Impact of Cashless Banking on Banks’ Profitability (Evidence from Nigeria)
Abstract
The quest for global relevance and sustainable development had led to wide exploitation of the benefits of cashless banking in payments system of Nigerian banks. The study examines the impact of cashless banking on the profitability of banks in Nigeria. The study used proxies for cashless banking such as Automated teller machine (ATM), Point of sale (POS), and web based transaction (WBT) to examine its impact on the aggregate return on equity (ROE) of deposit money banks in Nigeria, through an ordinary least square (OLS) multiple regression method of analysis. The result showed that ATM and POS are positively related to ROE, while WBT related negatively to ROE. This is as a result of high rates of bank charges on online deposits and as a result, most customers do not patronize the product. Non-usage of the WBT for online deposits had created a negative impact on profitability of Nigerian banks. Recommendations were made among which are that banks should provide a sufficient standby generators that could be used in case of electricity failure, provide adequate ICT infrastructure and management framework, and enlighten the public on the importance of using ICT banking products.
Submission of an article implies that the work described has not been published previously (except in the form of an abstract or as part of a published lecture or academic thesis), that it is not under consideration for publication elsewhere, that its publication is approved by all authors and tacitly or explicitly by the responsible authorities where the work was carried out, and that, if accepted, will not be published elsewhere in the same form, in English or in any other language, without the written consent of the Publisher. The Editors reserve the right to edit or otherwise alter all contributions, but authors will receive proofs for approval before publication.
Copyrights for articles published in MTI journals are retained by the authors, with first publication rights granted to the journal. The journal/publisher is not responsible for subsequent uses of the work. It is the author's responsibility to bring an infringement action if so desired by the author.
