Impact of Digital Payment on Financial Inclusion in Nigeria (2009-2024)

This study investigates the impact of digital payment on financial inclusion in Nigeria. In recent years, the adoption of various digital payment sytems has surged, raising questions about its influence in improving financial Inclusion. Through a comprehensive analysis of existing literature and empirical evidence, this research explores the implications of various digital payment systems in the financial sector. This study uses Quarterly time series data from 2009Q1 to 2023Q4 to investigate the impact of digital payment on access to financial services in Nigeria and also to ascertain the causal relationship between ATM and access to financial services in Nigeria. The study begins by assessing the stationarity of the data using the Augumented Dickey Fuller (ADF)unit root test, which shows that the variables were stationary at first differences and second differences. Following this, the Johansen cointegration test was conducted, revealing that there was a shortrun relationship among the variables. The findings in the study indicates that digital payment and financial inclusion has a positive relationship and impact which conforms to the findings of previous studies. Also, a Granger causality test was conducted to test for causality between Automated Teller Machine (ATM) proxied for digital payment and Depositors with commercial bank(per 1000 adults) proxied for financial inclusion; the result showed that there was a causal relationship between variables. The study concludes that while digital payment positively impacts financial inclusion, the impact of various digital payment systems on the financial sector is not fully harnessed. Consequently, recommendations include developing a comprehensive incentive framework, strengthening consumer protection, investing in rural digital infrastructure and boosting digital and financial literacy programs.