Banks’ FinTech Channels and Monetary Policy in Nigeria’s Payment System

This study investigates the impact of FinTech on the monetary policy dynamics of the four major payment channels of banks in Nigeria, namely the automated teller machine (ATM), mobile payment (MOBPAY), web payment (WEBPAY), and Point-of-Sale (POS), from 2012 to 2025. The paper employs the Autoregressive Distributed Lag (ARDL) bounds testing approach to examine the relationships between the variables, whilst conducting a robustness check using dynamic ordinary least squares (DOLS). The study shows that POS transaction values have a positive and statistically significant impact on both the monetary policy rate (MPR) and the treasury bill rate (TBR). The findings also indicate that the savings deposit rate (SDR) increases both the MPR and the TBR, whereas the maximum lending rate (MLR) does not affect these policy rates. Mobile payments lead to significantly lower treasury bill and monetary policy rates. These findings empirically affirm that FinTech channels have expanded over the years, driven by the central bank’s cashless policy and banks’ response to the introduction of FinTech start-ups into the financial system. Thus, FinTech channels are important determinants of monetary policy transmission, justifying the need for the monetary authority to examine channel-specific sensitivities to its effectiveness in Nigeria’s fast-growing digital payment ecosystem.