Abstract:
Using time series data for the period 2006-2013, this study
examined the effect of cashless banking on the profitability of
commercial banks in Nigeria. Data were collected from secondary
sources though annual reports sand statistical bulletin of Central
Bank of Nigeria. The effect of Cashless Banking was measured
using the tool return on equity of commercial banks and A TM, POS
and internet transactions in Nigeria. Return on equity was
regressed on ATM, POS and internet transactions using multiple
regression technique. The study revealed that positive
relationships exist ROE and ATM usages, and also between ROE
and POS usages. On the other hand, there was a negative
relationship between ROE and IT. It was discovered that the
existing business environment in Nigeria poses a challenge to the
smooth running of Cashless Banking. It is therefore recommended
that banks that want to improve their profitability, performance
and efficiency must offer numerous products/services through
mobile phones and the internet in an efficient and cost effective
manner and create awareness of the availability of these services.
They must also make mobile banking application all mobile
phones enabled so that those customers who cannot afford Java
enabled mobile phones can also use the product.
