Effect of Payments System Innovations on the Financial Performance of Commercial Banks in Nigeria

Abstract

The study examines the effect of payments system innovations on the performance of commercial banks in Nigeria, Ex post factor research design was adopted for the study. The population of the study comprises all the banks operating in Nigeria. Data were collected from the economic reports and statistical bulletin of central bank of Nigeria. The Auto-Regressive Distributed Lags (ARDL) bounds approach to co-integration was adopted on quarterly time-series data from Q1 2007 to Q4 2020 to test the causal relationship between payments system innovations and financial performance of commercial banks in Nigeria. The results indicated that mobile payment, POS transactions and internet payment have positive and significant impact on return on assets of commercial banks in Nigeria, while RTGS has negative impact on the return of assets. The results of the study will fill the knowledge gap and will benefit both regulators and operators in making decision-making process and development of new policies that will aid the promotion of innovative products for safe reliable, and credible payments system and in identify payments system technology, projects and initiatives that are significantly viable, respectively. The study recommends the need for the commercial banks in Nigeria to undertake massive mass media enlightenment campaigns on all payments system innovations/initiatives.