The Effect of E-Payments System on the Efficiency of Banks in Nigeria

Itoro Moses Ikoh, Godwin Arome Ocheni and Tamuno-Inam Nicholas Wokoma
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Itoro Moses Ikoh: Department of Banking and Finance University of Uyo, Akwaibom State Nigeria
Godwin Arome Ocheni: Department of Banking and Finance University of Uyo, Akwaibom State Nigeria
Tamuno-Inam Nicholas Wokoma: Department of Accounting, University of Calabar, Cross River State Nigeria

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 8, 810-830

Abstract: This study investigated the effect of e-payments system on the efficiency of banks in Nigeria. The objective of the study was to examine the effect of the variables of e-payments of ATM , POS, WEB applications, Mobile applications and NIBSS instant payments (NIP and the profitability of banks in Nigeria from 2009 to 2021. Ex-post facto research design and quantitative methods were adopted in the study. The data on the variables were collected from the Central Bank of Nigeria (CBN) statistical bulletin of various years. The data was analyzed using multiple regression technique. The findings of the study showed that e-payments through Mobile application (MOB) has high and positive effect on the profitability of banks. The result also revealed that there is a shift toward mobile technology in the Nigerian Banks. This might be influenced by the convenience and accessibility of mobile platforms. The study observed that the growth in the traditional Channels of ATM, POS, and WEB had a slow growth rate, this may be pointing out to cashless policy or that the e-payment variables are being replaced by newer technology (like MOB) and the cashless policy. While the growth in NIP suggests the introduction or increasing popularity of a new service or payment channel in recent years. It also suggests a significant shift towards mobile banking. The findings also revealed that the high rate might correlate with the increasing adoption of smartphones, improvements in mobile payment technologies, and the shift towards digital financial services. While e-payments through POS, WEB and NIP have negative effect on the profitability of banks in Nigeria. It was concluded that e-payments systems has mixed effect on the efficiency of banks in Nigeria. The study recommended that banks should invest more in infrastructures that support e-payments through ATM and mobile applications, and also optimize their roll out and support of the use of POS, WEB applications an NIBSS payments to improve their efficiency.

Date: 2024
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