Effects of Payment Technologies on the Transaction Demand for Cash Among Urban Households in Zamfara State, Nigeria

This paper examines the effect of the use of the various payment channels on the amount of cash held for transactions among urban households in Zamfara state, Nigeria. Using a sample of 300 respondents purposely selected using the non-probability sampling technique of purposive sampling and structured questionnaire used to solicit information from the chosen respondents and the data analysed with the use of multinomial logistic regression analysis techniques. The study finds that the demand for cash for transaction function purpose has very much decreased with the use of variety of payments channels to the households. The significant factors were found to be age, sex, occupation as well as the frequency in the use of the debit cards from 1- 14 days. The demand for cash moderately increased in response to the significant determinants of demand for cash as the frequency of the use of the debit cards between 1-14 days as well as the possession and use of mobile phone for transaction purpose. In comparison to the reference category, the demand for cash, moderately reduced in relation to the possession of debit cards, mobile phones for transaction purposes as well as the frequency in the use of the debit cards between 1-14days are the key determinants of the demand for cash and are all found to have a significant negative relationship with the demand for cash. The study recommends further mobilization of the people of the state on the need to make use of the payments technologies in carrying out their daily transactions which could reduce the cost of printing currency in the country and reduce the risks associated with the cost of handling cash.