PAYMENT CARDS AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS LISTED AT NAIROBI SECURITIES EXCHANGE IN KENYA

Kyalo Susan Mukulu, Dr. Joshua Matanda, Dr. Hesbon Otinga

Abstract


Even though commercial banks in Kenya have over the years reported an increase in profitability, in the last five years (2014-2019) some have reported losses while others reported profits. In an effort to improve efficiency and reduce cost service delivery, commercial banks have adopted the payment cards. The study therefore sought to investigate the influence of the payment cards on the financial performance of commercial banks listed at Nairobi Securities Exchange. This study used casual research design. This research was conducted in listed commercial banks in Kenya and a covered a period of 5 years on monthly basis, starting from 2018 to 2022. This period was selected due to availability of data. In addition, this study used secondary time-series data. This data was obtained from central bank of Kenya and capital market authority. The secondary data was collected by use of a data extraction checklist. The data collected was quantitative in nature (continuous data), which was edited, coded and entered into a Stata version 15 for analysis. Both descriptive and inferential statistics were used to analyze quantitative data. In descriptive statistics, the study used frequency distributions, mean, standard deviation and percentages. In addition, correlation analysis and regression analysis were conducted after diagnostic test. Regression analysis indicated a positive and significant effect of payment cards on financial performance of commercial banks listed at Nairobi Securities Exchange. The study recommends that commercial banks in Kenya should increase the utilization of payment cards including point of sales machines, automated teller machines and credit cards. This can be done by reducing the requirements of credit cards issuance. Point of sales machines utilization can be increased by reducing the requirement for issuance and increasing acceptability in retail chains, pharmacies, petrol stations among other retailers.

Key Words: Payment Cards, Financial Performance, Automated Teller Machines


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