Payment System Innovations, Bank Branch Expansion, and Financial Well-Being in Nigeria

Samuel Felix Okereke; Chinedu Callistus Onyia; Shamsuddeen Ibrahim Makudawa

doi:10.59413/eafj/v5.i1.5

Authors

Dr. Samuel Felix Okereke Department of Economics and Development Studies , Federal University Dutsin-Ma Author
Dr. Chinedu Callistus Onyia Department of Banking and Finance , Enugu State University of Science and Technology Author
Shamsuddeen Ibrahim Makudawa Federal University Dutsin-Ma Author

DOI:

https://doi.org/10.59413/eafj/v5.i1.5

Keywords:

E-payments., Bank branch expansion., financial well-being, DOLS

Abstract

With the adoption of technological innovations in bank payment systems, banks and other financial service providers are concentrating on having more customers and improving access to finance, neglecting the customers’ financial well-being. Therefore, this study examined the nexus between payment system innovations and bank branch expansion and their influence on Nigeria’s financial well-being between 2009 and 2024. The study specifically focused on the effect of ATMs, POS, mobile technology, and the number of commercial bank branches on financial well-being as measured using the savings income ratio. Using quarterly data and the dynamic ordinary least square (DOLS) technique for the analysis, the study found that the volume of ATM transactions and bank branch expansion have a significant negative effect on financial well-being in Nigeria. It also revealed that POS and mobile phone transaction volumes are associated with improvement in financial well-being in the country. The study concludes that while the gains of technology and bank infrastructural expansion have enhanced financial access, more needs to be done to improve the country’s financial well-being. Therefore, the study recommends that fintech firms and banks should develop a product that will make low savers easily raise emergency funds with zero charges, rather than concentrating more attention on developing platforms that are increasing customers' loans.

Downloads

Download data is not yet available.

References

Akande, J. O. (2025). Role of financial technology in enhancing savings culture and wealth creation in Nigeria. Malete Journal of Accounting and Finance, 6(1): 106-119.

Ayoade, O. V., Areghan, I. (2025). Nigeria Financial System and Financial Inclusion. African Journal of Accounting and Financial Research 8(2): 55-66. Available at: dOI: 10.52589/AJAFR D0L8HOKS.

Beck, T., Demirgüç-Kunt, A., & Levine, R. (2007). Finance, inequality and the poor. Journal of Economic Growth, 12(1): 27-49.

Brune, L., Karlan, D., & June, R. R. (2020). Measuring financial health around the globe. Center for Innovations on Poverty Action. https://www.poverty-action.org/sites/default/files/publications/IPA%20Financial%20Health%20%20Full%20Report%20Final.pdf.

Central Bank of Nigeria. (2019). Payment system vision 2025. Central Bank of Nigeria.

Central Bank of Nigeria. (2024). Annual statistical bulletin: Payment system statistics 2024. Central Bank of Nigeria, publications.

Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13(3): 319-340.

Ejezube, S. C., Aronu, C. O. & Ugwu, N. D. (2025). Exploring the dynamics of commercial banks expansion, monetary indicators, and economic growth in Nigeria (1981–2021). Journal of Business and Economics in Developing Countries, 3(1): 23-30. Available at: http://doi.org/10.26480/bedc.01.2025.23.30.

Elmi, M. A., & Ngwenyama, O. (2020). Examining the use of electronic money and technology by the diaspora in international remittance system: A case of Somali remittances from Canada. The Electronic Journal of Information Systems in Developing Countries, 86(5):. https://doi.org/10.1002/isd2.12138.

Ibrahim, M. T., & Aliero, H. M. (2022). Banking infrastructure and digital finance adoption in Nigeria. Journal of Financial Innovation, 9(3): 211–230.

Kemboi, J., & Kiprono, S. (2022). Assessing household financial health: Concepts, measures and determinants. Journal of Consumer Finance, 5(1): 102–120.

Kempson, E. (2017). Financial well-being: A conceptual model and empirical evidence. Routledge.

Nyeche, E., Wokekoro, O. E. & Nwankwo, N. U. (2025). Effects of digital financial inclusion on savings in Nigeria. International Journal of Banking and Finance Research, 11(10): 73- 85.

Nwidobie, B. M. (2025). Determinants of bank branch networks in Nigeria: An exploratory analysis. University of Lagos Journal of Business, 11(1): 122-140.

Ogbole, S. A. (2023). Effects of payment systems on domestic household savings in Nigeria. International Journal of Novel Research and Development, 8(5): 50-61.

Onah, K. A., Udefi, G. N., Ojeh, A., & Nkwo, F. N. (2025). Effect of fintech on economic empowerment and financial literacy in rural Nigeria. Global Journal of Artificial Intelligence and Technology Development. 3(2): 26-44.

Onwuemene, J. L., Etim, R. S. & Unirere, P. (2025). Critical analysis of the effect of commercial banks’ branches on return on assets of commercial banks in Nigeria. International Journal of Banking and Finance Research, 11(6): 90-103. Doi: 10.56201/ijbfr.vol.11.no6.2025.pg90.103.

Oyewole, A. S. & Toriola, A. K. (2024). Influence of digital technology on savings and spending behaviour of postgraduate business education students in Southwest Nigeria. Nigerian Journal of Business Education, 11(1): 279-293.

Ozili, P. K. (2018). Impact of digital finance on bank performance and financial stability. Borsa Istanbul Review, 18(4): 329–340. https://doi.org/10.1016/j.bir.2018.05.003

Sen, A. (1985). Development as capability expansion. The Community Development Reader, 41- 58.

Stock, J. H., & Watson, M. W. (1993). A Simple estimator of cointegrating vectors in higher order integrated systems. Econometrica, 61(4):783–820. https://doi.org/10.2307/2951763

Financial Health Network, (2023). Financial Health Report. Financial Health Network. https://finhealthnetwork.org/research/eight-ways-to-measure-financial-health/

World Bank. (2023). Financial consumer protection and digital finance. World Bank publications.

World Bank, (2024, January 18). Digital Transformation Drives Development in Africa. Available at; https://www.worldbank.org/en/results/2024/01/18/digital-transformation-drives-development-in-afe-afw-africa.

Zwingina, C. T., Onoh, U. A. & Chukwu, P. D. E. (2023). Impact of Electronic Payment Systems on Economic Growth of Nigeria. Asian Journal of Economics and Business, 4(1):71-88. Available at: https://doi:10.47509/ajeb.2023.v04i01.05.