Digital Payment Option Adoption and Customer Experience Management among SMES in the Retail Sector

Abstract

The global retail sector is characterized by technological innovations and shifting consumer behaviours. The Nigerian retail landscape has been undergoing significant changes marked by the adoption of digital payment options such as automated teller machines (ATMs), point of sale (POS) terminals among others following the global trend but also revealing unique domestic characteristics. While these advancements are transforming the traditional retail paradigms, there remains an empirical void in understanding their direct implications on the customer experience in the Nigerian context. This study aimed to examine the effect of digital payment options adoption on customer experience in the retail sector of Ibadan, Oyo state. The study adopted a descriptive research survey approach, gathering data via questionnaires from a randomised sample (200 respondents) of retailers in Ibadan North-West Local Government, Oyo State. Questionnaires were distributed to retailers that utilise digital payments for their transactions. Results from the study shows the prevalent preference for USSD transactions, chosen by 30% of respondents. This is closely followed by POS transactions at 26.7%, bank app transactions at 22.7%, and ATM transactions accounting for 20.7%. This trajectory denotes a consumer inclination towards instantaneous, non-reliant-on-internet transaction methods like USSD. Quantitative analysis shows a substantial relationship between digital payment integration and enhanced customer experience by 20% (t-20.125, and R2 =0.732, F(6,117) = 404.999). Also, a strong positive relationship was observed between digital solutions and customer experience by 11% (t=11.535, and R2 = 0.675). The study concluded that digital payment options and digital solutions is necessary in elevating the customer experience among SMEs in the retail sector of Nigeria. The study recommended that retailers, especially in emerging markets like Nigeria, invest in and promote diverse digital payment options while ensuring the robustness and user-friendliness of accompanying digital solutions.