Digital Payment Channels and Poverty Index: The Nigerian Experience

Abstract

Premised on the postulation that financial development is a sine qua non for economic growth and development, this study aims at examining the relationship between digital payment channels and poverty index in Nigeria. The value of transactions through the ATM, POS, and mobile payment were used to capture digital payment channels in Nigeria, while poverty rate was used to measure the poverty index. Using the Autoregressive Distributed Lag technique on time series data sourced from Central Bank of Nigeria Statistical Bulletin and the National Bureau of Statistics, the results reveal that VTATM and VTPOS related negatively with poverty rate in Nigeria. But VTMP shows positive relationship with poverty rate in Nigeria. Interestingly, value of transactions through the ATM, POS and mobile payments, all show significant relationship with poverty rate in Nigeria. This implies that the adoption and usability of digital payment channels in Nigeria seriously relate with the level of poverty in Nigeria. The study concluded that digital payment channels exert significant relationships with poverty index in Nigeria. The study therefore recommended that the deposit money banks and payment service providers should create enabling environment for effective digital usage in the country. Also, the CBN digital experts should beef up their cyber security policies and strategies in order to curb internet fraud.