An Analysis of Bank-Level Determinants of Electronic Payment Innovations in Nigerian Deposit Money Banks

Abstract

This study investigates the bank-level determinants of electronic payment innovations of Deposit Money Banks (DMBs) in Nigeria. The research follows ex post facto design using a panel of fourteen DMBs from 2012 to 2021. The Difference-Generalized Method of Moment (D-GMM) was utilised in the analysis at 5% level of significance. The results reveal that Bank size, bank age, research and development, capital adequacy ratio, and asset quality consistently and significantly influence the adoption and usage of various payment channels such as ATM banking, mobile banking, internet banking, and POS banking. This implies that electronic payment innovations in Nigeria are influenced by bank size, bank age, research and development (R&D), capital adequacy ratio (CAR), and asset quality (AQ). It is recommended that DMBs prioritise investment in research and development to foster innovation. There is also the need to create a supportive regulatory environment and facilitates collaboration between banks and stakeholders.