E-payments adoption and Profitability performance of Deposits Money Banks in Nigeria

ABSTRACT Existing studies observed that commercial banks in Nigeria have adopted one form of e-payments or the other. However the pattern of adoption is yet to be substantiated. Therefore the influence of such adoption on profitability of the adopting banks is worthy of exploration. This study focuses on the impact of four (ATM, POS, web/Internet and mobile) e-payments adoption and banks specific variables on profitability of the Nigerian Deposits Money Banks (DMBs). Secondary data were obtained from annual report and accounts of ten quoted (DMBs) between 2005 and 2012. Data were analysed using panel logistic regression. The overall result from data analysis shows that when bank adopt e-payment systems, their performance level, such as gross margin, profits after tax, return on assets and return on equity changes. This is reflected in the positive association between adoption and gross earning of banks. Further, adoption of the four e-payment instruments like ATM, WEB, POS and Mobile banking influenced performance indices measured by return on assets (ROAE), gross margin and profits after tax (PAT) of the sampled banks. KEYWORDS: E-Payments; Profitability performance; E-Payments Adoption; Deposits Money Banks; Return on Assets Volume & Issue No. = Volume 4, Issue 3, March 2016