A Comparative Analysis of Transaction Costs, Fraud Rates and Customer Adoption of E- Payment Market in Nigeria, 2018-2024
DOI:
https://doi.org/10.5281/zenodo.23539922Keywords:
Transaction cost, Fraud rate, Customer adoption, E- Payment MarketAbstract
This study examined the influence of electronic fraud and transaction costs on e-payment usage in Nigeria. The study was motivated by the rapid expansion of electronic payment channels alongside persistent concerns about fraud and the cost of digital transactions. Specifically, the study examined the individual effects of electronic fraud rate and actual electronic fraud losses on e-payment usage and assessed the joint influence of electronic fraud rate and electronic transaction costs. The data were obtained from the Central Bank of Nigeria (CBN), Nigeria Inter-Bank Settlement System (NIBSS), and National Bureau of Statistics (NBS). The study adopted an ex-post facto research design and relied on secondary quarterly data on e-payment usage, electronic fraud rate, actual fraud losses and transaction costs for the study period. Autoregressive Distributed Lag (ARDL) estimation was employed to examine the relationships among the variables. The findings revealed that electronic fraud rate had a positive but statistically insignificant effect on e-payment usage, while actual electronic fraud losses had a negative but statistically insignificant effect. However, electronic transaction costs exerted a negative and statistically significant effect on e-payment usage (β = −140.4428; p = 0.0014). The joint estimation further showed that electronic fraud rate and transaction costs significantly influenced e-payment usage, with both variables exhibiting negative effects (FR: β = −1,007,724; p = 0.0030; TC: β = −336.8657; p = 0.0004). The study concludes that transaction affordability constitutes a more immediate constraint on aggregate e-payment usage, while fraud becomes statistically consequential when considered jointly with transaction costs. The study recommends an integrated secure-and-affordable payment strategy involving reduced transaction charges, strengthened fraud detection, consumer protection and improved payment-system trust.
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Copyright (c) 2026 Okonkwo, Ikeotuonye Victor, Ibeanusi Sylvanus Chigozie, Nwokike David Chekwube (Author)
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