Digital Payment System and Economic Growth in Nigeria: A Longitudinal Study (2012 – 2024)

Abstract

The increasing adoption of digital payment systems has significantly transformed financial transactions worldwide, including in Nigeria. This study investigates the impact of digital payment platforms—Point-of-Sale (POS) systems, Automated Teller Machines (ATMs), web payments, and mobile payments—on economic growth in Nigeria from 2012 to 2024. Using the Autoregressive Distributed Lag (ARDL) model, the study examines both short-run and long-run relationships between digital payment transactions and real Gross Domestic Product (RGDP). Findings reveal that digital payment systems positively influence economic growth, with mobile payments having the strongest impact. The results suggest that the adoption of cashless payment methods enhances transaction efficiency, improves liquidity, and boosts economic activities. Despite initial challenges such as low financial literacy and infrastructural deficits, digital payments have contributed to the country's financial inclusion and economic expansion. The study recommends national awareness campaigns, financial literacy programs, and improved infrastructure to enhance the efficiency and reliability of digital transactions. The study recommends adoption and efficiency of digital payment systems, public awareness campaigns, government collaboration with financial institutions for training, and improved infrastructure.The study recommends adoption and efficiency of digital payment systems, public awareness campaigns, government collaboration with financial institutions for training, and improved infrastructure.