Analysing and forecasting the diffusion of electronic payments system in Nigeria

Abstract

ABSTRACT The electronic payments system is among recent service innovations that have transformed access to finance in developing and emerging economies. This paper analyses and forecasts the diffusions of four major electronic payment technologies in Nigeria, namely, ATM, PoS, Mobile and Web payments. Diffusion was measured by the volume of financial payments transacted on these technologies. First, we applied two growth models to evaluate the diffusion and to forecast the future trajectories of these payment technologies. Second, we applied the logistics substitution model to evaluate how these technologies compete in the Nigerian payments market. The findings show that like many technological innovations the diffusions of electronic payment technologies are characterised by growth, maturity, saturation, and decline. In addition, the mobile payment system was forecast to emerge as the most diffused payment technology given the volume of financial exchange that will occur on this platform. These findings have implications for innovators, regulators and service providers within the Nigerian payment ecosystems. The findings also have practical implication for achieving the cashless economy and the financial inclusion projects of the Nigerian state which rely on the successful diffusions of these technologies.