Effect of Cashless Payments on the Financial Performance of Supermarkets in Nairobi County

Abstract

Along with popularity of electronic commerce and online purchasing, cashless payment systems have been developed and expected to the main payment means of e-commerce globally.Kenya is still at the inception stage with 27% of the consumer payments being cashless.Despite the benefits associated with electronic money payments, Supermarkets in Nairobi County have generally been slow in adopting the use of cashless payments.Thus, this research intended to investigate the effects of cashless payments on financial performance of supermarkets in Nairobi County.Of specific focus was how financial accessibility, financial innovation, cash handling practices and transaction costs influence financial performance of supermarket in Nairobi County.This study examines the recent trends of effects of cashless payments on the financial performance of supermarkets in Nairobi County for the period January 2015 to December 2017.Taking a descriptive research design, the study accomplishes the objectives by focusing on the finance managers of the supermarkets in Nairobi County.The target population comprised of 147 supermarket branches in Nairobi County.Systematic random sampling was used to calculate a sample size of 66 respondents.Linear regression analysis was used to test the relationship between the independent and the dependent variables.The results of the analysis were presented in form of tables, graphs and charts.From the findings the study concluded that financial accessibility, financial innovations, cash handling practises and transactions costs significantly influences financial performance.From the conclusions the study recommended that there is need for supermarkets in Nairobi County to improve financial accessibility to the various payments platforms and accept the different payment innovations in the market.The study further recommended that supermarkets should reduce transaction costs of payment channels to increase adoption.This will have a positive impact on the financial performance of supermarkets in Nairobi County.

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