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


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

Full Text:



Antwi, S., Kasim, H. & Wusah, B. S. (2019). Examining the Effectiveness of Electronic Payment System in Ghana: The Case of eZWICH in the Tamale Metropolis. Research Journal of Finance and Accounting, 6, 163-177.

Assalam, O. (2017). Technological Innovations and its Impact on Firm Performance in Financial Sector of Pakistan. Telematics and Informatics Journal, 19, 315-330.

Bazmi, N., Nazir, M. & Raza, A. (2019). Effect of Plastic Money on the Performance of Banking Sector of Bangladesh. Journal of Research in Economics and International Finance, 4(1), 22 – 26.

Bernal, M. V. (2017). Retail payments innovations in Peru: Modelo Peru and financial inclusion. Journal of Payments Strategy & Systems, 10(4), 343-351.

Capital Markets Authority (2017). Capital Markets Authority Nairobi Securities Exchange (NSE). Retrieved from

Central Bank of Kenya (2016). Bank Supervision Annual Report 2016. Retrieved from

Central Bank of Kenya (2021). Bank Supervision Annual Report. Retrieved from

Chen, L.F., Hsish, H.C., & Teng, C.H. (2018). Applying the Diffusion of Innovation Theory to Improve the Prevalence of Use of a Disease Management Information System. The Journal of Nursing, 65(4), 109–116.

Hora?iu L. & Pineta. A. (2019). Operational Risk in Regis: A Systemically Important Payment System. Retrieved from

Jamshidi, D., & Hussin, N. (2016). Islamic Credit Card Adoption Understanding: When Innovation Diffusion Theory Meets Satisfaction and Social Influence. Journal of Promotion Management, 22(6), 897–917.

Jenevive, O.C. & Anyanwaokoro, M. (2017). Electronic Payment Methods and Profitability of Banking Firms in Nigeria: A Panel Data Analysis. International Journal of Finance and Accounting, 6(3), 67-74.

Kamal, A. M. A. (2017). Electronic Credit Cards Usage and Their Impact on Bank’s Profitability: The Rate of Return on Owners Payment cards Model. Interdisciplinary Journal of Contemporary Research in Business, 4(7), 828-841

Kyalo, F. (2017). The Effect of Credit Card Usage on the Financial Performance of Commercial Banks in Kenya. Prime Journal of Technology, 20, 4456-4460

Makio, J.W. (2019). A Survey of the Factors Affecting the Use of Credit Cards: A Case Study of Postbank. Journal of Economics and Finance, 5, 6-20.

Marya, S. & Tortell, C. (2016). The Evolution of the Retail Payment Market – A Focus on Malta. Contemporary Studies in Economic and Financial Analysis, 97, 199 – 225.

Muiruri, J.K. & Ngari, J.M. (2020). Effects of Financial Innovations on the Financial Performance of Commercial Banks in Kenya. International Journal of Humanities and Social Science, 4(7), 51-78.

Naik, S. V., & Rathi, R. A. (2017). A Study of Financial Performance of Saraswat Co_operative Bank Ltd: A Case Study. CLEAR International Journal of Research in Commerce & ; Management, 6(12), 61–66.

Ngumi, P. M. (2020). Effect of bank innovations on financial performance of commercial banks in Kenya. Journal of Finance, 10, 34-78.

Okello, I. (2016). The effect of electronic retail payment services on financial performance of commercial banks in Kenya. Accounting, Business and Financial History, 14, 339-353.

Oladejo M. (2016). Epayments adoption and Profitability performance of Deposits Money Banks in Nigeria. International Journal of Information Technology, 4(3), 1-9

Onuorah, A.C. (2020). Automated Clearing System and the Banking Sector Performance: The Nigerian Experience. Journal of Business and Economics, 10, 43-62.

Rauf, S., Qiang , F. & Sajid, K.U.(2017). Electronic Debit Card Usage and their Impact on Profitability of Pakistan Banking Sector: ROA, Model. European Journal of Business and Management, 6(4), 1-7.

Scott, S., & McGuire, J. (2017). Using Diffusion of Innovation Theory to Promote Universally Designed College Instruction. International Journal of Teaching and Learning in Higher Education, 29(1), 119–128.

Tompkins, M. & Olivares, A. (2016). Clearing and Settlement Systems from Around the World: A Qualitative Analysis. Bank of Canada Staff Discussion Paper, 1-45.

Weber, J., & Gladstone, J. (2019). Rethinking the Corporate Financial-Social Performance Relationship: Examining the Complex, Multistakeholder Notion of Corporate Social Performance. Business & Society Review (00453609), 119(3), 297–336.

Were, M., & Wambua, J. (2018). What factors drive interest rate spread of commercial banks? Empirical evidence from Kenya. Review of Development Finance, 4, 73–82.

Yao, M. & Xianrong, X. X. (2018). Impact of payment technology innovations on the traditional financial industry: A focus on China. Technological Forecasting and Social Change, 135, 199-207.

Yran, B. D., Leonardo, G. Ibañez, D., Massunaga, S. & Sawaya, A. (2020). Creating value through credit card partnerships in Latin America. Journal of Electronic Commerce, 1, 3–23.


  • There are currently no refbacks.