Electronic Payment Instruments and Commercial Banks Dynamics: Empirical Evidence from Nigeria
Vol.3 Issue 1
This study examined the effects of electronic payment instruments on commercial banks dynamics in Nigeria. Time series data were sourced from Central Bank of Nigeria Statistical Bulletin, Stock exchange factbook and financial statement of the quoted commercial banks. The study modeled Return on equity and liquidity as the function of automated teller machine, point of sales, mobile payment and electronic fund transfer. Multiple regressions with econometrics view statistical package were used as data analysis techniques. Co-integration, Granger Causality Test and Augmented Unit Root Test were used to determine the long and the short run relationship that exist among the variables. The regression results found that the electronic payment instruments modeled in study explained 68 percent variations on return on equity and 88 percent variations on liquidity of Nigerian commercial banks. Coefficient of the beta found that automated teller machines (ATM), point of sales (POS) and electronic fund transfer (ETF) have positive and significant effects on return on equity while mobile payment (MP) has negative and significant effects on return on equity. The study further revealed that automated teller machines (ATM),point of sales (POS) and electronic fund transfer have negative and significant effects on liquidity of commercial banks in Nigeria while mobile payment (MP) have positive and significant effects on liquidity of commercial banks in Nigeria. The stationarity shows that the variables are stationary at level; the granger causality test shows no causal relationship among the variables while the co-integration test shows at least four co-integrating equations. The study concludes that there is significant relationship between electronic payment instruments on the effectiveness of Nigeria commercial banks operations. The study recommends that Commercial banks in Nigeria should shift their focus to electronic payment and encouraged to continue investing in more modern electronic payment systems. The study calls for the strengthening of commercial banks of Nigeria strategic policies measures to manage the negative side effects of electronic payment system on liquidity and that regulatory cum supervisory authorities should constantly review policies that are related to the promotion and adoption of electronic payment instruments in Nigeria.
Keywords: Electronic Payment Instruments, Dynamics, Commercial Banks, automated teller machines, point of sales and electronic fund transfer.
