ABSTRACT
This study investigates the role of e-payment systems on economic growth in Nigeria
over the period of 2010-2018. Specifically, the study analyses the role of e-payment
systems on economic growth using value of e-payment transactions and volume of epayment
transactions. The study used quarterly time series data for value of POS,
ATM, mobile, Internet transactions and real GDP for model 1 and volume of POS,
ATM, mobile, internet transactions and real GDP for model 2. The multiple
regression analysis, Johansen cointegration test, Granger causality test and Vector
error correction model (VECM) were employed in this study. The results of the
multiple regression analysis for model 1 and 2, shows that ATM and internet
transactions is positive and insignificantly related to economic growth while there is
a negative and insignificant relationship between POS transactions and real GDP in
Nigeria. The result also shows that volume of mobile transactions is positive and
significantly related to economic growth while value of mobile transactions is positive
but insignificantly related to economic growth in Nigeria. The Granger causality test
for model 1 shows the existence of a unidirectional causal relationship between value
of POS, ATM and mobile transactions and real GDP. The granger causality test for
model 2, shows there is a unidirectional causal relationship from volume of POS,
mobile and internet transactions to real GDP. The Johansen cointegration test for
both model 1 and 2, establishes the existence of a long run equilibrium relationship
between e-payment systems and economic growth in Nigeria. The vector error
correction model (VECM) results for model 1 and 2 shows the existence of a short run
relationship between e-payment systems and economic growth in Nigeria. The study
recommends the government invest in communication and internet infrastructure,
internet security as well as awareness campaigns in order to capture a higher
percentage of the population on these e-payment platforms and increase the number
of banked in the population which will boost aggregate consumption, employment,
trade and increase government revenues which would lead to an increase in
economic growth.
