Financial Technology Innovations and Demand for Money in Nigeria

Most developing economies are faced with the new wave of financial globalization and Nigeria is one of such. Primarily, this paper examined the effect of financial technology innovations on money demand in Nigeria between 2009 and 2025. Secondary data were sourced on Automated Teller Machine (ATM) transactions, Mobile Payments (MOP), Point-of-Sale (POS) transactions, Web Payments (WEP) and money demand measured by Broad Money Supply (M2) from the Central Bank of Nigeria Statistical Bulletin and the Nigeria Inter-Bank Settlement System Annual Reports. Using analytical methods like descriptive statistics and the Error Correction Models, the results showed that MOP had a positive and statistically significant effect on broad money supply, whereas ATM and POS transactions exerted positive but insignificant effects. Web Payments had a negative and insignificant long-run effect but a significant negative short-run effect. Also, there were indications that approximately is 38.55 % of short-run disequilibrium is corrected annually. The policy implication of these outcomes is that proper adaptation of financial technology can enhance money demand in Nigeria especially through the mobile payments channel in the long run. It is thus recommended among others that the financial sector regulators should strengthen digital payments’ infrastructure by integrating fintech developments into monetary policy formulation for sustained economic prosperity.