Abstract

‘Mobile Payments’ is not only for academics, innovators and managers but for every household in the communities. Mobile payment services have reached a high point in the developing economies in a brief period because of favourable circumstances such as very few bankers who have more mobile telephone penetration.

The main aim of this research is to investigate the effect of mobile payment systems on the growth of the economy of Cameroon. Specifically, the study seeks to examine the effect of mobile payment systems on the security of business transaction in Cameroon, to assess the effect of mobile payment systems on the speed of business transactions in Cameroon, to investigate the effect of mobile payment systems on the convenience of business transactions in Cameroon, to examine the effect of Mobile payment systems on technological advancement in Cameroon and finally to investigate the challenges faced in using mobile payment systems in Cameroon.

The research was structured to be both exploratory and descriptive. Data was collected using questionnaires and a sample of 400 respondents was used. data were analysed using tables and charts via the help of SPSS software.

Findings showed that Mobile payment systems have facilitated business transactions and improved customer experiences which in the long run will lead to growth in the economy of the country. Mobile payment systems are more secured, fast and convenient in business transactions. Also, mobile payment systems have led to the development of technology in the country to facilitate business transactions.

CHAPTER ONE

GENERAL INTRODUCTION

Background to the study

In recent years, the growth for the need for Information and Communication Technology (ICT) has become enormous and it is predicted that the growth will be multiplied to multi-folds in the future years to come (Juniper Research, 2008). The usage of the mobile phone is considered to be one such growth in the domain of ICT.

These factors coupled with exploitation in the e-commerce industry and growing m-commerce for consumer’s better and quick access has resulted in a new technological advancement, called the Mobile industry (Paavilainen, 2002).

The mobile phone which was previously used for making phone calls and sending a text message has evolved so fast that it is right now being used as a mini-computer for performing various day to day life activities like making video conference calls, reading eBooks, listening to music, playing games and also to do online purchases (Grief &Werner, 2007). This is the birth of Mobile Payments.

The mobile payment system in developing and developed nations is different as the economic standards of the people are completely different. The European market is considered to be one of the most advanced ones concerning technology, socio-economic conditions of the people etc. This market is already on the verge of developing the next generation of mobile payments called Contactless Mobile Payments (CMP).

This contactless payment is made by using NFC based technology where the consumers have to just swipe the NFC enabled phone near the NFC enabled Point of Sale (PoS) terminal (Juniper Research, 2011). But the scenarios present in the non-European market such as South-East Asia, Africa, and North-East Asia etc. is different where they have a developing economy with poor banking facilities. So, mobile payment systems present in these countries are different in which the main focus of these markets is to cover the unbanked population by providing banking facilities through mobile devices.

A basic mobile phone is used to do their payment for meeting up their daily requirements. It has to be noted that developing countries are considered for Non-European markets, as they have a huge success story in mobile-based payments. Even though the European market is mature, mobile payment is not as common as it is in non-European markets. There is still a million-dollar question that academics, technocrats, and all players interested in mobile payment have been asking for a long time.

In recent years, cell phones have been on the verge of displacing wallets, ushering in the idea of mobile wallets, in which all payments for purchases, online ticketing, online shopping, point-of-sale purchases, and person-to-person money transfers are made through their phones. Mobile Payment is considered the future business model because it reduces the time factor by eliminating the need for people to wait in long lines to pay their bills (Hu/Lee/Kou, 2005).

It has also improved user protection by removing the need for people to bring cash with them all of the time. The consumer may buy their product from the comfort of their own home. A concrete business model cantered on customer behaviour is needed to introduce an effective mobile payment system. It is believed that the progress of the mobile payment industry depends not only on the good technology that has been developed but also on the cooperation of various stakeholders in the same field to further the industry’s development (Birgersson & Eriksson, 2011).

Due to inefficient business models and a lack of standardization, many creative start-up mobile payment models have failed during the development process (Carat, 2002). Mobile payments have only been successful in a few countries so far. The use of mobile payments differs significantly between developed and developing countries.

In most developed countries, such as the United Kingdom and France, the majority of mobile payments are made using Near Field Communication (NFC)-based technology, which necessitates the use of NFC-enabled phones (NFC, 2012). In developing countries such as Kenya, the Philippines, and others, a simple cell phone is sufficient for conducting business. This wide disparity in variation is primarily due to the financial and technical changes that these countries have experienced.

Despite the prevalence of the digital divide and threats to online freedom of speech, Cameroon’s information and communications technology (ICT) sector has progressed significantly since 2010. The launch of the National ICT Strategic Plan 2020 in May 2016, which recognized the digital economy as a catalyst for growth, improved the country’s digital landscape.

Increased investments in telecommunications and ICT infrastructure have been registered, including the expansion of the national optical fibre backbone to approximately 12,000 kilometres, linking 209 of the country’s 360 sub-divisions and neighbouring countries such as Chad, Gabon, Equatorial Guinea, the Central African Republic, and Nigeria (Toussi, 2019)

According to the Ministry of Posts and Telecommunications, cell phone subscribers totalled 18.8 million in 2018, reflecting an 83 percent penetration rate, while internet penetration was 35 percent. MTN, Orange, Viettel, and the state-owned CAMTEL are Cameroon’s four major telecommunications service providers. MTN is the leading service provider, with 48 percent of the mobile market share and 8.7 million subscribers, according to its first-quarter report.

Cameroon has made progress in terms of ICT production and affordability over the years. For example, the International Telecommunications Union’s (ITU) ICT Development Index (IDI) increased from 1.54 in 2010 to 2.38 in 2017 – compared to Iceland’s highest global value of 8.98 and Mauritius’ highest African value of 5.88 and Eritrea’s lowest 0.96.

Cameroon was ranked 149th out of 176 countries evaluated, with more than two-dozen African countries ranking higher. Cameroon’s internet affordability score has also increased marginally, now ranking 50 out of 60 nations, up from 53 in 2015. This still makes internet access in Cameroon among the most expensive of the countries surveyed.

1.2 Problem Statement

Businesses make a major contribution to the economy’s development. As companies’ profitability rises, there is a greater likelihood of expansion and, as a result, an improvement in the economy’s overall growth. Today in Cameroon, there is a serious problem affecting small businesses, and that problem is the lack of cash to conduct small monetary transactions.

Customers who have made a transaction do not always have cash on hand, and businesses and institutions do not always have cash on hand to offer balances to them. Because they fail to have balances after a financial transaction, taxi drivers, convenience stores, and other businesses lose customers. These problem has caused a slow growth of these businesses and hence a slow growth of the overall economy.

‘Mobile Payments’ is a new technological mantra that applies to not only academics, innovators, and CEOs, but also every household on the planet. Mobile payment systems are about to take a huge step toward a cashless society. Many business transactions have become possible since the introduction of mobile payment systems such as mobile money, as long as all parties have a mobile money account. Simple business transactions have fueled a portion of the expansion.

As a result, this study aims to determine the impact of mobile payment systems on Cameroon’s economic development. For a better understanding of this study, the study has to provide answers to the following questions.

Research questions

Main research question

The main research question for his study is;

What is the effect of mobile payment systems on the growth of the economy of Cameroon?

Specifically, the study seeks to;

1. What is the effect of mobile payment systems on the security of business transaction in Cameroon?
2. What is the effect of mobile payment systems on the speed of business transactions in Cameroon?
3. What is the effect of mobile payment systems on the convenience of business transactions in Cameroon?
4. What is the effect of Mobile Payment systems on technological advancement in Cameroon?
5. What are the challenges faced with using mobile payment systems in Cameroon?

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