Impact of Electronic Payment Systems on Nigerian Economic Development

Abstract

The study examines the impact of electronic payment Systems on Nigeria development. The electronic payment system is a platform that settles financial transactions between the buyer and seller. Payment system are meant to ease the stress of both parties making an easy exchange or flow of money in a safe and secure environment. This study statistically estimated the relationship between electronic (e-payment) systems and economic growth in Nigeria. Monthly available Data for Nigeria on values of various payments systems were analyzed using Autoregressive Distributed Lagged regression (ARDL) method covering the period of (2009 - 2018). The result indicates a significant positive relationship between the electronic payment system and economic growth in terms of real gross domestic product (GDP) growth. Automated teller machines have a positive significant impact on economic growth, based on a the table of regression showed the Autoregressive Distributed Lag (ADRL) results obtained from the empirical analysis of the relationship between electronics mode of payment and economic growth in Nigeria. The dependent variable used is Real Gross Domestic Product (RGDP), while the independent variables are automated teller machine (ATM), Mobile Payment (MOP), Point of Sale (POS), and Web Payments (WEP). All variables were estimated using their raw state as the use of natural logarithm, run into loss of data for some variable and estimation problem. But INTERBANK transactions, has an insignificant impact on GDP growth while MOP has a negative contribution to the impact on real GDP growth. Point of Sales (POS) transactions is also the most patronized electronic banking tool and this is seen from the descriptive analysis, followed by web base transaction (WBT). POS AND WBT are significantly part of the major determining factors influencing and contributing to the real GDP growth output in Nigeria, while other variables such INTERBANK transactions are although relevant but contributes minimally and drive real GDP output negatively down, as reflected in the results. Since the successful implementation of the e-payment systems which has much to do with internet connectivity and mobile banking, efforts should be made to design or improve the internet security framework to check online fraud. There should be adequate legislation on all aspects of the operations of the e-banking and cashless system so that both the operators of the system and the public can be adequately protected.