THE EFFECT OF PAYMENT SYSTEM ON THE ECONOMIC GROWTH OF NIGERIA

Abstract

This study assessed the effect of Payment System on the economic growth of Nigeria from 2014-2019. The Nigeria payment system has undergone a lot of institutional and regulatory reforms in a bid to place the economy of the country among the top positions in the world. Secondary data was used to in the course of this study as the study utilized the quarterly data of the GDP gotten from the CBN statistical bulletin as the proxy for economic growth while the value of transactions for Cheque, Automated Teller Machine, NIBSS Instant Payment (NIP) and Remita was used as a proxy for the payment system. The study adopted ex-post facto research design, in which time-series data of the payment platform used in the course of the study were gotten from the CBN statistical bulletin and annual reports. The payment platforms employed in the research were; Cheque, Automatic Payment System (ATM), NIBSS Instant Payment (NIP) and Remita payment platform. Analysis of the data was carried out with Regression and ANOVA table test using Statistical Package for Social Sciences (SPSS). Findings from the study revealed that there is a significant relationship between gross domestic product (GDP) and all the four selected payment system (Cheque, ATM, NIP and Remita) transaction value with a p-value of 0.000 respectively. Conclusively, the study posits the payment system has a positive effect on the economic growth of Nigeria. Thus, it was recommended that a nationwide rural enlightenment and awareness program on the use of the various payment system by oneself if the CBN wish to eradicate the patronage of the cash-based system. It is also recommended that there should an upgrade in the security pass required for online transactions to curtail the increase in fraudulent activities popularly known as “Yahoo – Yahoo”.