Electronic Payment Systems and Money Deposit Banks’ Deposits Mobilisations in Nigeria

Abstract

This study examined the effect of electronic payment systems on money deposits banks’ deposits mobilizations in Nigeria. The study modelled deposits mobilizations of banks in Nigeria as a function of two key variables; money supply (M2) and Remita payment transaction value, with payment transaction values of NIBSS (Nigeria Inter-Bank Settlement System) instant payments (NIP) and National Electronic Fund Transfer (NEFT) as control variables. Secondary data were sourced from Central Bank of Nigeria (CBN) Statistical Bulletin. The study employed ordinary least square (OLS) regression method to analyze the data. Findings from the study revealed that Remita payment transaction value is not good predictor of deposits of banks Nigeria with p-values = 0.3732 >0.05 critical value as it had a negative linear relationship with money deposit banks’ deposits mobilizations. NEFT payment transaction value is not good predictor of deposits of banks Nigeria with p-values = 0.4434 >0.05 critical value as it had a negative linear relationship with money deposits banks’ deposits mobilizations. However both money supply and National Instant Payment (NIP) recorded positive linear relationship with deposits of banks in Nigeria. Furthermore, the findings from the causality test indicated no directional causality between money supply, NEFT, NIP and deposits of banks in Nigeria but causality runs from Remita payment transaction value to deposit of banks in Nigeria. Consequently, the study concluded that, there is no significant linear relationship between electronic payment systems and deposits mobilizations of deposits money banks in Nigeria. Thus, the study recommended that Federal Government of Nigeria as part of her current modifications in monetary and fiscal policies should mandate all states and local governments to adopt Treasury Single Account (TSA) policy and subsequently patronize Remita payment channel as done by the Federal Government of Nigeria.