IIARD International Institute of Academic Research and Development

JOURNAL OF HUMANITIES AND SOCIAL POLICY (JHSP )

E-ISSN 2545-5729
P-ISSN 2695 2416
VOL. 11 NO. 4 2025
DOI: 10.56201/jhsp.vol.11.no4.2025.pg48.60

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Influence of Digital Payment Systems on Cash Management of Small and Medium Scale Enterprises (Smes) in Nigeria

IHENYEN, Joel Confidence PhD, PEREKEME, Peremobowei Prosper, INAMUNA, Bogofanyo Alfred, RAYMOND, Timilaemi

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Abstract

This study examined the influence of digital payment systems on the cash management practices of Small and Medium Scale Enterprises (SMEs) in Nigeria, with business size considered as a potential moderating variable. The research adopted a descriptive survey design and utilized primary data collected through structured questionnaires administered to 400 SME owners and managers, selected using a multi-stage sampling technique. Data analysis was conducted using descriptive statistics and multiple regression analysis with SPSS. The findings revealed that digital payment systems had a significant positive influence on cash management (? = 0.284, p = 0.000), indicating that increased adoption of platforms such as POS, USSD, and online transfers enhanced transaction tracking, reduced cash handling inefficiencies, and improved overall cash flow management. Additionally, the study found that business size significantly influenced cash management (? = 0.875, p = 0.000), suggesting that larger SMEs were better positioned to leverage digital tools for financial control. The model summary showed an R value of 0.581 and an R² of 0.338, indicating that approximately 33.8% of the variation in cash management was explained by the combined effect of digital payment systems and business size. The ANOVA result further confirmed the model’s significance (F = 84.744, p = 0.000). Based on these results, the study concluded that both digital payment adoption and business growth play critical roles in improving cash management among SMEs in Nigeria. It recommended increased support for digital financial inclusion and capacity-building initiatives to enable SMEs to fully benefit from digital innovations.

keywords:

Digital Payment Systems, Cash Management, Business Size.

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