Abstract

The relevance of efficient payment systems is a subject of interest to all stakeholders. This study analyzed the challenges to the efficient use of point of sale (POS) terminals in Nigeria. Socio economic characteristics of users and non users were also examined. Cross sectional data were collected from 650 randomly sampled respondents from 20 local government areas of Lagos State, Nigeria. Data collected were analyzed using Friedman and Kendall ranking order test.  The finding of this study showed that that the most challenging factor to the efficient use of POS is network failure, frequent power outage; limited numbers of POS per merchant store where they are available,  security of communication over the network and unavailability of the POS at all merchant stores. Efforts at improving the security of transactions is recommended in order to drastically reduce excess cash flow especially in developing economies.

Key words: Debit cards, payment pattern, point of sale terminal, Nigeria.