Electronic Debit Card Usage and their Impact on Profitability of Pakistan Banking Sector: ROA, Model

Abstract

Advancements in ICT (Information and Communication Technology) have become the heart of banking sector and indeed banking sector is a root cause of success for each economy. Its importance is absolutely evidenced from the current recession in European banks crisis. The influences of innovation, globalization and competition in the banking sector by its providers to offer their services make essential the understanding of how various aspect of advancements in technology especially in sense of debit card, credit cards, mobile banking, internet banking, ATM and much more can affect the profitability in both form of assets and equity belongs to shareholders. In this study we have endeavored to develop an integrated mathematical model to testify the impact of debit card usage on ROA of Pakistan banking industry by implying the regression analysis. The results have enlightened that increased in debit card usage enhance the profitability of banking industry in form of ROA over the period of 2004 to 2013 quarterly. Hence, this study along with limitations can be recommended further in the process of transforming paper based transactions to electronic based to reduce the cost and enhance the customer satisfaction through high quality of service delivery.

Keywords: Debit Card, ICT, ROA, Pakistan