13 Apr 2018


IT diffusion in Nigeria shows that banks have invested more on IT, have more IT personnel, more installed base for PCs, LANs, and WANs and a better linkage to the Internet than other sectors of the Nigerian economy. While most of the banks in the west and other parts of the world have at least one PC per staff.

Information and Communication Technology refers to the convergence of the computer and telecommunication system in a seamless flow of information around the world. The fusion of computer and telecommunication and their uses in obtaining relevant and purposeful management information system is the main thrust of information technology. The focus of ICT is on telecommunication and computerization. It implies the convergence of computing and communication (Telecommunication) technologies and its uses or application for global Internet, Intranet, Extranet, World Wide Web (www), Visual reality, Cyberspace-the New Digital Mentality and Culture (Uwaje, 2000).

Banking in Nigeria has increasingly depended on the deployment of Information Technology. On-line system has facilitated Internet banking in Nigeria as evidenced in some of them launching websites, banks now offer customers the flexibility of operating an account in any branch irrespective of which branch the account is.

Nigeria banks since the 1980s have performed better in their investment profile and use of ICT systems, than the rest of industrial sector of the economy. Distances and geographical locations are no longer barriers to financial transactions. Full online, real-time capabilities have revolutionized electronic transfer of funds. Electronic fund transfer (EFT) is an electronic-oriented payment mechanism. It allows customers’ accounts to be credited electronically within 24 hours.

There is also a second-generation remote service unit that is capable of electronically placing a third party into the customer-financial institution communication link. This is known as POS (Point of Sale terminals). POS terminals handle cheque verifications, credit authorization, cash deposit and withdrawal, and cash payment. This enhances electronic fund transfer at the point of sale (EFTPOS). EFTPOS enables a customer’s account to be debited immediately with the cost of purchase in an outlet such as a supermarket or petrol station. It consists of the accumulation of electronic payment messages by the retailer, which are subsequently passed on to appropriate institutions for processing. The purchase price is debited on the buyer’s account and credited on the seller‘s account. The basic components of every EFTPOS system are Recognition, Authorization, Message-Entry, and Message-Processing. By 1985, many major banks had embraced EFTPOS on line system accepting all types of visa and master card (Patrick 1985).

Plastic cards are also used to identify customers and pass same to machines to initiate a paper or electronic payment. It is a mechanism by which personal customers could interface with the electronic banking industry. Financial institutions issue credit cards in order to provide credit facilities to their customers and debit cards to ease payment system. Credit cards are used as means of borrowing or as a convenient method of payment. Debit Card is a charge card designed as a convenient method of payment in place of cash or cheque. Electronic fund transfer has also been variously designed to ease the international transfer of money.

In conclusion, there is also the international payment system known as SWIFT (Society for Worldwide Inter-bank Financial Telecommunication). SWIFT enables user banks to use electronic mode to transfer international payments, statements, and other banking messages. In Nigeria, first Bank‘s Western Union, Monogram of United Bank for Africa among others perform these international funds transactions.



Article by: Busayo Tomoh

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Hedwig Stene

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Busayo Tomoh

Thank you for this