 13(6), 353-361. Chau, Y. K., & Jim, C.F. (2002). Adoption of electronic data interchange in small and medium enterprises. *Journal of Global Information Management*, 10(4), 61-85. Chatterjee, D., Grewal, R., & Sambamurthy, V. (2002). Shaping up for e-commerce:

Chiemeke, S.C., Evwiekpaefe, O., & Chete ,F. (2006). The Adoption of Internet Banking in

Chin, W. (1998). Issues and opinion on structural equation modeling. *MIS Quarterly*, 22(1),

Chircu, A.M., & Kauffman, R.J. (2000). Limits to value in electronic commerce-related IT investments. Journal of Management Information Systems, 17(2), 59–80. Cloete, E., Courtney, S. & Fintz, J. (2002). Small business acceptance and adoption of e-

[Online] Available: http://www.arraydev.com/commerce/jibc/.

Information Systems in Developing Countries 10(4), 1–13.

implementation: Nigeria a case study. *Journal of Internet Banking and Commerce*,

Nigeria: A post-consolidation review, Journal of Emerging Trends in Economics

Institutional enablers of the organizational assimilation of web technologies. *MIS*

Nigeria: An Empirical Investigation, *Journal of Internet Banking and Commerce*, 11(3),

commerce in the Western-Cape province of South-Africa, Electronic Journal of

Amor, D. (1999). The e-business (r)evolution. Upper Saddle River, N.Y.: Prentice Hall. Anandarajan, M., Igbaria, M., & Anakwe, U. (2002). IT acceptance in a less-developed

Society and Polity Series, UNDP-APDIP and e-ASEAN Task Force.

online services in Saudi Arabia, The Electronic Journal on Information Systems in

technologies in small businesses in New Zealand. Electronic Commerce Research

country: a motivational factor perspective. International Journal of Information

#### **Government support**

#### **IS vendor support**

#### **Financial resource support**

#### **Intention to expand e-business e-payment systems**

#### **16. Acknowledgment**

The author is indebted to Prof C.K. Ayo (Covenant University, Ota, Nigeria) and Mrs Uyinomen O. Ekong (University of Uyo, Uyo, Nigeria) for their assistance in this research project. The author is grateful to C. M. Ringle, S. Wende, and A.Will for the use of their software, SmartPLS 2.0.

#### **17. References**

Adesina, A.A., Ayo, C.K. & Ekong, U.O. (2008). An empirical investigation of the level of users' acceptance of e-banking in Nigeria: based on technology acceptance model. In *Proc. of 1st Int'l Conf. on Mobile e-Services.* LAUTECH, Ogbomosho, Nigeria.

• We have the necessary technical, managerial and other skills to implement e-payment

• Our business values and norms would not prevent us from adopting e-payment

• Government policies and guidelines towards e-business (e-payment solutions) are

• We are of the view that the government adequately supports e-business and related

• IS vendors in the region are actively promoting e-business systems and other

• IS vendors are encouraging our business to adopt e-business systems by providing us

• We can easily obtain support from local IS vendors as we implement e-business systems

• Supporting institutions in Nigeria e.g. banks provide financial assistance for small firms

• Our company could easily procure financial support from financial institutions to

• My company intends to expand its use of e-payment systems rather than discontinue

• There is likelihood that my company will expand its use of e-payment options in the

The author is indebted to Prof C.K. Ayo (Covenant University, Ota, Nigeria) and Mrs Uyinomen O. Ekong (University of Uyo, Uyo, Nigeria) for their assistance in this research project. The author is grateful to C. M. Ringle, S. Wende, and A.Will for the use of their

Adesina, A.A., Ayo, C.K. & Ekong, U.O. (2008). An empirical investigation of the level of

users' acceptance of e-banking in Nigeria: based on technology acceptance model. In *Proc. of 1st Int'l Conf. on Mobile e-Services.* LAUTECH, Ogbomosho, Nigeria.

enable us implement e-payment/e-business solutions in our business

• My company will use e-payment solutions on a regular basis, in the future

• My company's intensions are to use a lot more e-payment solutions in the future

• We believe the government is championing the cause of e-business in the country • We believe the government is investing in the necessary infrastructure to support the

solutions in our firm

**Government support**

commendable

**IS vendor support**

their use

**16. Acknowledgment**

software, SmartPLS 2.0.

**17. References**

concepts in the country

with free training sessions

**Financial resource support**

solutions in our operations

emergence of e-business payment solutions.

technologies by providing incentives for adoption

wishing to adopt e-business and e-payment solutions

**Intention to expand e-business e-payment systems**

future rather than use alternative means

http://www. cenbank.org/Paymentsystem/evolution.asp.

Facilitating the Intention to Expand E-business

http://www.internetworldstats.com/

and Applications, 8(3), 130-141.

*Information & Management*, 42, 227–242.

*Information and Management*, 39(3), 165-176.

instrument. *Information &* Management, 42, 877–899. Nunnaly, J.C. (1978). *Psychometric theory*. New York, NY: McGraw-Hill.

*Information Systems*, *6(5),* 130-170.

40(3), 191-204, 2003

27 July, 2010.

86-94.

Payment Systems Use in Nigerian Small Firms: An Empirical Analysis 39

Ifinedo, P. (2008). Internet commerce and SMEs in Sub-Saharan Africa: Perspectives from

Ifinedo, P. (2011a). An empirical analysis of factors influencing Internet/e-business

Ifinedo, P. (2011b). Internet/e-business technologies acceptance in Canada's SMEs: An

Igbaria, M., Zinatelli, N., Cragg, P., & Cavaye, A.L.M., 1997. Personal computing acceptance factors in small firms: A structural equation model. MIS Quarterly, 21(3), 279-305.

ITU International Telecommunication Union (2011). Weekly Update. Retrieved April 13,

Laukkanen, T. & Pasanen, M. (2008). Mobile banking innovators and early adopters: How

Lee, M. (2009). Factors influencing the adoption of internet banking: An integration of TAM

Legris, P. Ingham, J., & Collerette, P. (2003). Why do people use information technology?: A

Leadpile (2010) 2006, United States E-commerce Sales to Top 120 Billion, says Leadpile.

Love, P.E.D., & Irani, Z. (2004). An exploratory study of information technology evaluation

Mbarika, V.W., Okoli, C., Byrd, T.A., & Datta, P. (2005). The neglected continent of IS

Mehrtens, J., Cragg, P.B., & Mills, A.M. (2001). A Model of Internet adoption by SMEs.

Molla, A., & Licker, P.S. (2005). ecommerce adoption in developing countries: a model and

Ramayah, T., Ling, C-Y, Suki, N. M., and Ibrahim, A. (2005).Determinants of intention to use an online bill payment system among MBA Students, E-Business, 9, 80-91. Reid, M. & Levy, Y. 2008. Integrating trust and computer self-efficacy with TAM: An

(BIS) in Jamaica, Journal of Internet Banking and Commerce, 12 (3), 1-8. Ozkan S. (2010). Facilitating the adoption of e-payment systems: theoretical constructs and

they differ from other online users? Journal of Financial Services Marketing, 13(2),

and TPB with perceived risk and perceived benefit. Electronic Commerce Research

critical review of the technology acceptance model. *Information and Management*,

Available at < http://www.leadpile.com/press/2006-10-24\_press1.html >. Access

and benefits management practices of SMEs in the construction industry.

research: a research agenda for Sub-Saharan Africa. *Journal of the Association for*

empirical assessment of customers' acceptance of banking information systems

empirical analysis, Journal of enterprise information management, 23(3), 305- 325.Pearson, M. & Grandon, E. (2004). E-commerce adoption: perceptions of

*(CITED2008),* Calabar, Nigeria, July 25 - 27, 2008, pp. 1- 8.

exploratory investigation, Internet Research, 21(3), 255-281.

Internetworldstats (2011). Country reports. Retrieved April 3, 2011, from

2011, from http://www.itu.int/en/pages/default.aspx.

Technology & Decision Making, 10( 4), 731–766.

Nigeria, *Conference on Information Technology and Economic Development*

technologies adoption by SMEs in Canada, International Journal of Information

CIA WorldFact (2011). Nigeria reports. Retrieved April 3, 2011, from

https://www.cia.gov/library/publications/the-world-factbook/geos/ni.html.

Doolin, D., Mcleod, L., McQueen, B., & Watton, M. (2003). Internet strategies for establishing

Dongen, J., Maitland, C., & Sadowski, B. (2002). Strategic use of the Internet by small- and

Economist Intelligence Unit. (2007). Government E-Payments Adoption Ranking: A briefing paper from the Economist Intelligence Unit. Retrieved December 16, 2008 from

EIU (Economic Intelligence Unit) (2011). Global intelligence and analysis. Retrieved March

Eze, U.C. (2008). E-business deployment in Nigerian financial firms: An empirical analysis of key factors. *International Journal of E-Business Research*, *4(2),* 29-47. Ezeoha A. E. (2005). Regulating internet banking in Nigeria: problems and challenges – Part 1." Retrieved October 13, 2010 from http://www.arraydev.com/commerce/jibc/. Farhoomand, A.F., Tuunainen, V.K., & Yee, L.W. (2000). Barriers to global electronic

Fornell, C., & Larcker, D.F. (1981). Evaluating structural equations models with

Gholami R., Ogun A., Koh E., & Lim J. (2010). Factors affecting e-payment adoption in

Hair, J.F. Jr., Anderson, R.E., Thatham, R.L., & Black, W.C. (1998). *Multivariate data analysis*.

Iacobucci, D., & Churchill, G.A. (2009). *Marketing research: Methodological foundations (with Qualtrics Card)* (10th. ed). Cincinnati, OH: South-Western College Publishing. Iacovou, C.L., Benbasat, I., & Dexter, A.S. (1995). Electronic data interchange and small organizations: adoption and impact of technology. *MIS Quarterly*, 19(4), 465–485. Ifinedo, P. (2005a). Measuring Africa's e-readiness in the global networked economy: a nine-

Ifinedo, P. (2005b). E-government initiative in a developing country: strategies and

Organizational Computing and Electronic Commerce, 10(1), 23-48.

Nigeria. *Journal of Electronic Commerce in Organizations*, *8(4),* 51-67.

Grau. J. (2008). *Canada B2C e-Commerce: A work in progress*. Availabel at

Upper Saddle River, NJ: Prentice-Hall International, Inc.

*Information and Communication Technology, 1(1)*, 53-71.

*Business*, Hamilton, Ontario, Canada, pp. 1-11.

commerce: A cross-country study of Hong Kong and Finland, Journal of

unobservable variables and measurement error. *Journal of Marketing Research*, 8(1),

< http://www.emarketer.com/Reports/All/Emarketer\_2000547.aspx >. Accessed

country data analysis. *The International Journal of Education and Development using*

implementation in Nigeria, *In Proceedings of 6th. World Congress on Electronic*

 http://corporate.visa.com/md/dl/documents/downloads/GEAR\_Paper.pdf Emordi, C.N.O., (2007). Recent development in Nigeria's Payment System, *CBN Briefs*, Series

retailers: four New Zealand case studies. *Journal of Information Technology Cases and*

medium-sized companies: An exploratory study. *Information Economics and Policy*,

 https://www.cia.gov/library/publications/the-world-factbook/geos/ni.html. Davis, F.D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of

CIA WorldFact (2011). Nigeria reports. Retrieved April 3, 2011, from

information technology. *MIS Quarterly*, *13(3),* 318-339.

*Applications*, 5(4), 3–19.

No. 2006-2007/03, pp. 23-30.

27, 2011, from http://www.eiu.com/public/.

14(1), 75-93.

39-50.

20 July 2010.

http://www.internetworldstats.com/

**3**

**Further Development of a Secured Unified**

*1Dept of Computer and Information Sciences, Covenant University, Ota, Ogun State 2Department of Industrial Psychology and People Management, Faculty of Management,*

e-Payment systems refer to the automated processes of exchanging monetary value among parties in business transactions and transmitting this value over the ICT networks. The common e-Payment channels include the payment cards (debit or credit), Online Web Portals, Point of Sales (POS) terminals, Automated Teller Machines (ATM), Mobile Phones, Automated Clearing House (ACH), direct debit/deposit and Real Time Gross Settlement

The wider patronage of e-Commerce is dependent on the availability of a secured and trusted e-Payment System (Baddeley, 2004). The various categories of e-Commerce include Business-to-Business (B2B): business transactions between organizations that involve companies buying and selling to each other; Business-to-Consumer (B2C): business transactions between organizations and consumers where goods and services are sold directly to the consumer; Consumer-to-Business (C2B): business transactions between consumers and organizations, where consumers can fix prices for both goods and services offered; and Consumer-to-Consumer (C2C): business transaction between consumers among others (Ayo, 2009). Therefore, appropriate considerations must be given to these

According to Anderson (cited in Sumanjeet, 2009), e-Payment system was classified into:

Regardless of the adopted system, the problems militating against e-Payment as listed by

• Integrity: to ascertain that transmitted financial information is unchanged in transit.

categories so that the most suitable e-Payment system can be adopted.

**1. Introduction**

(RTGS) system (Nnaka, 2009).

• Online Credit Card Payment System

• Smart Card-based Electronic Payment System.

Sumanjeet ( 2009), generally revolve around:

• Electronic Cheque System • Electronic Cash System, and **E-Payment System in Nigeria:**

Charles K. Ayo1 and Wilfred Isioma Ukpere2

**A Critical Viewpoint**

*University of Johannesburg*

*1Nigeria 2South Africa*

managers/owners of small and medium sized firms in Chile. *Communications of the Association for Information Systems*, 13, 81-102.

http://mis.uoa.gr/Portals/57ad7180-c5e7-49f5-b282-c6475cdb7ee7/Temp/e-Payment%20Systems\_Full%20Review.pdf

## **Further Development of a Secured Unified E-Payment System in Nigeria: A Critical Viewpoint**

Charles K. Ayo1 and Wilfred Isioma Ukpere2

*1Dept of Computer and Information Sciences, Covenant University, Ota, Ogun State 2Department of Industrial Psychology and People Management, Faculty of Management, University of Johannesburg 1Nigeria 2South Africa*

#### **1. Introduction**

40 E-Business – Applications and Global Acceptance

Podsakoff, P.M., MacKenzie, S.B., Lee, J.Y., & Podsakoff, N.P. (2003). Common method

Premkumar, G., & Roberts, M. (1999). Adoption of new information technologies in rural small businesses. Omega: International Journal of Management Science, 27(4), 467–484. Ringle, C.M., Wende, S., & Will, A. (2005). SmartPLS 2.0 (M3) beta, Hamburg:

Saffu, K., J.H. Walker, & Hinson R. (2007). An empirical study of perceived strategic value

Scupola, A. (2003). The adoption of Internet commerce by SMEs in the South of Italy: An

Simpson, M., & Doherty, A. J. (2004). E-commerce adoption support and advice for UK SMEs. Journal of Small Business and Enterprise Development, 11(3), 315-328 Tan, J., Tyler, K., & Manica, A. (2007). Business-to-business adoption of ecommerce in

Tan, Z., & Wu, Q. (2003). Globalization and e-commerce I: Factors affecting e-commerce

Teo, H.H., Tan, B.C.Y., & Wei, K.K. (1997). Organizational transformation using electronic

Thong, J.Y.L., Yap, C.S., & Raman, K.S. (1996). Top management support, external expertise

Tornatzky, L.G., & Fleischer, M. (1990). *The processes of technological innovation*. Lexington,

Turban, E., King, D., & Lang, J. (2010). *Introduction to electronic commerce.* New York, NY:

Tuunainen, V.K. (1998). Opportunities of effective integration of EDI for small businesses in

Vassiliou, C. (2004). Electronic payment systems and marketing: A literature review.

http://mis.uoa.gr/Portals/57ad7180-c5e7-49f5-b282-c6475cdb7ee7/Temp/e-

WEF (World Economic Forum) (2011). Global competitiveness 2009-2010. Retrieved April 2,

Zhu, K., Kraemer, K., & Xu, S. (2003). Electronic business adoption by European firms: A

cross-country assessment of the facilitators and inhibitors. European Journal of

the automotive industry. *Information & Management*, 34, 361-375.

*Association for Information Systems*, 13, 81-102.

http://www.smartpls.de.

1101.

25-35.

remedies. Journal of Applied Psychology, 88(5), 879-903.

Information Technology Management, 6(1), 52-71.

China. *Information and Management*, *44,* 332-351.

*Information Systems*, *13(4),* 139-166.

Payment%20Systems\_Full%20Review.pdf

Information Systems, 12(4), 251-268.

2011 from http://www.weforum.org/reports.

Research, 7(2), 248-267.

MA: Lexington Books.

Prentice Hall, NY.

Available at:

managers/owners of small and medium sized firms in Chile. *Communications of the*

biases in behavioral research: A critical review of the literature and recommended

and adoption constructs: the Ghanaian case, Management Decision, 45(7), 1083 –

environmental, technological and organizational perspective. Journal of Global

diffusion in China. *Communications of the Association for Information Systems*, 10(2),

data interchange: the case of TradeNet in Singapore. *Journal of Management*

and information systems implementation in small business. Information Systems

e-Payment systems refer to the automated processes of exchanging monetary value among parties in business transactions and transmitting this value over the ICT networks. The common e-Payment channels include the payment cards (debit or credit), Online Web Portals, Point of Sales (POS) terminals, Automated Teller Machines (ATM), Mobile Phones, Automated Clearing House (ACH), direct debit/deposit and Real Time Gross Settlement (RTGS) system (Nnaka, 2009).

The wider patronage of e-Commerce is dependent on the availability of a secured and trusted e-Payment System (Baddeley, 2004). The various categories of e-Commerce include Business-to-Business (B2B): business transactions between organizations that involve companies buying and selling to each other; Business-to-Consumer (B2C): business transactions between organizations and consumers where goods and services are sold directly to the consumer; Consumer-to-Business (C2B): business transactions between consumers and organizations, where consumers can fix prices for both goods and services offered; and Consumer-to-Consumer (C2C): business transaction between consumers among others (Ayo, 2009). Therefore, appropriate considerations must be given to these categories so that the most suitable e-Payment system can be adopted.

According to Anderson (cited in Sumanjeet, 2009), e-Payment system was classified into:

Regardless of the adopted system, the problems militating against e-Payment as listed by Sumanjeet ( 2009), generally revolve around:

• Integrity: to ascertain that transmitted financial information is unchanged in transit.

Further Development of a Secured Unified E-Payment System in Nigeria: A Critical Viewpoint 43

The Governor of the Central Bank of Nigeria embarked on bank recapitalization exercise as a strategic move to save the Nigerian banking sector from incessant failure and collapse (Nwachuku, 2005 and Gbolahan, 2005). The result of the exercise brought about a reduction of the 89 banks to 25 solid and strong banks through mergers, acquisition and recapitalization of asset base. As reported by Ayo et al. (2007), virtually all the 25 banks in Nigeria that survived the recapitalization exercise engaged the use of ICT for efficient

Alao (2009) reported the colossal amount of money lost in Nigeria to ATM fraud through ATM card cloning, PIN theft among others and government had resorted to removing ATM from public places as well as installing security cameras at the ATM locations to track the activities of fraudsters. However, the level of ICT usage notwithstanding, the level of adoption of e-Banking by the citizen is still very low. Table 1 shows the distribution of the

service delivery. All the banks have one form of e-Payment system or the other.

**Year Amount (Nbillion)**

The table raised a lot of issues about the influence of ICT on e-Banking and the banking habit of Nigerians, particularly the volume of cash in circulation. The amount of currency in circulation has continued to increase in view of the various efforts of government. Tables 3 and 4 will help to shed more light on the inhibiting factors which probably revolve around

It is evident from table 2 that the most prominent form of e-Payment system in Nigeria is the ATM card. It remained dominant over the years both in volume and value. The other media such as the Internet payment, POS and Mobile payments are still at their infancies. The level of involvement of these instruments of payment presents a clearer picture of the low level of involvement of Nigerians in e-Commerce, knowing fully well that ATM cards are not

545.7 642.4 770.1 960.5 1,155.1 1,184.3

amount of currency in circulation from 2004 to 2008 in Nigeria.

Source: CBN Annual Reports: 2006, 2007, 2008, 2009

suitable for international settlement of transactions.

lack of safety, trust and security.

Table 1. Distribution of the amount of Currency in Circulation.

Therefore, any reliable e-Payment System should guarantee privacy, integrity, compatibility, efficiency, acceptability, convenience, mobility, anonymity and low financial risk. The smart card-based e-Payment system is essentially a credit card sized plastic card with memory chips and probably an embedded microprocessor that offers greater storage capacity than the ordinary credit card. While the credit card stores a single charge account number in the magnetic stripe, the smart card can hold hundreds of such data, and can serve multiple identification purposes such as personal identification, bank account identification and transactions, health insurance identification among others (Sumanjeet, 2009). Therefore, the objectives of this paper is to design a unified (single) smart card-based e-Payment system that can be used for banking transactions in all the banks in Nigeria as well as serving other forms of identification.

Zulu (2006) identified the challenges of e-Payment in Africa as inadequate telecommunication infrastructure which include: connectivity failure in telephone lines; low Internet bandwidth; high Internet cost, unavailability of dedicated data service networks; and close financial networks as well as frequent power interruption. Similarly, he identified lack of proper legal and regulatory framework and low level of credit access as the other challenges. The threats notwithstanding, there are standard security features already developed to handle them. Some of the available solutions include public-key cryptography, digital signature and certificate, secure socket layer (SSL), and secure electronic transaction (SET) as well as the introduction of biometrics authentication among others (Pesonen, 1998; Zulu, 2006 and Ayo, 2009).

One of the greatest threats to e-Banking is the increasing trends of identity theft, which is a major challenge to the Internet age (Helmbrecht, 2008). Therefore, there is need for a technology that is safe, convenient and not too demanding on the part of the user because of the level of literacy in the developing nations of the world, particularly Nigeria.

The other part of the paper is arranged as follows: section 2 presents the state of e-Payment in Nigeria; section 3 presents the research design; section 4 presents the system design; while section 5 presented the economic consideration of the design and; the conclusion of the work is presented in section 6.

#### **2. The state of e-payment in Nigeria**

Nigeria is predominantly a cash-based economy with a lot of cash in circulation. Analysts opined that the cash-based nature of payments in the country is responsible for the abysmally low level of participation in e-Commerce where the acceptable medium of settling transactions is e-Payment (Ojo, 2004; Ayo, 2007; & Ovia, 2002).

• Confidentiality: to ascertain that transactions are protected from possible

• Authentication: to ascertain that there are reliable proofs of identities of all parties

• Authorization: to ascertain that individuals are recognized and granted the desired

Therefore, any reliable e-Payment System should guarantee privacy, integrity, compatibility, efficiency, acceptability, convenience, mobility, anonymity and low financial risk. The smart card-based e-Payment system is essentially a credit card sized plastic card with memory chips and probably an embedded microprocessor that offers greater storage capacity than the ordinary credit card. While the credit card stores a single charge account number in the magnetic stripe, the smart card can hold hundreds of such data, and can serve multiple identification purposes such as personal identification, bank account identification and transactions, health insurance identification among others (Sumanjeet, 2009). Therefore, the objectives of this paper is to design a unified (single) smart card-based e-Payment system that can be used for banking transactions in all the banks in Nigeria as well as serving other

Zulu (2006) identified the challenges of e-Payment in Africa as inadequate telecommunication infrastructure which include: connectivity failure in telephone lines; low Internet bandwidth; high Internet cost, unavailability of dedicated data service networks; and close financial networks as well as frequent power interruption. Similarly, he identified lack of proper legal and regulatory framework and low level of credit access as the other challenges. The threats notwithstanding, there are standard security features already developed to handle them. Some of the available solutions include public-key cryptography, digital signature and certificate, secure socket layer (SSL), and secure electronic transaction (SET) as well as the introduction of biometrics authentication among others (Pesonen, 1998;

One of the greatest threats to e-Banking is the increasing trends of identity theft, which is a major challenge to the Internet age (Helmbrecht, 2008). Therefore, there is need for a technology that is safe, convenient and not too demanding on the part of the user because of

The other part of the paper is arranged as follows: section 2 presents the state of e-Payment in Nigeria; section 3 presents the research design; section 4 presents the system design; while section 5 presented the economic consideration of the design and; the conclusion of

Nigeria is predominantly a cash-based economy with a lot of cash in circulation. Analysts opined that the cash-based nature of payments in the country is responsible for the abysmally low level of participation in e-Commerce where the acceptable medium of

the level of literacy in the developing nations of the world, particularly Nigeria.

settling transactions is e-Payment (Ojo, 2004; Ayo, 2007; & Ovia, 2002).

• Non-repudiation: to ascertain that all parties have non-deniable proof of receipt.

• Reliability: to ascertain that there is reduced possibility of failure.

eavesdroppers.

rights and privileges.

involved.

forms of identification.

Zulu, 2006 and Ayo, 2009).

the work is presented in section 6.

**2. The state of e-payment in Nigeria**

The Governor of the Central Bank of Nigeria embarked on bank recapitalization exercise as a strategic move to save the Nigerian banking sector from incessant failure and collapse (Nwachuku, 2005 and Gbolahan, 2005). The result of the exercise brought about a reduction of the 89 banks to 25 solid and strong banks through mergers, acquisition and recapitalization of asset base. As reported by Ayo et al. (2007), virtually all the 25 banks in Nigeria that survived the recapitalization exercise engaged the use of ICT for efficient service delivery. All the banks have one form of e-Payment system or the other.

Alao (2009) reported the colossal amount of money lost in Nigeria to ATM fraud through ATM card cloning, PIN theft among others and government had resorted to removing ATM from public places as well as installing security cameras at the ATM locations to track the activities of fraudsters. However, the level of ICT usage notwithstanding, the level of adoption of e-Banking by the citizen is still very low. Table 1 shows the distribution of the amount of currency in circulation from 2004 to 2008 in Nigeria.

Source: CBN Annual Reports: 2006, 2007, 2008, 2009

Table 1. Distribution of the amount of Currency in Circulation.

The table raised a lot of issues about the influence of ICT on e-Banking and the banking habit of Nigerians, particularly the volume of cash in circulation. The amount of currency in circulation has continued to increase in view of the various efforts of government. Tables 3 and 4 will help to shed more light on the inhibiting factors which probably revolve around lack of safety, trust and security.

It is evident from table 2 that the most prominent form of e-Payment system in Nigeria is the ATM card. It remained dominant over the years both in volume and value. The other media such as the Internet payment, POS and Mobile payments are still at their infancies. The level of involvement of these instruments of payment presents a clearer picture of the low level of involvement of Nigerians in e-Commerce, knowing fully well that ATM cards are not suitable for international settlement of transactions.

Further Development of a Secured Unified E-Payment System in Nigeria: A Critical Viewpoint 45

**Male** 140 58.6 **Female** 99 41.4 **Total** 239 100%

 **Frequency Percent <20** 25 10.4 **21 - 30** 77 32.2 **31 - 40** 95 39.7 **41 - 50** 28 11.7 **51+** 14 5.9 **Total** 239 100%

 **Frequency Percent Valid NONE** 26 10.9 **Primary School** 4 1.7 **High School** 11 4.6 **OND/NCE** 24 10 **BSc/HND degree** 58 24.3 **Post Graduate** 102 42.7 **Others** 14 5.9 **Total** 239 100%

 **Frequency Percent Valid Others** 36 15.1 **Finance** 47 19.7 **Manufacturing** 33 13.8 **Oil & Gas** 13 5.4 **Aviation** 4 1.7 **Education** 21 8.8 **IT & Telecom** 85 35.6 **Total** 239 100%

**Frequency Percent**

**Gender of Respondents**

**Age of Respondents**

**Educational Level of Respondents**

**Sector where Respondents Work**

Table 3. Demographic profile of Respondents.

Source: CBN Annual Reports: 2006, 2007, 2008

Table 2. Level of adoption of e-Payment system.

Source: CBN Annual Reports: 2007, 2008 and 2009

Table 2. Level of adoption of e-Payment system.

#### **3. Research design**

The research design is two-fold. On one hand, a set of questionnaire was designed and administered randomly to 300 respondents out which 239 were returned representing about 80%. Cronbach's reliability value of 0.782 was obtained, which attests to the reliability of the instrument. Pertinent questions about the demographic profile of respondents as well as the state and operations of ATM Card were asked and the data collected was analysed based on descriptive statistics using the SPSS and the results were presented in tables 3, 4 and 5. On the other hand, a design of the proposed unified Smart Card-based ATM was presented as well as its activity diagram.

**ATM 93.16 88.7 91.0 73.35 88.5 90.5**

**Web (Internet) 1.71 5.1 2.4 3.51 7.1 5.7**

**POS 4.83 2.4 1.8 23.04 4.3 3.7**

**Mobile 0.31 3.8 4.8 0.11 0.1 0.2**

**ATM 131.5 399.7 548.6**

**Web (Internet) 10.6 25.05 84.5**

**POS 6.4 16.12 11.04**

**Mobile 0.09 0.07 1.26**

The research design is two-fold. On one hand, a set of questionnaire was designed and administered randomly to 300 respondents out which 239 were returned representing about 80%. Cronbach's reliability value of 0.782 was obtained, which attests to the reliability of the instrument. Pertinent questions about the demographic profile of respondents as well as the state and operations of ATM Card were asked and the data collected was analysed based on descriptive statistics using the SPSS and the results were presented in tables 3, 4 and 5. On the other hand, a design of the proposed unified Smart Card-based ATM was presented as

**Volume % Value %**

**2006 2007 2008 2006 2007 2008**

**Value (N' Billion) (\$1 = N155)**

**2007 2008 2009**

**Payment Instruments**

**Payment Instruments**

**3. Research design**

well as its activity diagram.

Source: CBN Annual Reports: 2006, 2007, 2008

Table 2. Level of adoption of e-Payment system.

Source: CBN Annual Reports: 2007, 2008 and 2009 Table 2. Level of adoption of e-Payment system.

Table 3. Demographic profile of Respondents.

Further Development of a Secured Unified E-Payment System in Nigeria: A Critical Viewpoint 47

Reliability of ATM Services 60 (25.1%) 97 (40.6%) 64 (26.8%) 18 (7.5%) 239 (100.0%)

Covenience of ATM Services 141 (59.0%) 56 (23.4%) 27 (11.3%) 15 (6.3%) 239 (100.0%)

Simplicity of ATM Services 165 (69.0%) 26 (10.9%) 31 (13.0%) 17 (7.1%) 239 (100.0%)

Safety of ATM Services 39 (16.3%) 123 (51.5%) 59 (24.7%) 18 (7.5%) 239 (100.0%)

Privacy of ATM Services 76 (31.8%) 90 (37.7%) 50 (20.9%) 23 (9.6%) 239 (100.0%)

Desirability of One ATM Card 88 (36.8%) 76 (31.8%) 36 (15.1%) 39 (16.3%) 239 (100.0%)

Machines 160 (66.9%) 19 (7.9%) 23 (9.6%) 37 (15.5%) 239 (100.0%)

The screen has eight (8) buttons arranged at the two sides (4 at each side). The features of the

**Features**

• Cancel

**Operation buttons**  • OK/Enter/Accept

• Correction/Change/Clear/Blank

Table 5. Distribution of the respondents experience with ATM cards.

ATM are presented in table 6 and a typical picture shown in figure 1.

**Character Key**s

• (A-Z, \*, #, -, +)

UBA Yes Yes OK, Change, Cancel and Blank

CMFB Yes No Enter, Clear, Cancel and Blank

Oceanic Yes Yes Accept, Correction, Cancel and Blank InterContinental Yes Yes Accept, Correction, Cancel and Blank

Table 6 shows the features of the ATM of four banks (UBA, Oceanic, Intercontinental and CMFB) in Nigeria. It is obvious that no special design is required. A common choice for the

A typical ATM has a keypad that is composed of:

3. Operational buttons (Accept, Correction, Cancel)

**Numeric Keys** • (0-9)

Table 6. Features of ATM Cards.

Include Fingerprint on ATM

**4. System design**

1. Numeric Keys (0-9) 2. Character Keys (A – Z)

Bank

**Do not**

**Know Total**

 **Agree Disagree Neutral**

#### **3.1 Discussion**

Out of the 239 respondents, about 59% of them are male while about 41% of them are female. From the age distribution, over 90% of the respondents are at least 20 years old. Keeping in mind that persons below the age of 18 years are not permitted to operate a bank accounts in Nigeria because that is seen as the age of apprenticeship. Furthermore, about 90% of the respondents have at least the first school leaving certificate (primary school), while only 10% of them (26 out of 239) did not indicate to have had any formal education at any level. Majority of the respondents (35.6%) work in the IT and Telecoms sector, followed by the finance sector (19.7%), the manufacturing sector (13.8%), the education sector (8.8%) and those outside the finance, manufacturing, oil and gas, aviation, education and IT and Telecoms account for 15.1% of the respondents.

Table 4. Distribution of the respondents and banking transactions.

It is interesting to note that majority (about 98%) of the respondents operate a bank account. Also, about 88% of the respondents have two ATM cards or more. This gives validity to the proposed unified e-Payment system.

Most of the respondents attested to the convenience of the ATM services (59%) as well as its simplicity (69%). However, its reliability (25%), safety (16.3%) and privacy (31.8%) are in doubt. Therefore, a greater percentage of the respondents disagreed with its reliability, safety and privacy features. However, most of the respondents favour the desirability of having a unified (single) ATM card for all banking transactions (36.8%) as well as the inclusion of a fingerprint reader on the teller machine (66.9%).

Table 5. Distribution of the respondents experience with ATM cards.

#### **4. System design**

46 E-Business – Applications and Global Acceptance

Out of the 239 respondents, about 59% of them are male while about 41% of them are female. From the age distribution, over 90% of the respondents are at least 20 years old. Keeping in mind that persons below the age of 18 years are not permitted to operate a bank accounts in Nigeria because that is seen as the age of apprenticeship. Furthermore, about 90% of the respondents have at least the first school leaving certificate (primary school), while only 10% of them (26 out of 239) did not indicate to have had any formal education at any level. Majority of the respondents (35.6%) work in the IT and Telecoms sector, followed by the finance sector (19.7%), the manufacturing sector (13.8%), the education sector (8.8%) and those outside the finance, manufacturing, oil and gas, aviation, education and IT and

 **Frequency Percent**

**Frequency Percent**

**No** 3 1.3 **Yes** 234 97.9 **Total** 239 100

**Valid None** 2 8

**Valid None** 4 1.7

It is interesting to note that majority (about 98%) of the respondents operate a bank account. Also, about 88% of the respondents have two ATM cards or more. This gives validity to the

Most of the respondents attested to the convenience of the ATM services (59%) as well as its simplicity (69%). However, its reliability (25%), safety (16.3%) and privacy (31.8%) are in doubt. Therefore, a greater percentage of the respondents disagreed with its reliability, safety and privacy features. However, most of the respondents favour the desirability of having a unified (single) ATM card for all banking transactions (36.8%) as well as the

**One** 24 10 **Two or More** 211 88.3 **Total** 239 100

**3.1 Discussion**

Telecoms account for 15.1% of the respondents.

**Have Bank Accounts**

**Number of ATM Cards Possessed**

Table 4. Distribution of the respondents and banking transactions.

inclusion of a fingerprint reader on the teller machine (66.9%).

proposed unified e-Payment system.

A typical ATM has a keypad that is composed of:

The screen has eight (8) buttons arranged at the two sides (4 at each side). The features of the ATM are presented in table 6 and a typical picture shown in figure 1.

Table 6. Features of ATM Cards.

Table 6 shows the features of the ATM of four banks (UBA, Oceanic, Intercontinental and CMFB) in Nigeria. It is obvious that no special design is required. A common choice for the

Further Development of a Secured Unified E-Payment System in Nigeria: A Critical Viewpoint 49

The activity diagram is shown in figure 3. It shows an additional layer of information, which is the selection of bank to transact business with since a single card is being used for several banks, after which the usual (old) display follows: User identification (PIN) but now with fingerprint capture; Selection of Operation (Enquiry, Withdrawal etc); Selection of amount

of money; Request for receipts and Exit.

Fig. 3. Activity diagram of the proposed system.

Furthermore, all other changes are software based. The ATM monitor has 8 operational buttons distributed at both sides of the screen. There are 25 banks in Nigeria, modeled banks A to Y, therefore 7 banks can be listed per screen while the 8th key reads "More" for the next screen of 7 banks and the "More" Key, more and more until all the banks are displayed.

design is one that has numeric keys (0-9), character keys (A-Z, \*, #, -, +), and operation buttons (OK, Change, Cancel), while the blank button can be replaced with the biometric fingerprint reader.

The structure in figure 2 represents the unified Smart Card-based ATM Card that has the possibility of being used for multiple identifications. Four (4) different ATM Cards for the four banks were considered and their features incorporated to arrive at this design. Furthermore, considering the spate of identity fraud, the law enforcement agencies should be able to check at random the various ATM locations to verify the identity of the carrier, though less frequently, hence the inclusion of the holder's passport, gender and or signature. Similarly, in case of accident the blood group is included. All other details are contained on the National Bank's Databank which is a repository of the identities of all banks' customers in Nigeria.

Fig. 1. A typical ATM.

Fig. 2. Smart Card-based ATM Card.

design is one that has numeric keys (0-9), character keys (A-Z, \*, #, -, +), and operation buttons (OK, Change, Cancel), while the blank button can be replaced with the biometric

The structure in figure 2 represents the unified Smart Card-based ATM Card that has the possibility of being used for multiple identifications. Four (4) different ATM Cards for the four banks were considered and their features incorporated to arrive at this design. Furthermore, considering the spate of identity fraud, the law enforcement agencies should be able to check at random the various ATM locations to verify the identity of the carrier, though less frequently, hence the inclusion of the holder's passport, gender and or signature. Similarly, in case of accident the blood group is included. All other details are contained on the National Bank's Databank which is a repository of the identities of all

fingerprint reader.

banks' customers in Nigeria.

Fig. 1. A typical ATM.

Fig. 2. Smart Card-based ATM Card.

The activity diagram is shown in figure 3. It shows an additional layer of information, which is the selection of bank to transact business with since a single card is being used for several banks, after which the usual (old) display follows: User identification (PIN) but now with fingerprint capture; Selection of Operation (Enquiry, Withdrawal etc); Selection of amount of money; Request for receipts and Exit.

Fig. 3. Activity diagram of the proposed system.

Furthermore, all other changes are software based. The ATM monitor has 8 operational buttons distributed at both sides of the screen. There are 25 banks in Nigeria, modeled banks A to Y, therefore 7 banks can be listed per screen while the 8th key reads "More" for the next screen of 7 banks and the "More" Key, more and more until all the banks are displayed.

Further Development of a Secured Unified E-Payment System in Nigeria: A Critical Viewpoint 51

Alao Salimon (2009): Need to guard against ATM frauds, *Financial Standard*, Vol. 9, No. 479,

Ayo C. K. (2009): "Information Systems and Technologies". McKay Educational Series,

Ayo Charles K., Uyinomen O. Ekong, Fatudimu Ibukun Tolulope, and Adebiyi Ayodele A,

Ayo Charles. K and Babajide Daniel O (2006): Designing a Reliable E-payment System:

Baddeley M. (2004): Using e-Cash in the new Economy: An Economic Analysis of Micropayment Systems, *Journal of Electronic Research*, Vol. 5, No. 7, pp239-253 CBN Report (2006): "CBN Annual Report for the Year 2006", Access date: June 2009, Available at: http://www.cenbank.org/documents/annualreports.asp CBN Report (2007): "CBN Annual Report for the Year 2007", Access date: June 2009, Available at: http://www.cenbank.org/documents/annualreports.asp CBN Report (2008): "CBN Annual Report for the Year 2008", Access date: June 2009, Available at: http://www.cenbank.org/documents/annualreports.asp CBN Report (2009): "CBN Annual Report for the Year 2009", Access date: June 2009, Available at: http://www.cenbank.org/documents/annualreports.asp Okoegwale Emmanuel (2011): "Nigeria Mobile Payment & Agency Banking Risk", accessed date: May, 2011, available at: http://mobilemoneyafrica.com/?p=3422 Gbolahan Dada (2005): Banking Sector Consolidation – Integration of IT applications is key,

Helmbrecht U. (2008): The electronic identity card – A safe tool for unambiguous

https://www.bsi.bund.de/cae/servlet/contentblob/486520/publicationFile/3115

Pesonen Lauri (1998): Electronic money, electronic identity impact on telecommunications

Nnaka Priscilia (2009): The Nigeria e-Payment System, *Nigeria Monthly*, Vol. 4, No. 8. pp25-

Nwachukwo Chris (2005): Recapitalization: Bank Workers endorse categorization, access date: 2005, Available at: http://allafrica.com/stories/200504010318.htm Ojo A. T. (2004): "Enhancing the efficiency of the payment system: Conceptual Framework", A paper presented at the 9th CBN Monetary Policy Forum, Abuja, May 2004. Ovia Jim (2002): "Payment System and Financial Innovations", A paper presented at the

Sumanjeet S. (2009): Emergence of Payment Systems in the age of Electronic Commerce: The State of Art, *Global Journal of Business Research*, vol. 2, no. 2, pp17-36.

identification on the Internet, Acess date: Sept. 2009, Available at:

Smart Card based solutions, Access date: June 2009, Available at:

http://www.netlab.tkk.fi/opetus/s38001/s98/Session7\_1.pdf

http://www.arraydev.com/commerce/JIBC/2007-

http://www.arraydev.com/commerce/JIBC/2006-08/AYO.asp

08/Ayo\_final\_PDF%20Ready.pdf

*Finacial Standard*, Vol. 6, No. 11, pg 24.

Annual Policy Conference, Nov. 2002.

2/231008ANTS\_VOE\_pdf.pdf

27

11, No.2, Available at:

(2007): M-Commerce Implementation in Nigeria: Trends and Issues, *Journal of Internet Banking and Commerce*, August 2007, Vol. 12, No.2, Available at:

Nigeria a Case Study, *Journal of Internet Banking and Commerce*, August 2006, Vol.

**9. References**

pp17-18.

649p.

#### **5. Cost implication of the design**

The cost implication of this design is very minimal on the part of the operators (banks). All the Keypads have a blank button which can be replaced with fingerprint reader through the USB Connection to the CPU. Similarly, the cost of card redesign is not considered a major challenge since each card has expiry date. Therefore, the cost of a new card is borne by the card holder. Similarly, all other changes are software based: the selection of banks and fingerprint authentication which can be taken for regular software update and the cost borne by the operator. However, the major task is the integration of the various banks accounts into the National Banks' Databank. This design approach will most likely be a cheaper alternative than installing security cameras at each location in addition to the cost of relocating the machines to more secure premises.

#### **6. Limitations of the study**

From available statistics, 80% of the Nigerian populace are unbanked and 70% of the populace are illiterate (Ayo, 2009 and Okoegwale, 2011). Therefore, the limitations of the system include: high illiteracy level and lack of banking culture arising from lack of confidence and trust in the banking system.

#### **7. Scope for future research**

Future research should investigate the Usability of the system as it is likely to impart positively on the banking habit if it is user friendly, reliable and efficient. Furthermore, since the Voting and Banking age is 18years, with increased percentage of the banking populace the card could be further developed for use as the voter's card with a reliable databank formed from the combined databases of the switching companies. Also, the incorporation of voice processing can help persons with disability, particularly the visually impaired to transact banking businesses.

#### **8. Conclusion**

The level of adoption of ICT in the banking sector in Nigeria is on the increase, yet the amount of cash in circulation is equally increasing, a situation which is attributable to lack of safety, security, privacy and reliability in the e-Payment instruments. Therefore, the introduction of a smart card-based ATM with biometric authentication will ameliorate these challenges. More than that, the design of a unified smart card-based ATM with biometric authentication is cost-effective and secured. No special design is required as the current system can accommodate the proposed features at minimal cost.

The fingerprint scanner can be accommodated on the keypad while a slight software redesign is required to accommodate a layer of service that will enable the user select a bank of choice. Most importantly, the number of ATM required is drastically reduced, which reduces the cost of production and renewal, and there is enhanced safety, security, and privacy. Furthermore, the fingerprint authentication will be a cheaper alternative than to relocate all ATMs in Nigeria (several thousands of them), to safer premises and the inclusion of security camera at each location.

#### **9. References**

50 E-Business – Applications and Global Acceptance

The cost implication of this design is very minimal on the part of the operators (banks). All the Keypads have a blank button which can be replaced with fingerprint reader through the USB Connection to the CPU. Similarly, the cost of card redesign is not considered a major challenge since each card has expiry date. Therefore, the cost of a new card is borne by the card holder. Similarly, all other changes are software based: the selection of banks and fingerprint authentication which can be taken for regular software update and the cost borne by the operator. However, the major task is the integration of the various banks accounts into the National Banks' Databank. This design approach will most likely be a cheaper alternative than installing security cameras at each location in addition to the cost of

From available statistics, 80% of the Nigerian populace are unbanked and 70% of the populace are illiterate (Ayo, 2009 and Okoegwale, 2011). Therefore, the limitations of the system include: high illiteracy level and lack of banking culture arising from lack of

Future research should investigate the Usability of the system as it is likely to impart positively on the banking habit if it is user friendly, reliable and efficient. Furthermore, since the Voting and Banking age is 18years, with increased percentage of the banking populace the card could be further developed for use as the voter's card with a reliable databank formed from the combined databases of the switching companies. Also, the incorporation of voice processing can help persons with disability, particularly the visually impaired to

The level of adoption of ICT in the banking sector in Nigeria is on the increase, yet the amount of cash in circulation is equally increasing, a situation which is attributable to lack of safety, security, privacy and reliability in the e-Payment instruments. Therefore, the introduction of a smart card-based ATM with biometric authentication will ameliorate these challenges. More than that, the design of a unified smart card-based ATM with biometric authentication is cost-effective and secured. No special design is required as the current

The fingerprint scanner can be accommodated on the keypad while a slight software redesign is required to accommodate a layer of service that will enable the user select a bank of choice. Most importantly, the number of ATM required is drastically reduced, which reduces the cost of production and renewal, and there is enhanced safety, security, and privacy. Furthermore, the fingerprint authentication will be a cheaper alternative than to relocate all ATMs in Nigeria (several thousands of them), to safer premises and the inclusion

system can accommodate the proposed features at minimal cost.

**5. Cost implication of the design**

relocating the machines to more secure premises.

confidence and trust in the banking system.

**6. Limitations of the study**

**7. Scope for future research**

transact banking businesses.

of security camera at each location.

**8. Conclusion**

http://www.arraydev.com/commerce/JIBC/2006-08/AYO.asp

**Knowledge Management with Multi-Agent**

There is a growing recognition in the business community about the importance of knowledge as a critical resource for enterprises. The purpose of knowledge management is to help enterprises create, derive, share and use knowledge more effectively to achieve better decisions, increase of competitiveness and fewer errors. In order to run business effectively an enterprise needs more and more information about competitors, partners, customers, and also employees as well as information about market conditions, future trends, government policies and much more. There are several products and technologies available on the market that support advanced Business Process Management (BPM) and advanced decision support. Enterprises expect these applications to support wide range of functionalities – analyses of customer profiles, building and analysing business strategies, developing customer-specific products, carrying out targeted marketing and predicting sales trends. Amount of documents in the Web, enterprise data repositories, and public document management systems with documents they persist are all growing. This huge amount of data is managed in some extent, but knowledge workers, managers, and executives still have to spend much of their working time reading dozens of various types of electronic documents spread over several sources in process of making decisions. There is just too much information to digest in a daily life. The tremendous amount of documents that is still growing has far exceeded the human ability for comprehension without intelligent tools. Different applications within information systems (IS) that support wide range of functionalities need to be integrated in order to provide the appropriate level of information support. One of the prominent approaches for IS integration is the use of ontologies and Multi-Agent Systems (Fuentes, Carbo et al. 2006;

The approach presented in this chapter is targeted towards using ontologies for several tasks, where emphasis is on using business rules (BR) approach for interoperability between business user and IS. By introduction of BR approach business users do not have to be fully familiar with the technology to manipulate the common understanding of a problem domain in a form of ontology and therefore enabling agents to execute defined analyses models. The use of ontologies in MAS environment enables agents to share a common set of concepts about contexts, user profiles, products and other domain elements while interacting with each other. Agents can exploit the existing reasoning mechanisms to infer

**1. Introduction**

Soo, Lin et al. 2006).

**System in BI Systems Integration**

*University of Ljubljana, Faculty of Computer and Information Science*

Dejan Lavbič

*Slovenia*

Zulu Brenda (2006): E- payment a challenge for Africa, Access date: Sept. 2009, Available at: http://brendait.blogspot.com/2006/03/e-payment-challenge-for-africa.html **4**

## **Knowledge Management with Multi-Agent System in BI Systems Integration**

Dejan Lavbič

*University of Ljubljana, Faculty of Computer and Information Science Slovenia*

#### **1. Introduction**

52 E-Business – Applications and Global Acceptance

Zulu Brenda (2006): E- payment a challenge for Africa, Access date: Sept. 2009, Available at:

There is a growing recognition in the business community about the importance of knowledge as a critical resource for enterprises. The purpose of knowledge management is to help enterprises create, derive, share and use knowledge more effectively to achieve better decisions, increase of competitiveness and fewer errors. In order to run business effectively an enterprise needs more and more information about competitors, partners, customers, and also employees as well as information about market conditions, future trends, government policies and much more. There are several products and technologies available on the market that support advanced Business Process Management (BPM) and advanced decision support. Enterprises expect these applications to support wide range of functionalities – analyses of customer profiles, building and analysing business strategies, developing customer-specific products, carrying out targeted marketing and predicting sales trends. Amount of documents in the Web, enterprise data repositories, and public document management systems with documents they persist are all growing. This huge amount of data is managed in some extent, but knowledge workers, managers, and executives still have to spend much of their working time reading dozens of various types of electronic documents spread over several sources in process of making decisions. There is just too much information to digest in a daily life. The tremendous amount of documents that is still growing has far exceeded the human ability for comprehension without intelligent tools. Different applications within information systems (IS) that support wide range of functionalities need to be integrated in order to provide the appropriate level of information support. One of the prominent approaches for IS integration is the use of ontologies and Multi-Agent Systems (Fuentes, Carbo et al. 2006; Soo, Lin et al. 2006).

The approach presented in this chapter is targeted towards using ontologies for several tasks, where emphasis is on using business rules (BR) approach for interoperability between business user and IS. By introduction of BR approach business users do not have to be fully familiar with the technology to manipulate the common understanding of a problem domain in a form of ontology and therefore enabling agents to execute defined analyses models. The use of ontologies in MAS environment enables agents to share a common set of concepts about contexts, user profiles, products and other domain elements while interacting with each other. Agents can exploit the existing reasoning mechanisms to infer

Knowledge Management with Multi-Agent System in BI Systems Integration 55

(Gruber 1993) as follows: "An ontology is an explicit specification of a conceptualization", where a conceptualization is an abstract, simplified view of the world that we wish to represent for some purpose. Ontologies can be considered as conceptual schemata, intended to represent knowledge in the most formal and reusable way possible. Formal ontologies are represented in logical formalisms, such as OWL, which allow automatic inferencing over them. An important role of ontologies is to serve as schemata or intelligent views over information resources. Thus they can be used for indexing, querying, and reference purposes over non-ontological datasets and systems, such as databases, document and catalogue management systems. Because ontological languages have a formal semantics, ontologies allow a wider interpretation of data that is inference of facts which are not explicitly stated. In this way, they can improve the interoperability of the conceptualization behind them, their coverage of arbitrary datasets. Ontology can formally be defined as specific sort of knowledge base and can be characterized as comprising a 4-tuple (Davies,

Where C is set of classes representing *concepts* we wish to reason about in the given domain (Offer, Finding, Phone, Customer etc.). R is set of *relations* holding between those classes (Message hasRecipient Actor). I is a set of *instances*, where each instance can be an instance of one or more classes and can be linked to other instances by relations (Nokia isA PhoneBrand; Finding309 hasValue 11,23). A is a set of *axioms* (If a new customer buys Nokia E71, promotional discount of 10% should be offered). It is widely recommended that knowledge bases, containing concrete data (instance data or ABox) are always encoded with respect to ontologies, which encapsulate a general conceptual model of some domain

Decision support systems (DSS) have evolved significantly and there have been many influences from technological and organizational developments (Shim, Warkentin et al. 2002). DSS once utilized more limited database, modelling, and user interface functionality, but technological innovations enabled more powerful DSS functionality. DSS once supported individual decision makers, but later DSS technologies are applied to workgroups or teams, especially virtual teams. The advent of the Web has enabled interorganizational DSS and has given rise to numerous new applications of existing technology as well as many new decision support technologies themselves. Internet facilitates access to data, information and knowledge sources, but at the same time, it threatens to cognitively overload the decision makers. Authors in (Vahidov & Kersten 2004) claim that internet technologies require a new type of decision support that provides tighter integration and higher degree of direct interaction with the problem domain. Based on that they propose a generic architecture where dynamic and highly complex electronic environments DSS's should be situated in the problem domain. Chen et al. conducted an interesting research about integrated interactive environment for knowledge discovery from heterogeneous data resources (Chen, Zhu et al. 2001). Their work is grounded on acquiring, collecting, and extracting relevant information from multiple data sources, and then forming meaningful

knowledge, thus allowing easier sharing and reuse of KBs.

O = C, R, I, A (1)

Studer et al. 2006):

**3. Related work**

high-level unknown contexts from known contexts, to make decisions and to adapt to the environment, current status, and personal setting of the user. The purpose of this chapter is to present integration of several information resources for Decision Support in Enterprises using agent-oriented approach based on ontologies. The goal of our research is to minimize the gap between business users and agents as special type of application systems that perform tasks in their behalf. The intention was to apply BR approach for ontology manipulation in MAS. Ontology used in our Multi-Agent System for Decision Support in Enterprises (DSS-MAS) was divided into task and domain ontologies while business users were enabled to manipulate them directly in a user friendly environment without requirement of detailed technical knowledge.

The remainder of this chapter is structured as follows. First we present some background in the following section 2 with emphasis on agents, ontologies and related work with clear definition of the problem and proposal for solution. Next, in section 3, we introduce our case study of integrated Multi-Agent environment from the domain of mobile communications with emphasis on architecture and the roles of agents and ontologies. The case study is focused in one of the mobile operators and furthermore oriented to supply and demand of mobile phones. After presentation of system architecture and decomposition of ontology of every agent from DSS-MAS will be presented in detail. Details of case study implementation will be given in section 4. Finally the last section 5 presents conclusions.

#### **2. Multi-agent systems and ontologies**

**Multi-Agent Systems (MAS)** offer a new dimension for cooperation and coordination in an enterprise. The MAS paradigm provides a suitable architecture for a design and implementation of integrated IS. With agent-based technology a support for complex IS development is introduced by natural decomposition, abstraction and flexibility of management for organisational structure changes (Kishore, Zhang et al. 2006). The MAS consists of a collection of autonomous agents that can define their own goals and actions and can interact and collaborate through communication means. In a MAS environment, agents work collectively to solve specific enterprises' problems. MAS provide an effective platform for coordination and cooperation among multiple functional units in an enterprise. The research on agents and MAS has been on the rise over the last two decades. The stream of research on IS and enterprise integration (Lei, Motta et al. 2002; Kang & Han 2003; Tewari, Youll et al. 2003) makes the MAS paradigm appropriate platform for integrative decision support within IS. Similarities between the agent in the MAS paradigm and the human actor in business organisations in terms of their characteristics and coordination lead us to a conceptualisation where agents in MAS are used to represent actors in human organizations.

Today, semantic technologies based on **ontologies** and inference are considered as a promising means towards the development of the Semantic Web (Davies, Studer et al. 2006). In the field of Computer Science and Information Technology (IT) in general ontology has become popular as a paradigm for knowledge representation in Artificial Intelligence (AI), by providing a methodology for easier development of interoperable and reusable knowledge bases (KB). The most popular definition, from an AI perspective, is given in (Gruber 1993) as follows: "An ontology is an explicit specification of a conceptualization", where a conceptualization is an abstract, simplified view of the world that we wish to represent for some purpose. Ontologies can be considered as conceptual schemata, intended to represent knowledge in the most formal and reusable way possible. Formal ontologies are represented in logical formalisms, such as OWL, which allow automatic inferencing over them. An important role of ontologies is to serve as schemata or intelligent views over information resources. Thus they can be used for indexing, querying, and reference purposes over non-ontological datasets and systems, such as databases, document and catalogue management systems. Because ontological languages have a formal semantics, ontologies allow a wider interpretation of data that is inference of facts which are not explicitly stated. In this way, they can improve the interoperability of the conceptualization behind them, their coverage of arbitrary datasets. Ontology can formally be defined as specific sort of knowledge base and can be characterized as comprising a 4-tuple (Davies, Studer et al. 2006):

$$\mathbf{O} = \langle \mathbf{C}, \mathbf{R}, \mathbf{I}, \mathbf{A} \rangle \tag{1}$$

Where C is set of classes representing *concepts* we wish to reason about in the given domain (Offer, Finding, Phone, Customer etc.). R is set of *relations* holding between those classes (Message hasRecipient Actor). I is a set of *instances*, where each instance can be an instance of one or more classes and can be linked to other instances by relations (Nokia isA PhoneBrand; Finding309 hasValue 11,23). A is a set of *axioms* (If a new customer buys Nokia E71, promotional discount of 10% should be offered). It is widely recommended that knowledge bases, containing concrete data (instance data or ABox) are always encoded with respect to ontologies, which encapsulate a general conceptual model of some domain knowledge, thus allowing easier sharing and reuse of KBs.

#### **3. Related work**

54 E-Business – Applications and Global Acceptance

high-level unknown contexts from known contexts, to make decisions and to adapt to the environment, current status, and personal setting of the user. The purpose of this chapter is to present integration of several information resources for Decision Support in Enterprises using agent-oriented approach based on ontologies. The goal of our research is to minimize the gap between business users and agents as special type of application systems that perform tasks in their behalf. The intention was to apply BR approach for ontology manipulation in MAS. Ontology used in our Multi-Agent System for Decision Support in Enterprises (DSS-MAS) was divided into task and domain ontologies while business users were enabled to manipulate them directly in a user friendly environment without