European Business & Management

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Electronic Payment Systems (E-payments) and Nigeria Economic Growth

Received: 14 October 2019    Accepted: 08 November 2019    Published: 19 November 2019
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Abstract

The electronic payment system is a platform that settles financial transactions between the buyer and seller. Payment systems 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 (2012-2017). 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 probability of (0.06), but its contribution to the real GDP growth is negative (-5.0 percent). This means the ATM based transaction encourages more cash, possessions and may not yield the required goal of low cash based transactions within Nigeria’s banking populace. POS contributes 17 percent growth to the real GDP growth in Nigeria, web based transactions (WBT), contributes 2.3 percent to the real GDP growth, 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 transactions (WBT). POS and WBT have the highest average amongst all other variables. This implies that 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 as 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 on 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.

DOI 10.11648/j.ebm.20190506.11
Published in European Business & Management (Volume 5, Issue 6, November 2019)
Page(s) 68-78
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Electronic Payment System, Interbank, Economic Growth, Point of Sales

References
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[3] Acha, I. A. (2008a). Electronic banking in Nigeria: Concepts, challenges and prospects. International Journal of Development and Management Review, 3 (1): 88–97.
[4] Akhalumeh, P. B., & Ohiokha, F. (2012). Nigeria’s cashless economy: the imperatives. International Journal of Management and Business Studies, 2 (2), 31-36.
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[6] Biagio, B. & Massimo, C. (2001), “The Oversight of the Payments Systems: A Framework for the Development and Governance of Payment Systems in Emerging Economies”, World Bank Report, July 2001.
[7] Central Bank of Nigeria (2015). Payments system transformation: Cash -less Nigeria implementation: 2013.
[8] Claudia, C., & Grauwe, P. (2001). Monetary policy in a cashless society. Brussel CEPR Discussion Study.
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[10] Daily Sun (2017). Daily Sun Newspaper: Nigeria's Internet Users Rise To 91.6m. Daily Sun Pg 2 (Thursday, July 27, 2017).
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[12] Ezeokoli, F. O., Ugochukwu, S. C., Agu, N. N., & Akabogu, S. C. (2016). An assessment of the use, benefits and challenges of the 'cash-lite' policy, for construction projects In Anambra State, Nigeria. European Scientific Journal, 12 (16).
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[16] Muhibudeen, L., & Haladu, A. (2015). The impact of cash less policy tools on money circulating outside Nigerian banks. International Journal of Business, Economics and Law, 8 (3), 47-52.
[17] Obi, V. (2011). Imperatives of advancing cashless Nigeria. Posted online on june 13, 2011 accessed October, 2019.
[18] Omojolaibi, J. A., Mesagan, E. P., & Oladipupo, T. D. (2016). The dynamics of electricity consumption and private investment in Nigeria. Economic Issues Journal Articles, 21 (2), 33-51.
[19] Punch (2012). Cash-less: Banks begin roadshow in Lagos http://www.punchng.com/…/cash-less-banks-begin-roadshow-in…/.
[20] Paschal Okafo (2019). InterSwitch Verve PIN Chip Card ATM Secure e-payment. https://www.naijatechguide.com/2009/04/interswitch-verve-pin-chip-card-atm.html.
[21] Rogers, E. M. (1976). New product adoption and diffusion. Journal of consumer Research, 2 (4), 290-301.
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[23] Summers, B. J. (2012). “Payment Systems-Design, Governance and Oversight,” London: Central Banking Publications.
[24] Shih, Y. Y., & Fang, K. (2004). The use of a decomposed theory of planned behavior to study Internet banking in Taiwan. Internet Research, 14 (3), 213-223.
[25] Tee, H. H., & Ong, H. B. (2016). Cashless payment and economic growth. Financial Innovation, 2 (1), 4.
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Author Information
  • Department of Economics, Caleb University, Imota Lagos State, Nigeria; Center for Petroleum Economics, Energy and Law (CPEEL) University of Ibadan, Oyo State, Nigeria

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  • APA Style

    John Sylvester Afaha. (2019). Electronic Payment Systems (E-payments) and Nigeria Economic Growth. European Business & Management, 5(6), 68-78. https://doi.org/10.11648/j.ebm.20190506.11

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    John Sylvester Afaha. Electronic Payment Systems (E-payments) and Nigeria Economic Growth. Eur. Bus. Manag. 2019, 5(6), 68-78. doi: 10.11648/j.ebm.20190506.11

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    John Sylvester Afaha. Electronic Payment Systems (E-payments) and Nigeria Economic Growth. Eur Bus Manag. 2019;5(6):68-78. doi: 10.11648/j.ebm.20190506.11

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  • @article{10.11648/j.ebm.20190506.11,
      author = {John Sylvester Afaha},
      title = {Electronic Payment Systems (E-payments) and Nigeria Economic Growth},
      journal = {European Business & Management},
      volume = {5},
      number = {6},
      pages = {68-78},
      doi = {10.11648/j.ebm.20190506.11},
      url = {https://doi.org/10.11648/j.ebm.20190506.11},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.ebm.20190506.11},
      abstract = {The electronic payment system is a platform that settles financial transactions between the buyer and seller. Payment systems 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 (2012-2017). 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 probability of (0.06), but its contribution to the real GDP growth is negative (-5.0 percent). This means the ATM based transaction encourages more cash, possessions and may not yield the required goal of low cash based transactions within Nigeria’s banking populace. POS contributes 17 percent growth to the real GDP growth in Nigeria, web based transactions (WBT), contributes 2.3 percent to the real GDP growth, 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 transactions (WBT). POS and WBT have the highest average amongst all other variables. This implies that 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 as 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 on 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.},
     year = {2019}
    }
    

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  • TY  - JOUR
    T1  - Electronic Payment Systems (E-payments) and Nigeria Economic Growth
    AU  - John Sylvester Afaha
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    PY  - 2019
    N1  - https://doi.org/10.11648/j.ebm.20190506.11
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    JF  - European Business & Management
    JO  - European Business & Management
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    AB  - The electronic payment system is a platform that settles financial transactions between the buyer and seller. Payment systems 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 (2012-2017). 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 probability of (0.06), but its contribution to the real GDP growth is negative (-5.0 percent). This means the ATM based transaction encourages more cash, possessions and may not yield the required goal of low cash based transactions within Nigeria’s banking populace. POS contributes 17 percent growth to the real GDP growth in Nigeria, web based transactions (WBT), contributes 2.3 percent to the real GDP growth, 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 transactions (WBT). POS and WBT have the highest average amongst all other variables. This implies that 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 as 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 on 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.
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