Impact of Automated Teller Machine and Point of Sale Usage on Financial Performance of Deposit Money Banks in Nigeria

The emergence ofAutomated Teller Machine (ATM) and Point of Sale (POS), in the banking sector have discouraged the need to physically carry cheques to withdraw and pay money from ones accounts. Technological development in the banking system that saw and increase in the operations of financial market and cashless transaction, all that is needed is to slot the card, provide the required password and the transaction will be executed. Even though rapid advancement in the information technology has made banking services more reliable technological Investment has consumed more banks capital. Therefore, this study set out to investigate the impact of Automated Teller Machine and Point of Sale Terminals usage on the financial performance of deposit money banks in Nigeria between 2005Q1- 2019Q4. The data used for this study were sourced from the Central Bank of Nigeria (CBN) statistical bulletin, and annual statement of accounts of deposit money banks. The results show that all electronic payment indicators of Point-of-Sale Terminals and Automated Teller Machine positively and significantly affect the Return on Asset of financial performance. In order to avoid spurious regression effects, pre-estimation tests were performed on each of the variables using the Augmented Dickey Fuller unit root test; while the empirical analysis was carried using the Non-linear Autoregressive distribution lag (ARDL) error correction model method. Findings from study revealed that the joint positive and negative asymmetric impact of Automated Teller Machine usage on Return on Asset of banks in Nigeria is statistically significant. The study further showed that the joint positive and negative effect of Point-ofSale Terminals has a statistically significant effect on Return on Asset. This relationship showed that the more the patronage associated with Point-of-Sale Terminals payment method, the higher the volume of transactions and ultimately the higher the profits recorded by the banks. The result lastly revealed that the asymmetric impact of mobile payments on Return on Asset is statistically significant. Based on the findings, the study recommends that commercial banks in Nigeria should increase the awareness about Automated Teller Machine usage through media campaign, seminars and symposia. More electronic payment devices like Point-of-Sale Terminals should be acquired and installed in remote areas to facilitate quick banking transactions and banking inclusion so as to further increase bank earnings.