Electronic payment system and the growth of small and medium scale enterprises in Nigeria

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Electronic payment system does not mean a total elimination of cash, but financial environment that minimizes the use of physical cash by providing alternative channel for making payment. The objectives of this study include; to identify the challenges those have hindered the adoption of e-payment system by small and medium scale enterprises, to investigate if e-payment system in any way enhanced the growth on small and medium scale business enterprises and finally to determine whether the Small and Medium Scale Enterprises in Idah Federal Constituency of Kogi State, Nigeria possess the requisite facilities and skill for e-payment transactions. The survey was carried out through the administration of questionnaire on owners and operators of small and medium scale businesses in the study area to ascertain whether the small and medium scale enterprises have started utilizing electronic based payment in their day to-day payments and business activities through Point of Sale Terminals (POS). GSM, Mobile Banking, and Automated Teller Machine (ATM) card. Descriptive statistic and t-test method of analysis are used to test the hypothesis. From the result of the study, it was revealed that e-payment system significantly increases growth of SMEs in Idah federal constituency. This signifies that an efficient and modern payment system positively correlated with economic development and it is a key enabler to economic growth. Keywords: Electronic Payment, Growth, SMEs, Nigeria.