









































Pa
ge

 
1



Pa
ge

 
35

American Journal of  Financial 
Technology and Innovation (AJFTI)

Financial Technology and Economic Growth in Nigeria: 2012Q1-2022Q4 
Obumneke Ezie1*, Jonathan Oniore1, Princewill Chisom Ajaegbu1

Volume 1 Issue 1, Year 2023
https://journals.e-palli.com/home/index.php/ajfti

Article Information ABSTRACT

Received: November 25, 2023

Accepted: December 23, 2023

Published: December 26, 2023

In the recent decade, the surge in financial technology (fintech) has dramatically reshaped 
the financial landscape of  many countries, including Nigeria. However, despite these 
developments, the economy continues to slide in a state of  decline. The primary objective of  
this study was to investigate the impact of  financial technology on Nigeria’s economic growth 
spanning 2012Q1 to 2022Q4. Using the Fully Modified Ordinary Least Squares (FMOLS) 
technique, the research focused on three aspects of  fintech: Internet (Web) Transactions, 
Mobile Payment Transactions, and Instant Pay Transactions. The findings were enlightening. 
Web-based transactions showed a significant enhancement in Nigeria’s economic growth. 
These transactions not only simplified banking processes but also bolstered economic 
activities, making financial services more accessible to a wider demographic. In addition, 
Mobile Payment Transactions significantly impacted economic growth, acting as catalysts 
in spurring both urban and rural economic activities and inclusivity. On the other hand, 
Instant Pay Transactions displayed a rather unexpected negative impact on economic growth 
within the study period. While they augmented financial fluidity, they exhibited a negative, 
yet statistically significant, impact on overall economic growth. Drawing from these insights, 
specific recommendations were provided. For Web transactions, the paramount focus was 
suggested on fortifying the digital infrastructure and enhancing cybersecurity measures. This 
twofold approach would foster growth and shield the burgeoning digital economy from 
cyber threats. With their transformative essence, Mobile Transactions necessitated a dual 
strategy: expanding mobile connectivity, especially in underserved areas, and intensifying 
user education on safe mobile transactional practices. Given its negative relationship 
with economic growth, Instant Pay Transactions required a more proactive approach. 
An exhaustive infrastructure audit was advocated to expose any underlying inefficiencies. 
Simultaneously, a call for more stringent regulatory oversight on Instant Pay Transactions 
was made to align it more harmoniously with the nation’s broader economic objectives

Keywords
Internet (Web) Transactions, 
Mobile Payment Transactions, 
Instant Pay Transactions, 
FMOLS, Economic Growth,
JEL Codes L86, G23, G22 
and O42

INTRODUCTION
Financial Technology, popularly known as FinTech, 
refers to integrating technology into financial services 
to enhance their delivery, reduce costs, and create new 
business models. From peer-to-peer lending platforms 
to digital-only banks, FinTech innovations have 
revolutionized the way people interact with their finances 
globally. According to McKinsey & Company (2018), 
FinTech investments reached $111 billion globally, a 
testament to its rapid ascent. Its significance lies not 
only in the volumes but in its potential to democratize 
access to financial services, especially in regions where 
traditional banking has been out of  reach for many.
Originally serving as software support systems for 
traditional banking institutions, FinTech has transformed 
into a robust industry, offering a wide range of  financial 
services, from peer-to-peer lending platforms to 
automated wealth management solutions (Schueffel, 
2017). With the global transaction value of  digital 
payments projected to exceed $6.6 trillion in 2021 
(Statista, 2021), Instant Pay Transactions have become 
a central feature in the FinTech landscape. This mode 
of  payment assures real-time transfers and minimizes 
transaction costs, augmenting economic efficiency. When 
leveraged adequately, such transactions can expedite the 

velocity of  money, enhancing economic activity. At its 
core, FinTech encompasses a broad range of  financial 
operations, including Instant Pay Transactions, Internet 
(Web) Transactions, and Mobile Payment Transactions.
Instant Pay Transactions have surged in Nigeria. Per the 
Nigerian Inter-Bank Settlement System (NIBSS), these 
transactions rose from just a few million in 2012 to over 
1.5 billion transactions worth 83.89 trillion Naira in 
2019, indicating increasing adoption (NIBSS, 2020). This 
drastic shift signifies the growing acceptance of  FinTech 
and points to its positive impact on economic growth by 
increasing transaction velocity and facilitating commerce.
Equally transformative is the rise of  Internet (Web) 
Transactions. E-commerce platforms like Jumia and 
Konga, supported by secure web transaction systems, 
have seen exponential growth. According to Statista 
(2020), the Nigerian e-commerce market was valued 
at over $12 billion in 2019, with projections of  further 
significant growth, all enabled by the robust web 
transaction infrastructure underpinning the FinTech 
ecosystem.
Mobile Payment Transactions in Nigeria present another 
intriguing case study. With the proliferation of  mobile 
phones, over 100 million Nigerians can access mobile 
services (Nigerian Communications Commission, 2020). 

1 Department of  Economics, Bingham University, Karu, Nasarawa State, Nigeria
* Corresponding author’s e-mail: eobumneke@yahoo.com



Pa
ge

 
36

https://journals.e-palli.com/home/index.php/ajfti

Am. J. Financ. Technol. Innov. 1(1) 35-45, 2023

This widespread access has been leveraged by FinTech 
startups like Flutterwave and Paystack to provide mobile-
based payment solutions. The convenience of  Mobile 
Money, like MTN’s MoMo and Airtel Money, means that 
even those without a traditional bank account can now 
participate in the economy, make transactions, save, or 
even access loans. The Central Bank of  Nigeria reported 
that mobile payment transactions rose from a mere 2 
billion Naira in 2012 to an impressive 5 trillion Naira in 
2019 (Central Bank of  Nigeria, 2020).
Achieving inclusive economic growth and sustainable 
development has remained one of  the core 
macroeconomic objectives of  all economies irrespective 
of  the level of  development. The relationship between 
financial development and growth has since remained 
topical issue in the finance literature.
Nigeria, often referred to as the “Giant of  Africa” due 
to its vast population and rich natural resources, has an 
economy that has undergone significant transformation 
in the last decade. Historically dependent on oil, efforts 
have been made to diversify the economy with increased 
focus on sectors like agriculture, telecommunications, 
and services. The World Bank (2023) reports that while 
Nigeria’s GDP stood at $445.12 billion in 2022, an 
underlying issue has been the limited access to financial 
services for a significant portion of  its nearly 200 million 
populace. With only about 60% of  Nigerian adults having 
access to formal financial services as of  2018, according 
to the Central Bank of  Nigeria, there is a vast untapped 
potential that FinTech promises to unlock.
Despite Nigeria’s status as Africa’s largest economy, with 
a GDP surpassing $450 billion, its annual growth rates 
have often lagged, averaging around 2.2% in the last 
decade (IMF, 2021). While GDP growth rate for 2021 
was 3.40%, a 5.44% increase from 2020. GDP growth 
rate for 2020 was -1.79%, a 4% decline from 2019. 
Nigeria GDP growth rate for 2019 was 2.21%, a 0.29% 
increase from 2018. This sluggish growth has been 
accompanied by persistently high unemployment rates 
and a widening wealth gap. This paradoxical scenario, 
where a robust economic structure coexists with subdued 
growth rates, raises pressing questions about the efficacy 
of  interventions. Therefore, given the universally 
acknowledged potential of  FinTech as a catalyst for 
economic growth, the underwhelming performance 
of  Nigerian economy is disturbing, and as such it is of  
interest in this study to investigate the Impact of  financial 
technology on economic growth in Nigeria between 
2012Q1 and 2022Q4.
The study addressed the following research objectives, 
and they are to:

i. Examine the impact of  Instant Pay Transactions on 
economic growth in Nigeria

ii. Analyse the impact of  Internet (Web) Transactions 
on economic growth in Nigeria

iii. Evaluate the impact of  Mobile Payment Transactions 
on economic growth in Nigeria
Based on the highlighted specific objectives, the following 

hypotheses were raised and tested:
H01: Instant Pay Transactions has no significant impact 

on economic growth in Nigeria
H02: Internet (Web) Transactions has not significantly 

enhanced Nigeria’s economic growth
H03: Mobile Payment Transactions has no significant 

impact on Nigeria’s economic growth

LITERATURE REVIEW
Conceptual Review
Financial Technology
Financial Technology, commonly abbreviated as FinTech, 
is a term that has garnered significant attention in both 
academic and industry circles in recent years, resulting in 
a plethora of  definitions and interpretations. At its core, 
FinTech intertwines the realms of  finance and technology, 
marking a departure from traditional financial systems 
and methodologies in favor of  innovative, technology-
driven solutions.
Arner, Barberis, and Buckley (2016) offer a comprehensive 
perspective on FinTech by characterizing it as “a new 
financial industry that applies technology to improve 
financial activities.” In their view, FinTech represents 
the evolution and transformation of  the financial sector, 
where technology acts as a pivotal force in reshaping 
financial services. It is not just about digitizing money but 
about monetizing data. It seeks to optimize the delivery 
of  financial services, making them more efficient, 
convenient, and widely accessible.
Zavolokina, Dolata, and Schwabe (2016) delve deeper 
into the constituent elements of  FinTech, suggesting 
that it “is a phenomenon driven by technology and user 
expectations which leads to a disruption of  the current 
financial markets, touching upon its various sectors.” This 
definition accentuates the disruptive nature of  FinTech. 
Unlike mere technological upgrades in financial services, 
FinTech introduces entirely new paradigms, models, and 
business processes that challenge and often supplant 
established norms.
Another enlightening viewpoint is provided by Lee 
and Shin (2018), who perceive FinTech as “a fusion 
of  advanced information technologies and financial 
services, leading to the creation of  new business models, 
applications, processes, and products.” The essence of  
this definition lies in the notion of  fusion. FinTech isn’t 
just about juxtaposing technology and finance; it’s about 
the synthesis of  the two, where the boundaries between 
finance and technology blur, giving birth to hybrid entities 
that redefine financial intermediation.
Schueffel (2017) synthesizes various definitions and 
describes FinTech as “the new marriage of  financial 
services and information technology.” In this union, it 
is not merely the technological facet that stands out, but 
the profound implications of  this union on the industry’s 
structure, competition, and value proposition. The 
implications span across sectors, influencing everything 
from banking to insurance to investment.
It’s noteworthy to mention that these definitions, while 



Pa
ge

 
37

https://journals.e-palli.com/home/index.php/ajfti

Am. J. Financ. Technol. Innov. 1(1) 35-45, 2023

varying in their differences, converge on the central 
theme of  FinTech being a transformative force. This 
transformation is not just limited to the digitization of  
financial transactions but extends to altering the very 
fabric of  the financial ecosystem, redefining the way 
stakeholders interact, and crafting novel avenues of  value 
creation.
In its core, FinTech encompasses a broad range of  
financial operations, including Instant Pay Transactions, 
Internet (Web) Transactions, and Mobile Payment 
Transactions.

Instant Pay Transactions (IPT)
Instant Pay Transactions signify real-time or near-real-
time transfer of  funds between two parties without 
any significant delay. Unlike traditional banking systems 
where transfer of  funds might require hours or even 
days, Instant Pay ensures the immediate availability of  
funds. Zhang, Guo, and Chen (2016) elucidate IPT as “a 
financial transaction system that processes funds transfer 
and ensures the settlement of  payments within seconds.” 
The allure of  IPT lies not only in its speed but also in its 
ability to provide 24/7 financial services, breaking away 
from the time constraints of  conventional banking hours.

Internet (Web) Transactions
Internet or Web Transactions denote the array of  
financial transactions conducted over the internet. These 
transactions encompass a wide range of  activities, from 
online shopping to securities trading, enabled through 
web-based platforms. Choi, Stahl, and Whinston (2017) 
expound on this by stating that “Internet transactions 
are electronic transactions that occur over the internet, 
facilitating trade of  goods or services.” Such transactions 
have revolutionized commerce, with global e-commerce 
sales soaring to $4.2 trillion in 2020 (Statista, 2021). The 
essence of  Internet transactions is the convergence of  
convenience, reach, and variety, empowering consumers 
with unparalleled choices and capabilities.

Mobile Payment Transactions
Mobile Payment Transactions are financial transactions 
initiated, executed, and confirmed using mobile devices, 
primarily smartphones and tablets. They offer a new 
horizon of  financial inclusion, especially in regions 
with limited banking infrastructure. Ondrus and 
Lyytinen (2015) define mobile payment transactions as 
“transactions involving monetary value in exchange for 
goods, services, or even as a transfer, executed using 
mobile technology.” These transactions can range from 
paying for a coffee using a mobile wallet to transferring 
money across borders using a mobile banking application. 
By 2019, over 2 billion individuals worldwide used 
mobile payments, signifying their growing ubiquity and 
importance (GSMA, 2020).

Economic Growth
Economic growth stands as one of  the most widely 

deliberated and researched concepts in the realm of  
economics, public policy, and development studies. At 
its core, economic growth pertains to the increase in the 
output of  goods and services in an economy over time, 
typically measured by the rise in the Gross Domestic 
Product (GDP) or Gross National Product (GNP).
One seminal definition comes from Solow (1956), who 
postulates economic growth as “the long-term rise in 
the capacity to supply increasingly diverse economic 
goods to its population, based on advancing technology 
and the institutional and ideological adjustments that 
it demands.” This viewpoint emphasizes the role of  
technological advancements and the concomitant societal 
and institutional changes, portraying economic growth as 
a multidimensional and dynamic process.
Lucas (1988) presents a more human-centric perspective, 
underscoring the role of  human capital in fueling 
economic growth. He defines it as “the sustained, long-
term augmentation in the living standards and material 
well-being of  the populace, predominantly driven by 
accumulated skills, knowledge, and expertise.” In Lucas’s 
interpretation, the cognitive and skill enhancement of  
a nation’s citizens is paramount, serving as a key driver 
of  increased productivity and, subsequently, economic 
growth.
Barro (1991) introduces a holistic view of  economic 
growth, suggesting that it’s “a composite outcome 
influenced by factors such as physical capital accumulation, 
human capital development, technological progress, and 
the macroeconomic environment.” This perspective 
recognizes the intricate determinants shaping economic 
growth, from tangible assets like infrastructure to 
intangible facets like governance and policy frameworks.
More recent scholarship, exemplified by the work 
of  Acemoglu and Robinson (2012), delves into the 
institutional foundations of  growth. They opine that 
economic growth is “deeply intertwined with the 
inclusivity and structure of  a nation’s institutions – both 
economic and political.” In their widely acclaimed work, 
they argue that nations with inclusive, democratic, and 
robust institutions are more likely to experience sustained 
economic growth compared to those with extractive, 
authoritarian regimes.

Theoretical Review
Innovation Diffusion Theory
Financial Technology (FinTech) has been a burgeoning 
field of  study, with numerous theories attempting to 
elucidate its implications on global finance. Among 
these, the “Innovation Diffusion Theory” offers valuable 
insights. Originally conceived by Everett Rogers in 1962 
in his seminal work “Diffusion of  Innovations,” this 
theory explores how, why, and at what rate new ideas 
and technology spread through cultures. Rogers’ theory 
doesn’t exclusively focus on FinTech; however, its 
applicability to the sector is both timely and profound.
Rogers (1962) posited that innovations disseminate 
through societies in an S-shaped curve, beginning with 



Pa
ge

 
38

https://journals.e-palli.com/home/index.php/ajfti

Am. J. Financ. Technol. Innov. 1(1) 35-45, 2023

innovators, then early adopters, the early majority, 
the late majority, and finally, the laggards. The theory 
encapsulates factors determining the rate of  adoption, 
including relative advantage, compatibility, complexity, 
trialability, and observability. In the context of  FinTech, 
this suggests that financial technologies, despite their 
inherent advantages, would still face varying rates of  
adoption based on their perceived benefits, ease of  use, 
and alignment with existing systems and cultural values.
The strength of  Rogers’ theory lies in its comprehensive 
framework. It aptly explains the variegated adoption 
rates of  FinTech solutions across different countries and 
demographics. For instance, mobile money services like 
M-Pesa saw rapid adoption in Kenya due to its immediate 
perceived relative advantage for the unbanked populace. 
The theory also underscores the importance of  early 
adopters – a group crucial for FinTech startups seeking 
market penetration and influence.
However, the “Innovation Diffusion Theory” isn’t 
without criticisms. Some scholars argue that it’s too linear 
and deterministic, not sufficiently accounting for the 
dynamic feedback loops often present in the adoption 
of  innovations (Wolfram, 2016). Others posit that the 
theory, while elucidative, often underemphasizes the role 
of  societal structures and power relations in shaping 
adoption patterns (Greenhalgh et al., 2004).
In relation to the present study on the impact of  FinTech 
on the Nigerian economy, the “Innovation Diffusion 
Theory” provides a different approach to interpret 
findings. Nigeria presents a mosaic of  adoption patterns 
– while certain FinTech innovations like mobile banking 
have gained traction, others face resistance. The theory 
could explain why certain demographics or regions in 
Nigeria might be early adopters, while others lag behind. 
Moreover, understanding the stages of  diffusion could be 
pivotal for policymakers and businesses aiming to catalyze 
FinTech’s positive impact on Nigeria’s economic growth.

Financial Intermediation Theory
A pivotal theory in understanding the structure, behavior, 
and evolution of  financial markets and institutions is 
the “Financial Intermediation Theory.” The “Financial 
Intermediation Theory” revolves around the role and 
functioning of  financial intermediaries – entities that 
act as middlemen between savers and borrowers. The 
classical work of  Gurley and Shaw (1955) serves as a 
foundational pillar in this domain. They argued that 
financial intermediaries emerge to reduce transaction 
costs, manage risks, and address informational 
asymmetries in the market. Instead of  individual savers 
directly lending to borrowers, which can be inefficient 
and fraught with uncertainties, intermediaries like banks, 
insurance companies, and mutual funds pool resources 
and lend them out, leveraging their expertise, scale, and 
diversification.
In the FinTech landscape, this theory becomes especially 
salient. Traditional banks, as financial intermediaries, are 
now being complemented (or even challenged) by digital 

platforms that also perform intermediation, albeit with 
different mechanisms. Peer-to-peer lending platforms, 
robo-advisors, and crowdfunding portals are all modern 
embodiments of  the financial intermediation concept, 
leveraging technology to potentially enhance efficiency, 
reduce costs, and democratize finance.
The strength of  the “Financial Intermediation Theory” 
lies in its comprehensive explanation of  why certain 
financial institutions exist and how they add value in the 
economic system. It provides a framework to understand 
the transformation of  savings into investments, the 
management of  risks, and the allocation of  capital in 
economies.
However, it’s not without criticisms. The digital age 
has introduced new forms of  intermediation that 
challenge traditional paradigms. Critics argue that the 
classical intermediation theory may not fully capture 
the importance of  digital finance platforms, especially 
those that operate on decentralized systems like 
blockchain (Tapscott & Tapscott, 2016). Moreover, 
while intermediaries reduce risks, they can also introduce 
systemic risks, as was evident in the 2008 financial crisis 
(Gorton & Metrick, 2012).
For Nigeria, understanding the “Financial Intermediation 
Theory” is essential in navigating its burgeoning FinTech 
landscape. With a robust traditional banking system 
juxtaposed with rapidly emerging digital financial 
platforms, Nigeria is at an inflection point. The theory 
offers insights into how digital platforms might reshape 
financial intermediation, potentially offering more 
inclusive, efficient, and resilient financial services. As 
Nigeria aspires for robust economic growth, the evolution 
of  its financial system, guided by both traditional and 
modern tenets of  financial intermediation, will play a 
pivotal role.

Solow Growth Model
One of  the foundational theories used to understand 
the determinants and drivers of  economic growth is the 
“Solow Growth Model,” also known as the Neoclassical 
Growth Theory. “The Solow Growth Model” was 
developed by Robert Solow in the 1950s. The theory 
distinguishes between short-term fluctuations and long-
term trends in the growth process of  an economy. At 
its core, the model revolves around three primary inputs: 
labor, capital, and technology. Solow postulated that 
in the early stages, an economy can grow by increasing 
labor or capital; however, over time, there are diminishing 
returns to these inputs. As a result, sustained long-term 
growth can only come from technological progress or 
improvements in efficiency (Solow, 1956).
The strength of  the Solow Growth Model lies in 
its simplicity and general applicability. It provides a 
foundational framework for understanding the macro-
level factors that drive economic growth. The model 
has been instrumental in highlighting the crucial role 
of  technological advancement and innovation in 
ensuring sustainable economic growth, a perspective 



Pa
ge

 
39

https://journals.e-palli.com/home/index.php/ajfti

Am. J. Financ. Technol. Innov. 1(1) 35-45, 2023

that’s profoundly relevant in today’s tech-driven global 
economy.
However, the model also has its share of  criticisms. 
Romer (1986) and Lucas (1988) argued that the Solow 
Model doesn’t adequately address the role of  human 
capital (knowledge, skills, and health of  the population) 
in growth. Moreover, the model’s assumption of  constant 
returns to scale and its treatment of  technology as an 
exogenous factor have been challenged in endogenous 
growth theories, which emphasize the internal factors 
within an economy, like R&D and education, that 
influence growth.
For Nigeria, the Solow Growth Model offers essential 
insights. The nation’s rich endowments in natural 
resources, especially oil, and its young labor force provide 
short to medium-term avenues for growth. However, 
for sustained long-term prosperity, Nigeria’s focus on 
leveraging and integrating technology into its economic 
fabric becomes imperative. The advent of  FinTech, as 
discussed earlier, is an example of  how technological 
innovation can significantly impact economic productivity 
and growth. As Nigeria grapples with the challenges of  
diversifying its economy, ensuring stability, and fostering 
inclusive growth, theories like Solow’s underscore the 
indispensable role of  technological innovation and 
integration.

Empirical Review
Obinna and Uche in their 2017 research titled “Digital 
Payments and Economic Growth in Nigeria: Risks and 
Rewards,” examined the influence of  digital payments 
on Nigeria’s economic growth. This research spanned 
the period from 2005 to 2016. Adopting a quantitative 
analysis, the dependent variable was economic growth, 
while the independent variable was the proliferation of  
digital payments. The study’s outcomes indicated that 
digital payments can indeed spur economic activities. 
However, the associated risks can be counterproductive, 
especially in nations with emerging cyber-infrastructure. 
This study was appreciated for its relevance to the 
Nigerian context. However, some critics suggested that 
it would have been beneficial to explore the nature and 
types of  digital payments in use more in-depth and their 
differential impacts.
Folorunso and Ikpefan (2018) present a broader 
perspective in their study on the impact of  financial 
technology on economic growth. Their research isn’t 
solely anchored to Nigeria but spans several African 
nations. Although centered around events and data 
from 2005 leading up to 2018. Folorunso and Ikpefan’s 
methodological approach is both diversified and robust. 
They combined econometric modeling with qualitative 
evaluations to uncover the of  the relationship between 
fintech and economic growth. Their choice of  dependent 
variable was Economic Growth, which they assessed 
using GDP growth rates amongst other macroeconomic 
indicators. In contrast, the independent variable under 
scrutiny was Financial Technology. They particularly 

emphasized the adoption and utilization rates of  instant 
financial transaction platforms across the countries 
in their study. Their conclusions differ notably from 
Akinwale and Tijani’s study. Folorunso and Ikpefan 
observed that there’s a direct and positive correlation 
between the rapidity of  financial transactions enabled 
by fintech and economic growth. They posited that such 
immediate transaction capabilities can speed up business 
processes, acting as a catalyst for economic activity. 
However, a potential critique of  their work is the broad 
generalizations made across different African countries. 
Each of  these nations has its unique economic, cultural, 
and regulatory backdrop, which might necessitate a more 
bespoke approach to research.
Mutua and Ouma (2017) In their seminal work titled 
“The Impact of  Mobile Banking on Financial Inclusivity 
in Kenya,” Mutua and Ouma explored the domain of  
financial technology, specifically focusing on mobile 
banking’s role in fostering financial inclusivity. Their study 
covered the period between 2010 and 2016, reflecting a 
significant phase during which Kenya witnessed a surge 
in mobile banking users. Utilizing regression analysis, the 
researchers treated mobile banking adoption (measured 
by the number of  users and volume of  transactions) 
as the independent variable, while financial inclusivity 
(gauged by the percentage of  the banked population) 
stood as the dependent variable. Their findings revealed 
a positive correlation between mobile banking adoption 
and financial inclusivity, suggesting that mobile platforms 
were instrumental in integrating a larger section of  the 
Kenyan population into the formal financial system. 
However, critics of  their study argue that while the 
correlation is evident, causation isn’t conclusively proven. 
Some believe that external factors, such as government 
policies or global tech trends, could have played a more 
significant role than what was credited to mobile banking 
alone.
Patil and Kumar’s research, titled ‘E-commerce and 
India’s Economic Growth: An Analytical Exploration,’ 
focused on ‘Digital Transactions and its Impact on a 
Country’s Economy.’ From 2012 to 2017, their study 
aimed to ascertain the role of  burgeoning e-commerce 
platforms in influencing India’s GDP growth. Adopting 
a mixed-method approach that combined qualitative and 
quantitative data, they considered e-commerce adoption 
rates and digital transaction volumes as independent 
variables, with the GDP growth rate as the dependent 
variable. Their research revealed that the proliferation 
of  e-commerce platforms, supported by governmental 
policies, significantly correlated with India’s economic 
uptick during the period.
However, this study is not without its detractors. 
Critics have pointed out that the research sometimes 
oversimplified the complex interplay of  various economic 
factors. They argued that it attributed disproportionate 
credit to e-commerce, potentially downplaying other 
concurrent economic drivers.
Desalegn (2020) Focusing on the Ethiopian context, 



Pa
ge

 
40

https://journals.e-palli.com/home/index.php/ajfti

Am. J. Financ. Technol. Innov. 1(1) 35-45, 2023

Desalegn, in his paper “Web Transactions and Economic 
Growth: A Critical Evaluation of  Ethiopia’s Landscape,” 
embarked on examining the intricate relationship 
between web-based transactions and the nation’s 
economic landscape. His study spanned from 2015 to 
2019. Using time-series analysis, Desalegn chose the 
volume of  web transactions as the independent variable, 
with the country’s GDP growth rate being the dependent 
variable. While the research underscored an observable 
increase in the volume of  web transactions, Desalegn 
took a cautious stance. He argued that without parallel 
growth in supportive infrastructure and apt regulations, 
the observed economic benefits might be ephemeral. His 
work, however, faced criticism for its somewhat pessimistic 
outlook. Opponents believed that while his concerns 
were valid, they overshadowed the vast potential web 
transactions hold for Ethiopia’s economy in the long run.
Kamau and Waiganjo in their 2016 study focused on the 
burgeoning landscape of  Kenya’s mobile banking sector, 
particularly assessing its role in the growth of  Small and 
Medium-sized Enterprises (SMEs). Spanning the time 
frame from 2010 to 2015, the study employed a descriptive 
research design with stratified sampling techniques to 
gather data from a diverse group of  SMEs across Kenya’s 
major cities. By utilizing regression analysis, they set out 
to understand the relationship between mobile banking 
(independent variable) and SME growth (dependent 
variable). Their findings suggested a positive correlation 
between the two, indicating that the surge in mobile 
banking adoption greatly facilitated the operations and 
growth of  SMEs by offering them access to expedited 
financial services. However, some critics argue that the 
study doesn’t factor in other socio-economic parameters 
that might have influenced the growth of  SMEs during 
the same period.
Singh and Agrawal embarked on a comprehensive 
exploration in 2019, dedicated to India’s digital economy 
with a spotlight on mobile payments. The study, which 
covered the period from 2014 to 2018, made use of  a 
quantitative method, collecting data through structured 
questionnaires disseminated among urban and rural 
populations. Analyzing the data through a series of  
regression models, the independent variable was the 
infrastructure of  digital payment systems, while the 
dependent variable was the rate of  financial inclusion in 
the country. Their findings highlighted the indispensable 
role of  robust digital infrastructure in the successful 
proliferation of  mobile payments. Yet, they emphasized 
the challenges posed by infrastructural bottlenecks. While 
the study is profound in its insights, some scholars feel 
it might have glossed over the cultural and behavioral 
aspects of  the population that could influence their 
adoption of  mobile payments.
In 2021, Teshome turned his research lens towards 
Ethiopia’s digital economy, focusing on the realm of  
digital payments. The study, spanning the years 2016 to 
2020, employed a mixed-method approach, combining 
both qualitative interviews and quantitative surveys 

from different demographic sections. Employing 
factor analysis, the research delineated the relationship 
between the dependent variable, economic growth, 
and the independent variable, the adoption rate of  
digital payments. Teshome’s conclusions underlined the 
immense potential of  digital payments in Ethiopia but 
also spotlighted the impediment of  limited financial 
literacy among the populace. The study, while in-depth, 
has been critiqued for not sufficiently addressing the 
regulatory and policy environment that could affect the 
growth of  digital payments.

MATERIALS & METHODS
In this study, the selected research design is the ex-
post facto design. This approach is characterized by 
the researcher’s inability to manipulate the data under 
examination. Defined by Kerlinger (1973), the ex-post 
facto, also termed as ‘causal comparative research’, 
delves into identifying potential cause-effect relationships 
between dependent and independent variables. The 
primary objective is to establish a definitive causal 
connection between them. The pertinence of  this design, 
especially in discerning such relationships, motivated its 
adoption for the present study.
For this study, the core dataset is constructed from 
annual secondary data that align closely with our research 
objectives. These data have been generated from esteemed 
publications, primarily the Central Bank of  Nigeria 
(CBN) and the National Bureau of  Statistics (NBS). 
The data sets focus on several pivotal metrics: Instant 
Pay Transactions, Internet (Web) Transactions, Mobile 
Payment Transactions, and indicators of  economic 
growth, represented through Real Gross Domestic 
Product (RGDP).
The model for the study modified the framework 
of  Mamudu and Gayovwi (2019) in estimating the 
relationship between cashless policy (measured as Instant 
Pay Transactions, Internet (Web) Transactions, Mobile 
Payment Transactions) and economic growth. For this 
study, the mathematical specification of  the implicit 
model that expresses the relationship between fintech 
and economic growth in Nigeria is expressed as:
RGDPt = ƒ(IPT, ITR, MPT)                (1)
Setting up equation (1) in a linear stochastic form (or 
econometric form) is expressed as:
RGDPt = λ0 + λ1 IPT + λ2 ITR + λ3MPT + μ1             (2)
Where:
RGDP = Real GDP
IPT = Instant Pay Transactions
ITR = Internet Transactions
MPT = Mobile Payments Transactions
λ0 = Constant term
λ1 - λ3 = Coefficients of  Fin-tech (as Instant Pay 
Transactions, Internet (Web) Transactions, Mobile 
Payment Transactions) at time t.
μ1 = The error term at time t
Building equations (2) into a FMOLS model, we have:
                  (3)



Pa
ge

 
41

https://journals.e-palli.com/home/index.php/ajfti

Am. J. Financ. Technol. Innov. 1(1) 35-45, 2023

integrated. Unlike certain econometric techniques which 
demand that time series variables be integrated of  order 
one, or I(1), FMOLS allows for rigorous analysis without 
pre-existing assumptions about the integration properties 
of  the series under examination. This flexibility 
positions FMOLS as a preferred choice, especially when 
scrutinizing relationships between variables like Instant 
Pay Transactions, Internet (Web) Transactions, Mobile 
Payment Transactions, and RGDP in a dynamic economic 
landscape like Nigeria.

RESULTS AND DISCUSSIONS
Descriptive Statistics
Table 1 presents the descriptive statistics for the Real 
Gross Domestic Product (RGDP) and three types 
of  digital financial transactions: Value of  Instant Pay 
Transactions (IPT), Value of  Internet (Web) Transactions 
(ITR), and Value of  Mobile Payment Transactions (MPT) 
- all denominated in Naira Billion.

Equation represents the long-run relationship between 
RGDP and the selected financial technology variables 
using the FMOLS methodology. The coefficients   will 
give insights into how each of  the financial technology 
variables impacts economic growth in Nigeria.
The FMOLS methodology offers superior robustness 
in the face of  endogeneity, negating the necessity for 
instruments like the 2-stage least squares or instrumental 
variable approach. FMOLS corrects for potential 
endogeneity stemming from the feedback effects among 
the variables, ensuring unbiased long-run estimates. What 
sets the FMOLS apart is its technique to account for 
the potential endogeneity in the independent variables 
and serial correlation in the error terms. This method 
provides adjustments for potential biases and serial 
correlation in the error terms that often plague OLS 
in non-stationary contexts. FMOLS can be applied 
irrespective of  whether the variables under study are 
integrated of  order one, I(1), mixed, or even fractionally 

Table 1: Descriptive Statistics
 RGDP IPT ITR MPT
 Mean  2.386039  17792.59  83.45523  837.7586
 Std. Dev.  2.194305  13993.28  73.83482  952.7098
 Skewness -0.04536  0.378421  0.501017  0.762613
 Kurtosis  2.151877  1.638418  1.587568  1.868649
 Jarque-Bera  1.333829  4.448979  5.498229  6.611496
 Probability  0.513290  0.108123  0.063984  0.036672
 Observations  44  44  44  44

Source: Authors Computation, 2023 (Eviews-12)

The average RGDP growth rate over the period studied 
is 2.386039%, indicating the general pace of  economic 
growth. Meanwhile, the digital transactions show a 
considerably large volume, with IPT transactions leading 
the way with an average value of  17,792.59 billion Naira. 
This is followed by MPT and ITR, with average values 
of  837.7586 billion Naira and 83.45523 billion Naira, 
respectively.
The standard deviations for these variables provide 
insights into their spread around the mean. The RGDP 
has a relatively low spread with a standard deviation of  
2.194305%, indicating stable economic growth. IPT 
has the highest variability, as indicated by its standard 
deviation of  13,993.28 billion Naira, hinting at significant 
fluctuations in the value of  instant transactions. This 
high variability can also be seen in MPT and ITR, which 
have standard deviations of  952.7098 billion Naira and 
73.83482 billion Naira, respectively.
Skewness gives a sense of  the direction and degree of  
asymmetry of  the distribution. The RGDP distribution 
is almost symmetrical with a skewness close to zero. In 
contrast, all digital transaction variables are positively 
skewed, with MPT having the highest skewness, 
suggesting that there are a few periods with exceptionally 
high values of  mobile transactions.

Kurtosis measures the “tailedness” of  the distribution. 
All variables, except RGDP, have kurtosis values less than 
3, suggesting a distribution with lighter tails compared to 
a normal distribution.
Finally, the Jarque-Bera statistic tests the hypothesis that 
the data is normally distributed. For RGDP, with a value 
of  1.333829 and a probability of  0.513290, we fail to reject 
the null hypothesis, suggesting that RGDP is normally 
distributed. For the financial technology variables, IPT 
and ITR have p-values above 0.05 (0.108123 and 0.063984, 
respectively), suggesting that these distributions do not 
significantly deviate from normality. However, MPT, with 
a Jarque-Bera statistic of  6.611496 and a probability of  
0.036672, indicates a potential deviation from a normal 
distribution.

Unit Root Test
Time series data often exhibit tendencies that can be 
addressed through differencing, primarily to ascertain 
the stationarity of  the data. The unit root test, therefore, 
checks the stationarity of  our model’s series data, helping 
to determine the authenticity of  the relationship between 
Financial Technology variables and the Nigerian economy. 
Essentially, the null hypothesis presumes non-stationarity 
in the variables. A variable is regarded as non-stationary if  



Pa
ge

 
42

https://journals.e-palli.com/home/index.php/ajfti

Am. J. Financ. Technol. Innov. 1(1) 35-45, 2023

its test statistic, when taken in absolute terms, falls below 
its critical value at specific significance levels. 
Table 2 thus presents the results of  the Augmented 
Dickey-Fuller (ADF) unit root test, an essential step in 

time series analysis to determine the stationarity of  the 
series. Stationarity implies that statistical properties, such 
as mean and variance, remain constant over time, which 
is crucial for modeling and forecasting.

Table 2: Unit Root Test Result
Variable ADF Test Statistics
 ADF Critical Value Order of  Integration
RGDP -3.743706 -3.520787** I(1)
INT -7.460580 -4.198503* I(1)
IPT -5.295919 -4.192337* I(1)
MPT -3.264371 -3.192902*** I(1)

Note: *, **, *** significant at 1%, 5% and 10%
Source: Authors Computation, 2023 (Eviews-12)

For the variable RGDP, the ADF test statistic is 
-3.743706, which is more negative than its critical value 
at the 5% significance level (-3.520787**). This suggests 
that RGDP is stationary after first differencing, hence it 
is integrated of  order one, I(1).
Similarly, the Internet transactions variable (INT) has an 
ADF test statistic of  -7.460580. This value is far more 
negative than the critical value at the 1% significance 
level (-4.198503*), indicating strong evidence against the 
presence of  a unit root. Therefore, INT is also stationary 
at first difference, I(1).
For the Instant Pay Transactions (IPT), the ADF test 
statistic is -5.295919, surpassing the critical value at the 
1% significance level (-4.192337*). Thus, IPT is stationary 
at first difference, I(1).
Lastly, the Mobile Payment Transactions (MPT) has 
an ADF statistic of  -3.264371, which is more negative 
than its critical value at the 10% significance level 

(-3.192902***). This indicates that MPT is stationary 
after first differencing and is integrated of  order one, I(1).
Therefore, all variables in Table 2 - RGDP, INT, IPT, and 
MPT - are integrated of  order one, I(1), suggesting that 
each of  them becomes stationary after taking their first 
differences. This implies that any modeling or forecasting 
involving these variables will require addressing this non-
stationarity, typically through techniques like differencing 
or cointegration.

Cointegration Test
Building upon our ongoing discussion on time series 
analysis and the exploration of  relationships between 
economic and financial variables, the “Table 3” unveils an 
essential aspect of  our analysis: the co-integration of  series. 
Co-integration ensures that even if  the individual series are 
non-stationary, their linear combinations can be stationary, 
suggesting a stable, long-term relationship among them.

Table 3: Results of Engle and Granger (Residual Based) Cointegration Test
Variable ADF Test Statistic 95% Critical ADF Value Remarks
Residual -2.785041 -2.621185* Co-integrated

Note: * significant at 1%
Source: Authors Computation, 2023 (Eviews-12)

In “Table 3: Results of  Engle and Granger Residual 
Based Cointegration Test”, the ADF Test Statistic for 
the residuals is -2.785041, which exceeds the critical value 
at the 1% significance level of  -2.621185, indicating co-
integration. This is of  paramount importance, as it signals 
a long-term equilibrium relationship between financial 
technology adoption or advancements and economic 
growth in Nigeria.

FMOLS Regression Results and Test of  Hypotheses
Building upon our discussion regarding the impact of  
financial technology on economic growth in Nigeria, the 
“Table 4: Fully Modified Least Squares (FMOLS) Result” 
offers some interesting insights into the direct influences 
of  specific financial technology facets on the country’s 
economic growth, as measured by RGDP (%).

Starting with the Value of  Instant Pay Transactions 
(LOG(IPT)), we observe a coefficient of  -5.6296, which 
is statistically significant at the 0.0016 level. The negative 
sign indicates an inverse relationship with RGDP. This 
might initially seem counterintuitive, but it suggests that as 
Instant Pay Transactions increase, there may be a decline 
in the RGDP. It’s possible that while these transactions 
provide convenience, they could be displacing other 
more profitable or traditional transaction methods, hence 
leading to a short-term decrease in economic growth. 
Based on the outcome of  the p-value which was found 
to be (0.0016) less than 0.05 (or 5%) level of  significance, 
the study concludes that instant pay transactions have a 
significant impact on economic growth in Nigeria.
The Value of  Internet (Web) Transactions (LOG(ITR)), 
on the other hand, has a positive coefficient of  0.7707, 



Pa
ge

 
43

https://journals.e-palli.com/home/index.php/ajfti

Am. J. Financ. Technol. Innov. 1(1) 35-45, 2023

significant at the 0.0122 level. This indicates a direct 
relationship with RGDP, suggesting that as web-based 
transactions grow, there’s a favorable impact on the 
country’s economic growth. It can be inferred that Internet 
transactions, which might encompass e-commerce, online 
services, and other web-based financial activities, are 
contributing positively to Nigeria’s economic landscape. 
Inline with the outcome of  the p-value (which was found 
to be 0.0122, and also less than 0.05, the study concludes 
that Internet (Web) Transactions has significantly enhanced 
Nigeria’s economic growth within the study period.
Moreover, the Value of  Mobile Payment Transactions 
(LOG(MPT)) also presents a positive relationship with 
a coefficient of  2.5144, significant at the 0.0412 level. 
The influence of  mobile payments can’t be understated, 
especially in a country like Nigeria where mobile 
penetration is high, and many citizens rely on mobile-
based solutions for their financial needs. The positive 
coefficient suggests that as the adoption and use of  
mobile payment solutions grow, it’s conducive to Nigeria’s 
economic prosperity. Therefore, based on the outcome 
of  the p-value which was found to be 0.0412, and also 
less than 0.05 (or 5% level of  significance), the study 
further concludes that Mobile Payment Transactions has 

a significant impact on Nigeria’s economic growth.
The R-squared value of  0.678682 implies that 
approximately 67.87% of  the variation in the dependent 
variable (in this context, economic growth or RGDP) can 
be explained by the independent variables in the model 
(which could include Value of  Instant Pay Transactions 
(IPT), Value of  Internet (Web) Transactions (ITR), and 
Value of  Mobile Payment Transactions (MPT)). This 
is a relatively high value, indicating that the model has 
captured a substantial portion of  the variability in the 
dependent variable.
The Wald-Statistic of  7.3161, accompanied by a Wald 
(p-value) of  0.0407, is employed to test the joint 
significance of  coefficients in the model. The p-value 
being less than 0.05 suggests that the coefficients of  Value 
of  Instant Pay Transactions (IPT), Value of  Internet 
(Web) Transactions (ITR), and Value of  Mobile Payment 
Transactions (MPT) in the model are jointly significant at 
the 5% level. This means that the fintech indicators in the 
model, as a group, play a significant role in explaining the 
variation in economic growth or RGDP.
Table which shows the results of  residual test provides 
insights into the quality and validity of  the regression 
model utilized in the study.

Table 4: Fully Modified Least Squares (FMOLS) Result Dependent Variable: RGDP (%)
Variable Coefficient Std. Error t-Statistic Prob.  
LOG(IPT) -5.6296 1.6164 -3.4828 0.0016
LOG(ITR) 0.7707 0.2728 2.8255 0.0122
LOG(MPT) 2.5144 1.1401 2.2055 0.0412
C 37.5433 1.8627 20.1551 0.0000
R-squared 0.678682
Adjusted R-squared 0.523196
Long-run variance 11.98656
Wald-F-Statistic 7.3161
Wald-F-Statistic (p-value) 0.0407

Source: Authors Computation, 2023 (Eviews-12)

Table 5: Results of Residual Test
Tests  Outcomes
  Coefficient Probability
Correlogram Q-Statistics (Serial correlation) F-stat. 2.189336 0.2592
Normality Test Jarque-Bera 3.592803 0.1658

Source: Authors Computation, 2023 (Eviews-12)

The Correlogram Q-Statistics test is utilized to identify any 
potential serial correlation in the residuals of  a regression 
model. Serial correlation can be problematic as it suggests 
that the model may not be capturing all relevant information, 
leading to inefficiency in the regression estimates. In 
this test, an F-statistic of  2.189336 with a probability of  
0.2592 is observed. Since the probability value is greater 
than conventional significance levels (e.g., 0.05 or 0.01), it 
indicates that there’s no significant serial correlation in the 
residuals. This is a positive outcome, indicating that the 

FMOLS regression model is well-specified in this aspect.
Next, the Normality Test, specifically the Jarque-Bera 
statistic, assesses whether the residuals of  the model are 
normally distributed. Normal distribution of  residuals is a 
key assumption for many statistical tests and is pivotal for 
the validity of  many inferences drawn from the regression 
model. The Jarque-Bera value stands at 3.592803 with a 
probability of  0.1658. The probability value being greater 
than the conventional significance levels indicates that 
the residuals do not significantly deviate from a normal 



Pa
ge

 
44

https://journals.e-palli.com/home/index.php/ajfti

Am. J. Financ. Technol. Innov. 1(1) 35-45, 2023

distribution. Therefore, the residual tests from Table 5 
suggest that the regression model employed in studying 
the nexus between financial technology and economic 
growth in Nigeria seems well-fitted, with no evidence 
of  significant serial correlation in the residuals and with 
residuals that are approximately normally distributed. This 
reinforces the reliability of  the conclusions and inferences 
drawn from the model regarding the role of  fintech in 
Nigeria’s economic trajectory.

DISCUSSION
Findings from the study indicate that instant pay 
transactions (IPT) exhibit a negative, yet statistically 
significant, impact on economic growth in Nigeria. The 
implication of  this observed negative effect is that while 
instant pay transactions may have streamlined payments 
and remittances, simplifying financial processes for both 
individuals and businesses, they could be inadvertently 
stifling longer-term economic growth. One conceivable 
interpretation is that the immediate gratification offered 
by instant payments may be encouraging a culture of  
instantaneous consumption at the expense of  more 
sustainable, long-term investments that are vital for 
robust economic expansion. Furthermore, the ease of  
instant transactions could be creating a transient economic 
environment, where funds are rapidly circulated but not 
necessarily utilized in avenues that stimulate meaningful 
economic development or growth. This understanding 
resonates with a study by Obinna and Uche (2017) in 
Nigeria who found that while digital payments can spur 
economic activities, the associated risks, especially in 
countries with less mature cyber-infrastructure, can be 
detrimental. The study suggests that for economies like 
Nigeria, transitioning to digital modes should be gradual 
and well-structured. Conversely, our results diverge from 
the conclusions drawn by Folorunso and Ikpefan (2018). 
Their research, which spanned several African countries, 
suggested that instant financial transactions directly 
correlate with economic growth. They argued that the 
proximity of  such transaction’s aids in accelerating business 
processes, reducing downtimes, and consequently spurring 
economic growth.
In addition, findings from the study showed that Internet 
(Web) Transactions have significantly enhanced Nigeria’s 
economic growth. The findings imply that with the 
increasing adoption of  web-based transactions, there’s an 
obvious positive shift in Nigeria’s economic growth. One of  
the primary reasons is the direct access to a broader market 
provided by the internet, eliminating many geographical 
and logistical barriers that previously hindered growth. 
Furthermore, businesses, especially small and medium-
sized enterprises, have been able to tap into new revenue 
streams, ensuring a more sustained cash flow and enabling 
them to reinvest in their ventures. This perspective aligns 
with the study by Mutua and Ouma (2017) from Kenya, 
who observed that the increase in web transactions, 
facilitated mainly by mobile banking and e-commerce, has 
been pivotal in the country’s recent economic growth. They 
argued that technological advances in financial platforms 

have enabled better financial inclusivity, ensuring that even 
the traditionally unbanked populations participate in the 
economy. Similarly, Patil and Kumar (2018) from India 
shared insights into how digital transactions, especially in 
the e-commerce and service sectors, have augmented the 
country’s GDP growth.
Lastly, findings from this study suggest that Mobile Payment 
Transactions (MPT) have a positive and significant impact 
on Nigeria’s economic growth. The implications of  these 
findings reveal that the increase in the adoption and use 
of  mobile payment platforms has dynamically transformed 
the Nigerian financial landscape, providing easy access 
to financial services and facilitating swift and secure 
transactions. The broader acceptance of  these platforms 
has enhanced economic activities by empowering a larger 
portion of  the population, especially those in remote areas, 
to participate in the digital economy. 
Additionally, the surge in mobile payments has reduced the 
dependency on physical banking infrastructure, leading to 
reducing operational costs for banks and fostering financial 
inclusivity. This finding is in line with the findings of  Kamau 
and Waiganjo (2016), who explored the transformative 
effect of  mobile banking in Kenya. Their research posits 
that the rise of  mobile banking systems catalyzed the 
growth of  Small and Medium-sized Enterprises (SMEs), a 
backbone of  the Kenyan economy, by providing them with 
convenient financial tools and services.

CONCLUSION 
Over the past decade, financial technology has prominently 
emerged as a significant driver influencing economic 
growth, especially in developing nations such as Nigeria. 
Our primary objective was to investigate the impact 
of  financial technology on Nigeria’s economic growth 
between 2012Q1 and 2022Q4.
Three salient conclusions emerged from our discussions:
The spread of  web-based transactions has considerably 
enhanced Nigeria’s economic canvas. Their adoption has 
facilitated smoother business operations, expanded market 
reach, and fostered global integrations, all of  which have 
contributed positively to economic growth.
Our discourse revealed that mobile payment mechanisms 
have benefited Nigeria’s economic landscape. The ease 
and convenience of  mobile transactions have empowered 
even the remotest parts of  the country, bridged economic 
disparities, and fostered inclusive growth.
Remarkably, Instant Pay Transactions (IPT), while being 
an innovation in seamless transactions, displayed a negative 
yet statistically significant correlation with Nigeria’s 
economic growth. This could be attributed to factors like 
rapid adoption without adequate infrastructural support or 
potential misuse.

RECOMMENDATIONS
Arising from these findings, the following recommendations 
were suggested:

i. The evident economic influence of  web-based 
transactions in Nigeria necessitates focused action. In 
collaboration with private entities, the government should 



Pa
ge

 
45

https://journals.e-palli.com/home/index.php/ajfti

Am. J. Financ. Technol. Innov. 1(1) 35-45, 2023

prioritize strengthening digital infrastructure. This ensures 
reliable internet access nationwide. Concurrently, as online 
transactions expand, so do cybersecurity threats. Enhanced 
cybersecurity measures and public awareness campaigns 
are paramount to safeguarding the nation’s digital financial 
frontier.

ii. Mobile transactions have transformed Nigeria’s 
financial landscape. However, to optimize their potential, a 
two-pronged approach is recommended. Firstly, expanding 
mobile network connectivity to rural and remote areas 
ensures that no community is left behind. Secondly, there 
is a clear need for consistent user education to enlighten 
individuals about safe mobile payment practices and the 
system’s broader capabilities.

iii. The negative association of  Instant Pay Transactions 
with economic growth raises concerns. An in-depth 
infrastructure audit is essential to reveal and address any 
underlying inefficiencies or bottlenecks within that gateway 
payment system. Alongside, tighter regulatory oversight by 
the CBN on IPT is pivotal. Such measures will not only 
mitigate potential misuse but also realign IPT to bolster 
Nigeria’s economic growth.”

REFERENCES
Acemoglu, D., & Robinson, J. A. (2012). Why nations fail: The 

origins of  power, prosperity, and poverty. Crown Business.
Arner, D. W., Barberis, J., & Buckley, R. P. (2016). The 

evolution of  fintech: A new post-crisis paradigm? 
Georgetown Journal of  International Law, 47(4), 1271-1319.

Barro, R. J. (1991). Economic growth in a cross-section 
of  countries. Quarterly Journal of  Economics, 106(2), 
407-443.

Central Bank of  Nigeria. (2020). Annual report on mobile 
payment transactions.

Choi, S. P., Stahl, D. O., & Whinston, A. B. (2017). The 
economics of  electronic commerce. Mack Center for 
Technological Innovation.

Desalegn, T. L. (2020). Web transactions and economic 
growth: A critical evaluation of  Ethiopia’s landscape. 
African Economic Review, 8(1), 13-29.

Enhancing Financial Innovation & Access (EFInA), (2018). 
Access to financial services in Nigeria 2018 survey.

Folorunso, B. A., & Ikpefan, O. A. (2018). Financial 
technology and economic growth in Sub-Saharan 
Africa: An interrogation of  the empirical evidences. 
Journal of  Banking and Financial Dynamics, 3(4), 45-60.

Gorton, G., & Metrick, A. (2012). Securitized banking 
and the run on repo. Journal of  Financial Economics, 
104(3), 425-451.

Greenhalgh, T., Robert, G., Macfarlane, F., Bate, P., & 
Kyriakidou, O. (2004). Diffusion of  innovations 
in service organizations: Systematic review and 
recommendations. The Milbank Quarterly, 82(4), 581-629.

GSMA. (2020). State of  the industry report on mobile money.
Gurley, J. G., & Shaw, E. S. (1955). Financial aspects of economic 

development. American Economic Review, 45(4), 515-538.
Kamau, A., & Waiganjo, E. (2016). Role of  mobile 

banking in the growth of  SMEs in Kenya. Kenyan 
Journal of  Business and Innovation, 12(4), 58-72.

Lee, I., & Shin, Y. J. (2018). Fintech: Ecosystem, business 
models, investment decisions, and challenges. Business 
Horizons, 61(1), 35-46.

Lucas, R. E. (1988). On the mechanics of  economic 
development. Journal of  Monetary Economics, 22(1), 3-42.

McKinsey & Company. (2018). Global fintechs report.
Mutua, J. K., & Ouma, C. A. (2017). The impact of  mobile 

banking on financial inclusivity in Kenya. Journal of  
Financial Technology, 2(3), 45-58.

Nigerian Communications Commission. (2020). 
Telecommunications data: Internet subscribers by 
provider.

Nigerian Inter-Bank Settlement System (NIBSS). (2020). 
Instant payment transactions report 2019.

Obinna, O. C., & Uche, U. I. (2017). Digital payments 
and economic growth in Nigeria: Risks and rewards. 
Nigerian Journal of  Economic Research, 22, 18-31.

Ondrus, J., & Lyytinen, K. (2015). Mobile payments 
market: Towards another global tech bubble? 
Telecommunications Policy, 39(3-4), 221-232.

Patil, S., & Kumar, R. (2018). E-commerce and India’s 
economic growth: An analytical exploration. Indian 
Journal of  Commerce, 5(2), 34-47.

Phillips, P. C., & Hansen, B. E. (1990). Statistical inference 
in instrumental variables regression with I(1) 
processes. Review of  Economic Studies, 57(1), 99-125.

Rogers, E. M. (1962). Diffusion of  innovations. Free Press.
Romer, P. M. (1986). Increasing returns and long-run 

growth. Journal of  Political Economy, 94(5), 1002-1037.
Schueffel, P. (2017). Taming the beast: A scientific definition 

of  fintech. Journal of  Innovation Management, 4(4), 32-54.
Singh, R., & Agrawal, R. (2019). Mobile payments and 

India’s road to financial inclusion: A structural 
analysis. Asian Journal of  Financial Markets, 6(2), 34-49.

Solow, R. M. (1956). A contribution to the theory of  economic 
growth. Quarterly Journal of  Economics, 70(1), 65-94.

Statista. (2020). Nigeria: E-commerce market value 2014-2019.
Statista. (2021). Digital payment transaction value 

forecast worldwide from 2017 to 2021. Retrieved 
from https://www.statista.com

Tapscott, D., & Tapscott, A. (2016). Blockchain 
revolution: How the technology behind bitcoin is 
changing money, business, and the world. Penguin.

Teshome, A. (2021). Digital payments in Ethiopia: 
Opportunities and challenges. Ethiopian Journal of  
Innovation and Technology, 4(1), 45-61.

Wolfram, W. (2016). Reconsidering the diffusion of  
innovations: An examination of  the dynamics of  network 
externalities. Information Systems Journal, 26(2), 119-140.

World Bank. (2020). Nigeria: Overview. Retrieved from 
World Bank website.

Zavolokina, L., Dolata, M., & Schwabe, G. (2016). 
FinTech – What’s in a name? In Proceedings of  the 
37th International Conference on Information Systems (ICIS 
2016), Dublin, Ireland.

Zhang, B., Guo, Y., & Chen, P. (2016). Mobile payment: 
The origins, the technologies, and the business 
models. Electronic Commerce Research and Applications, 
20, 141-150.


