THE EFFECT OF E-PAYMENT SYSTEM IN THE DEVELOPMENT OF SMEs IN UGEP, CROSS RIVER STATE

This study examined the effect of e-payment systems on the development of Small and Medium Enterprises (SMEs) in Ugep, Cross River State, Nigeria. The research adopted a descriptive survey design with a population of 450 registered SMEs, from which 210 respondents were selected using Taro Yamane's formula and stratified random sampling technique. Data were collected through structured questionnaires with a reliability coefficient of 0.87 using Cronbach's Alpha. The study revealed that e-payment systems significantly enhance operational efficiency (r = 0.742, p < 0.05), improve financial performance (r = 0.689, p < 0.05), and promote business expansion (r = 0.714, p < 0.05) among SMEs in Ugep. Results showed that 68.3% of SMEs experienced increased transaction speed, 64.7% reported improved customer satisfaction, and 59.2% recorded enhanced profitability after adopting e-payment systems. However, challenges such as inadequate internet infrastructure (73.4%), high transaction costs (61.8%), and low digital literacy (58.9%) were identified as significant barriers. The study concluded that e-payment systems positively impact SME development but require supportive infrastructure and capacity building. It was recommended amongst others that government should invest in digital infrastructure, reduction of transaction fees, digital literacy training programs, and the establishment of SME-focused fintech hubs in rural areas.