Impact of digital payment adoption on cashless policy effectiveness in Nigeria

Abstract

This study examined the Impact of Digital Payment Adoption on Cashless Policy Effectiveness in Nigeria between the year 2009 and 2023. The purpose of the particular objectives was to determine the impact of the following on cheque transactions of Nigeria; Point of Sale (POS) transactions, mobile payments, web payment, Automated Teller Machines (ATM), money supply, and Real Gross Domestic Product (RGDP). The research design was ex-post facto and secondary data was used, which was retrieved in the Central Bank of Nigeria (CBN) Statistical Bulletin. The data were examined through descriptive statistics, correlation test, and Ordinary Least Squares (OLS) regression technique with the assistance of the E-Views software. The findings have shown that both POS and ATM transactions have a negative impact on the usage of cheques, which means that the growth of the digital payment system leads to a decrease in cheque transactions. Mobile and web payments on the other hand have positive but not significant effects which means that there is little replacement of cheques payment. The impacts of money supply and RGDP on cheque transactions were positive; this indicates that some cheques are effective in the economic activities. The paper ends with a conclusion that the success of Nigeria cashless policy can be supported by the introduction of digital payments. It suggests that the government and financial institutions should intensify digital payment infrastructure, increase awareness among people, and put in place policies that would encourage more people to adopt electronic payment systems in all sectors of the economy.