Open Access Journal Article

Electronic Payments System and Banking Industry’s Return in Nigeria: A Time-Varying Granger Causality Approach

by Abubakar Sani Ibrahim a,b,* John Olu-Coris Aiyedogbon a  and  Obumneke Ezie a
Bingham University, Karu, Nigeria
Central Bank of Nigeria, Abuja, Nigeria
Author to whom correspondence should be addressed.
FEL  2024, 29; 3(2), 29;
Received: 30 March 2024 / Accepted: 8 May 2024 / Published Online: 9 July 2024


The paper is motivated by the growth of the electronic payments system and its relevance in enhancing the banking industry's earnings. Consequently, the paper examines the causal relationship between the electronic payments system and the banking industry's returns in Nigeria. The paper offers some important contributions to the literature involving the use of an approach that allows for data-driven identification of the change points in the electronic payments system and the banking industry's returns nexus. The paper discovered three important findings. First, the causal relationship between the electronic payments system and the banking industry's returns in Nigeria changes with time changes. Second, there is evidence of causality between the electronic payments system and returns on assets and equity, however, the causality was more evident under the recursive window. Third, the causal relationship was more evident in some specific periods such as 2020Q4, all quarters of 2015 to 2016, and 2020 to the end of 2023. The paper recommends that policymakers should revisit and reinvigorate the specific cashless policies instituted in 2012-2016 that aided higher returns to the banking industry. Similarly, the Central Bank of Nigeria and other banking industry players should intensify efforts to encourage the use of electronic payments due to their usefulness and ability to enhance the banking industry's earnings.

Copyright: © 2024 by Ibrahim, Aiyedogbon and Ezie. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

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ACS Style
Ibrahim, A. S.; Aiyedogbon, J. O.; Ezie, O. Electronic Payments System and Banking Industry’s Return in Nigeria: A Time-Varying Granger Causality Approach. Financial Economics Letters, 2024, 3, 29.
AMA Style
Ibrahim A S, Aiyedogbon J O, Ezie O. Electronic Payments System and Banking Industry’s Return in Nigeria: A Time-Varying Granger Causality Approach. Financial Economics Letters; 2024, 3(2):29.
Chicago/Turabian Style
Ibrahim, Abubakar S.; Aiyedogbon, John O.; Ezie, Obumneke 2024. "Electronic Payments System and Banking Industry’s Return in Nigeria: A Time-Varying Granger Causality Approach" Financial Economics Letters 3, no.2:29.
APA style
Ibrahim, A. S., Aiyedogbon, J. O., & Ezie, O. (2024). Electronic Payments System and Banking Industry’s Return in Nigeria: A Time-Varying Granger Causality Approach. Financial Economics Letters, 3(2), 29.

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