E-Payment Application Systems in Rural Areas: Driving Financial Inclusion and Economic Growth in Nigeria

Abstract

ABSTRACT: This research investigates the role of digital payment platforms in enhancing financial access and stimulating socioeconomic progress in Nigeria's rural communities. The study employs annual time-series data spanning 14 years (2011–2024), sourced from the Central Bank of Nigeria (CBN) statistical publications. Key variables analyzed include real gross domestic product (RGDP) as the dependent variable, and transaction volumes from Automated Teller Machines (ATM), Point of Sale (POS) terminals, and Internet Banking (INB) as independent variables. Data were analyzed using E-views 9 software with ordinary least squares (OLS) regression. The results indicate that ATM and POS transactions have a statistically significant and positive influence on economic growth. In contrast, Internet Banking exhibited a negative relationship with RGDP growth over the study period. The model demonstrated a strong fit, with an R-squared value of 0.949. It is concluded that digital payment mechanisms, particularly ATM and POS services, contribute meaningfully to economic development. To maximize benefits, financial institutions should identify and resolve obstacles to digital channel adoption in rural regions. Additionally, expanding and optimizing digital infrastructure is recommended to improve service efficiency and accessibility.