Abstract:
The purpose of the study was to examine the effect of digital payment system on profitability of financial institutions The specific objectives were: to examine the usefulness of digital banking system provided by Equity Bank Rwanda PLC, To access the effect of digital banking system on the profitability of Equity Bank Rwanda PLCTo find out the relationship between digital banking system and profitability of Equity Bank Rwanda PLC And for this study researchers used documentation and questionnaire technique for collecting data, However secondary data were analyzed using trend analysis and ratios analysis. In this study, data were collected from 52 Employees of Equity Bank Rwanda Head office Findings showed that Table 4.4 shows that out of 52 respondents (3.8) were disagreed and neutral, (9.6) were agreed and (86.5%) were strongly agreed with mean of 4.69 and 1.49 as standard deviation. The greatest number was in strongly agree, that Through mobile banking services, customers are satisfied with their Transactions ( deposit and withrows Table 4.8. shows that out of 52 respondent, (86.5%) of respondents were strongly agreed, (13.5%) of respondents was agreed, (1.9%) of respondents were disagreed Big number of perception (86.5%) was in strongly agreed position followed by (13. 5%) in agreed with .82as mean and .38239as standard deviation. This level indicates that Through Digital banking ICT enabled reliable new markets to grow the customer base, and new ways of delivering services. The table 4.14 shows that the total assets of Equity bank Rwanda PLC increased by 3.35% in 2019, 3.22% in 2020 and 2.70% in 2020 and 2.62% in 2022, This means that, in 2019 for 100 RWF invested Equity Bank Rwanda Main Branch got 3.35RWF and in 2020 for 100 RWF of invested they got 3.22RWF; in 2021 for 100 RWF of invested they got 2.70RWF, and in 2022 for 100 RWF of invested they got 2.62RWF The findings show that R which is the multiple correlation coefficients that shows quality of the prediction of the dependent variable by the independent variable is 0.908. This is a good indication since it points to a strong correlation. The R-Square which is the coefficient of determination shows that the four independent variables in the model explain 77.9% of Equity Bank Rwanda PLC’s performance. Subsequently from the Adjusted R Squared it is evident that after adjusting the model for inefficiencies the independent variables can explain 77.6% of the profitability in the bank under study.
