Effect of Payment Services On Financial Performance of Bank of Kigali PLC
DOI:
https://doi.org/10.53819/81018102t2553Abstract
The rapid digitalization of the financial sector has positioned payment services as a critical driver of banking competitiveness, yet their specific impact on institutional financial performance in emerging markets requires empirical validation. This study examined the effect of payment services on the financial performance of commercial banks in Rwanda, using Bank of Kigali PLC as a case study. The objectives were to assess the influence of bill payments, money transfers, mobile money integration, and recurrent payments on economies of scale, customer growth, and profitability. Adopting a descriptive and correlational research design, primary data were collected from 138 agency banking agents using structured questionnaires. Data were analyzed using descriptive statistics and linear regression. Findings revealed that respondents perceived payment services as highly efficient and conducive to financial performance, although agent commission satisfaction remained low. Regression analysis demonstrated a strong positive relationship, with payment services explaining 93.4% of the variance in financial performance. The study concludes that payment services significantly enhance financial performance through cost efficiency and customer expansion. It recommends that Bank of Kigali PLC strengthen agent training, review commission structures to align incentives, and leverage data analytics for service innovation. These insights contribute to strategic decision-making for sustainable growth in Rwanda's digital banking landscape.
Keywords: Payment Services, Financial Performance, Agency Banking, Bank of Kigali, Digital Transformation
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