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This study was carried out to examine the effects of mobile transaction costs on the financial performance of small and medium enterprises in Jos North Local Government Area of Plateau State. The study adopted the survey research design. The population of the study consisted of which include the customers, retailers, wholesalers and producers who are expected to have heard the knowledge of mobile transaction. The sample of the study consisted of 286 respondents. The sampling technique adopted for the study was Taro Yamen. The instrument for data collection was the questionnaire. The method of data analysis was the mean score while the chi-square was used to test the hypothesis. The findings of the study revealed that people in Jos North are aware of mobile transactions, mobile transactions are rampant in Jos North, furthermore, bad network hampers proper mobile transaction, illiteracy of customers hinders the use of mobile transaction costs, fear of scammers by sellers is a challenge to the use of mobile transaction cost and phobia for technology is a challenge to use of mobile transaction cost. Again, mobile transaction costs is faster in terms of transaction, mobile transaction costs saves time, it is cheaper, transactions of huge amount of money can be carried out without people knowing and it can take place anywhere. in the light of the findings, it was recommended among others that banks should create more awareness on the safety of mobile transaction costs for easier transactions for small and medium entreprises in Jos North, other financial institutions such as Opay, Money Point among others should be encouraged to have mobile transaction costs for effective transactions of small and medium entreprises in Jos North Local Government Area.







Mobile banking differs from mobile payments, which involves the use of a mobile device to pay for goods or services at the point of sale or remotely, analogously to the use of a debit or credit card to effect an EFTPOS payment. The earliest mobile banking services used SMS, a service known as SMS banking. With the introduction of smart phones with WAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers. Mobile banking before 2010 was most often performed via SMS or the mobile web. Apple’s initial success with iPhone and the rapid growth of phones based on Google’s Android (operating system) have led to increasing use of special mobile apps, downloaded to the mobile device. With that said advancements in web technologies such as HTML5, CSS3 and JavaScript have seen more banks launching mobile web based services to complement native applications. These applications are consisted of a web application module in JSP such as J2EE and functions of another. Mapa (2012) suggested that over a third of banks have mobile device detection upon visiting the banks’ main website around the year 2012. A number of things can happen on mobile detection such as redirecting to an app store, redirection to a mobile banking specific website or providing a menu of mobile banking options for the user to choose from. Mobile transaction services offers secure and convenient means for banked and unbanked people to send and receive money with mobile phones at home and abroad; anywhere at any time. It contains features such as mobile wallet, mobile transfer, airtime transfers and mobile banking. Mobile wallet enables the subscriber to receive, store, send or pay money anywhere any time. Money transfer options means that one can send money from their mobile transaction account to a different subscriber anywhere anytime, which is similar to airtime transfer, where one can purchase and send airtime to another subscriber within the same network. Mobile banking works closely with banks to provide banking services to subscribers of mobile transaction.

Mobile transaction, also referred to as mobile payment, mobile money transfer, and mobile wallet, generally refers to services operated and performed from a mobile device such as mobile phone, credit or debit cards. It is further clarified as the intersection of both banking and telecommunications services (World Bank, 2010). It involves a diverse set of stakeholders from both mobile phone operators and financial service institutions. Mobile transaction services have been defined as electronic money accounts that can be accessed via mobile phone (Zutt, 2010).

Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a Smartphone or tablet. Unlike the related internet banking it uses software, usually called an app, provided by the financial institution for the purpose. Mobile banking is usually available on a 24-hour basis. Some financial institutions have restrictions on which accounts may be accessed through mobile banking, as well as a limit on the amount that can be transacted. Mobile banking is dependent on the availability of an internet or data connection to the mobile device.

Transactions through mobile banking depend on the features of the mobile banking app provided and typically includes obtaining account balances and lists of latest transactions, electronic bill payments, remote check deposits, P2P payments, and funds transfers between a customer’s or another’s accounts. Some apps also enable copies of statements to be downloaded and sometimes printed at the customer’s premises. Using a mobile banking app increases ease of use, speed, flexibility and also improves security because it integrates with the user built-in mobile device security mechanisms. From the bank’s point of view, mobile banking reduces the cost of handling transactions by reducing the need for customers to visit a bank branch for non-cash withdrawal and deposit transactions. Mobile banking does not handle transactions involving cash, and a customer needs to visit an ATM or bank branch for cash withdrawals or deposits. Many apps now have a remote deposit option; using the device’s camera to digitally transmit cheques to their financial institution.

Use of mobile phone for financial transaction started with introduction of prepaid mobile phone services that targeted low income earners who desired more anonymity than post-paid phone subscribers. Unlike post-paid mobile phone services, prepaid subscribers could simply walk to a shop, purchase small denomination airtime, key in the details and make their desired call. This segment of mobile phone users soon became large enough to be a target for micro-payment features since majority had little or absolutely no interaction with banks. The main reason this segment came into focus and the need to develop financial services that target them was outlined by Wishart (2006) as part of the drive towards a cashless transaction environment that presents advantages such as: reduction of fraud, reduction of untraceable criminal activities, reduction of cash handling costs, and less reliance on cash-in-hand when a need arose.

Must and Ludewig (2010) trace the rise of mobile transaction to the rapid and worldwide penetration of mobile phones back to 1999. However, mobile phone enabled commerce (m-commerce) or services may have started as early as 1997 when mobile phone enabled Coco Cola vending machines and mobile phone banking services were introduced in Finland. Earlier documented mobile commercial services include a Philippine mobile operator’s launch of SMART money in 1999. By the year 2000, mobile transaction technology had started to spread to include several other countries like Nigeria. Since 2007, mobile transaction usage has grown rapidly.  While initially mobile transaction services were publicized as money transfer service, Hughes and Lonie (2007) proposed that services such as bill payment, salary payment and local and international remittances could be included in mobile transaction. When literature was reviewed in 2012, all these services had been realized and surpassed. These added features and services are viewed by financial analyst as providing banking services to the unbanked. Through the pay bill features available through mobile transaction services it is now possible to pay for electricity and water, digital television, parking fees and several other services. This is a rising trend among many consumers especially those in urban settings. The use of mobile transaction to pay bills is chiefly among wealthier, urban customers (Zutt, 2010).

The types of financial services provided through mobile transaction have been grouped by World Bank (2012) into mobile finance, mobile banking and mobile payments. Mobile finance includes credit, insurance and savings services. Mobile banking can be transactional or informational. Mobile payments range from payment made from person-to-person, government-to-person, and business-to-business. These types of financial services have traditionally belonged to commercial banks or microfinance institutions.

SMEs have been clearly identified and appreciated as drivers of economic activity in Nigeria and the world. Their growth generates increased employment opportunities, wages, goods and services and increased resources that contribute to increased tax revenues. It is generally recognized that SMEs face various challenges which affect their growth and profitability and hence, diminish their ability to contribute effectively to sustainable business growth. Some of these challenges include but are not limited to lack of managerial skills, highly competitive environment, poor debt collection (Bowen, Morara & Mureithi 2009), technological changes, regulatory challenges, lack of affordable credit and financial services to facilitate business transactions and business growth. For example, customer and market paired with resources and finance played an important role in ensuring the SMEs business success according to the study findings by Islam, Keauchana, and Yusuf (2010). Equipping entrepreneurs with technical and business skills, friendly investment climate and implementation of sound SMEs policies are some of the areas that can be advocated for to support SMEs in Plateau State. As outlined by World Bank (2012), mobile transaction services are often linked to financial inclusion and therefore applications extend financial services to the unbanked or those preferring cheaper financial services. For example a service like M-Pesa is considered one third to one half as expensive as alternative systems (World Bank 2012).

The range of services the SMEs could benefit from using mobile transaction technology include mobile transaction transfers, mobile ATMs, mobile ticketing, mobile vouchers, loyalties and coupons, content purchases and deliveries, information services, mobile banking, mobile purchases, and mobile marketing and advertising.

1.2 Statement of the Problem

Mobile transaction service, designed to help microfinance institutions streamline their operations (Omwansa 2009), has received overwhelming uptake in Plateau State since its introduction in 2007. This success is attributed to the service being affordable and accessible (Mbogo 2010) including low income earners. The technological invention is considered easy to use yet efficient and reliable with the potential to extend financial services to the unbanked or those preferring cheaper financial services. It is an appropriate technological invention for SMEs that continue to face challenges related to limited affordable and accessible financial services to support business operations.

SMEs needs for payment and transactional services are not always well served by conventional banks since they do not always find it easy or cost effective to adopt a full-feature package for banking services (Higgins, Kendall & Lyon, 2012). Mobile transaction can be used to raise efficiency and boost business growth through cheap, efficient and reliable money service support systems that reduce the need for cash transaction and the risks associated.

Literature reveals that the mobile transaction is faster, cheaper, more reliable, and safer (Jack & Suri 2011). The benefits of cashless transaction including less opportunity for fraudulent and criminal activities, and mobile transaction technology (Wishart 2006) have increased adoption rates among SMEs in the capital city (Mbogo 2010). The main literature gaps exist in revealing whether mobile transaction technology has contributed to SMEs performance through increased sales, increased profits, loans accessibility and savings and if this is limited in geography. SMEs however have to contend with current mobile transaction challenges which include inability to offer interests on savings, possibility of fraud and need for accessible cash tellers or agents. Additionally, SMEs might not be comfortable with mobile transaction security features due to cell phones being prone to theft.


The general objective of the study was to determine the effects of mobile transaction costs on SMEs in Plateau State in supporting business operations like sales, purchases, savings and accessing loans.

The specific objectives are:

  1. To determine the extent to which the people of Jos North are aware of mobile transaction costs.
  2. To examine the challenges of mobile transaction costs in Jos North Local Government Area.
  3. To find out the effects of mobile transaction costs on the performance of small and medium entreprises in Jos North Local Government.


            The following research questions were raised:

  1. To what extent are the people of Plateau State aware of mobile transactions?
  2. What are the challenges of mobile transaction cost in Jos North Local government Area?
  3. What are the effects of mobile transaction costs on the performance of Small and Medium Enterprises in Jos North Local government Area?



The following null hypotheses have been postulated:

H0: there is no significant relationship between mobile transaction costs and SMEs performance in Plateau State


The researcher is aware of other problematic areas lingering around small and medium entreprises. However, for the purpose of this research, this stud shall cover effects of mobile transaction costs on the financial performance of small and medium enterprises. The study shall be restricted to selected small and medium enterprises in Jos North Local Government Area of Plateau State. Furthermore, despite the fact that the study is restricted to selected small and medium enterprises in the selected local government, the findings will be generalized to other parts of the state and country at large.


It is important to ascertain the effects of mobile transaction costs on SMEs in Plateau State and the nature of burden incurred in the course of the transactions, and their contribution to the SME industry in Plateau State. The following institutions benefits from the study

  1. Businesses: the businesses will use the data to determine their level of cost incurred of mobile transaction cost
  2. Public: the public will derive much benefit from the study, because it will create awareness to those who are not aware of the mobile transaction and will enlighten them on the use of mobile transfer.
  3. The school and students: the study is going to be of immense benefit to schools and students; it will serve as a future reference point for future researchers who will want to research more on the topic.
  4. Banks: the study will help generate revenue to the banks as the study aims at creating awareness and enlightening the public (SMEs) on the use of mobile transaction to ease their transaction.


Commercial banks: used according to the common usage of banks to mean institutions in Nigeria that provides financial services, such as accepting deposits, giving business loans, mortgage lending, and basic investment products like savings accounts as defined in the Banking Act of Nigeria.

Mobile transactions: refers to use of mobile phones (mobile phone money services) to conduct financial transactions such as sending and receiving money, paying for goods or services, purchasing airtime, remittances, accessing bank accounts to make deposits or withdrawals, viewing financial statements for bank accounts and/or mobile money and any other closely related service. It is therefore related to a combination of mobile telephones and financial services as adopted by World Bank (2010) to conduct financial transactions as outlined above.

Mobile Commerce (m-Commerce): is limited to the use of mobile money functions available to purchase or sell goods in SMEs business transactions. This concept has been applied according to the definition by Must & Ludewig (2010).

Small and Medium Enterprises (SMEs): are defined according to their staff headcount – often taken to be less than 100 members -) since that information is readily available. This, therefore, refers to the literal definition of SMEs according Waweru (2007) that incorporates micro, small and medium enterprises.

SMEs Performance: In this study, SMEs performance will be used to refer to sales, business transactional activities that reflect on sales like purchases through mobile money services, and accessibility of financial services like savings and micro-credits (loans).

Transaction Costs: these are charges placed on transactions.

  • Format: ms-word (doc)
  • Chapter 1 to 5
  • With abstract reference and questionnaire
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Bank Name: United Bank of Africa (UBA)
Account Name: chianen kenter
Account Number: 2056899630
Account Type: savings
Amount: ₦3000