The Role of Electronic Payment Methods in Enhancing Financial Inclusion

Year	Amounts (in Iraqi dinars)	Number of conversion transactions
2017	170,394,031,598	1,032,215
2018	386,401,630,041	1,036,374
2019	858,128,262,349	2,044,931
2020	1,402,301,877,536	5,192,534
2021	913,356,442,253	3,799,149
2022	1,069,699,244,744	5,483,198
2023	4,172,865,638,307	8,512,101

[i] Source: Authors’ own research based on statistics from the Central Bank of Iraq (https://cbi.iq/page/142)

Table 2.

Outlets providing financial services and wallets

Year	Number of ATMs	Number of electronic wallets	Number of POC points	Number of POS points
2017	656	222,442	5,143	918
2018	865	271,906	6,625	2,200
2019	1,014	403,797	11,677	2,226
2020	1,340	1,226,235	13,796	7,540
2021	1,566	2,107,265	14,704	8,329
2022	2,223	2,970,390	17,610	10,718

[i] Source: Authors’ own research based on statistics from the Central Bank of Iraq (https://cbi.iq/page/142)

Table 3.

Number and type of bank accounts in Iraq

Year	Number of company accounts	Deposit account number	Number of savings accounts	Number of current accounts
2017	91,460	20,811	634,280	614,483
2018	101,881	23,202	731,835	773,759
2019	355,904	83,612	1,446,969	1,153,037
2020	470,074	186,036	3,489,040	1,981,826
2021	573,205	191,955	3,915,175	2,016,322
2022	655,828	226,223	4,999,188	2,914,652

[i] Source: Authors’ own research based on statistics from the Central Bank of Iraq (https://cbi.iq/page/142)

Table 4.

The type and number of electronic cards used in Iraq, which was found to be quite small compared to the size of the population

Year	Number of electronic debit cards	Number of electronic credit cards	Number of prepaid cards	Number of electronic QI cards
2017	127,594	15,158	6,234,553	6,086,703
2018	872,894	22,067	7,915,069	6,639,582
2019	1,460,891	38,883	9,006,951	1,819,901
2020	2,811,503	46,469	8,891,436	1,384,677
2021	5,083,997	50,927	9,771,370	-
2022	5,430,434	61,320	10,711,017	-

[i] Source: Authors’ own research based on statistics from the Central Bank of Iraq (https://cbi.iq/page/142)

Table 5.

Financial inclusion – Dimensions

S. No	Financial inclusion dimension	References
	Use	(Pesqué-Cela et al., 2021; Sharma and Changkakati, 2022)
	Availability	(Firas Farhan, 2022; Prasuna, Kasturi and Annemalla, 2024)
	Easy access	(Pesqué-Cela et al., 2021; Sharma and Changkakati, 2022)
	Costs and commissions	(Pesqué-Cela et al., 2021; Damra, Yasin and Albaity, 2023)
	Awareness and consumer protection	(Pesqué-Cela et al., 2021; Shastri, 2023)
	Quality of banking service	(Pesqué-Cela et al., 2021; Sharma and Changkakati, 2022)

[i] Source: Authors’ own research

Research model adopted for the study
Source: Authors’ own research

Table 6.

Descriptive statistics

*Construct*	*Not.*	N	*Mean*	SD	*Skewness*	*Kurtosis*
Payment method	PAY	958	4.594	0.362	−0.497	−0.919
Mental image and perception	MEN	958	4.453	0.417	−0.236	−0.992
Use of banking services	USE	958	4.532	0.530	−0.862	0.316
Availability of banking services	AVAIL	958	4.528	0.355	−0.464	0.594
Easy access to banking services	ACC	958	4.108	0.662	−0.126	−1.214
Costs and commissions	COST	958	4.352	0.473	−0.639	0.244
Awareness and consumer protection	AWAR	958	4.284	0.593	−0.546	0.378
Quality of banking service	QUAL	958	4.326	0.443	−0.175	−0.672
Electronic payment methods	ELEC	958	4.524	0.364	−0.246	−1.423
Financial inclusion	FIN	958	4.355	0.415	−0.384	−0.015

[i] Source: Authors’ own research based on statistics from the Central Bank of Iraq (https://cbi.iq/page/142)

Table 7.

Measurement model

Construct	Item	Cronbach’s Alpha	rho_ A	CR	AVE	Loading
Payment method	PAY1	0.799	0.855	0.855	0.472	0.893
	PAY2					0.590
	PAY3					0.500
	PAY4					0.756
	PAY5					0.477
	PAY6					0.573
	PAY7					0.882
Mental image	MEN1	0.887	0.907	0.907	0.459	0.684
	MEN2					0.828
	MEN3					0.463
	MEN4					0.746
	MEN5					0.687
	MEN6					0.775
	MEN7					0.406
	MEN8					0.726
	MEN9					0.662
	MEN10					0.723
	MEN11					0.801
	MEN12					0.468
Use of banking services	USE1	0.751	0.798	0.861	0.677	0.728
	USE2					0.956
	USE3					0.765
Availability of banking services	AVAIL1	0.66	0.669	0.776	0.416	0.617
	AVAIL2					0.637
	AVAIL3					0.451
	AVAIL4					0.731
	AVAIL5					0.746
Easy access to banking services	ACC1	0.799	0.805	0.872	0.634	0.879
	ACC2					0.853
	ACC3					0.807
	ACC4					0.619
Costs and commissions	COST1	0.765	0.826	0.84	0.523	0.826
	COST2					0.822
	COST3					0.852
	COST4					0.504
	COST5					0.529
Awareness and consumer protection	AWAR1	0.871	0.916	0.903	0.616	0.922
	AWAR2					0.611
	AWAR3					0.865
	AWAR4					0.743
	AWAR5					0.910
	AWAR6					0.586
Quality of banking service	QUAL1	0.8	0.828	0.858	0.505	0.737
	QAUL2					0.668
	QUAL3					0.673
	QUAL4					0.617
	QUAL5					0.644
	QUAL6					0.891

[i] Source: Authors’ own research

Table 8.

Discriminant validity

	1	2	3	4	5	6	7
1. Availability of banking services
2. Awareness and consumer protection	0.740
3. Costs and commissions	0.867	0.832
4. Easy access to banking services	0.889	0.929	0.967
5. Mental image and perception	0.894	0.823	0.992	0.837
6. Payment method	0.976	0.578	0.910	0.673	0.989
7. Quality of banking service	0.725	0.688	0.726	0.704	0.868	0.704
8. Use of banking services	0.631	0.633	0.876	0.646	0.947	0.775	0.71

[i] Source: Authors’ own research

Visualization of scatter plots, distributions and correlations
Source: Authors’ own research

Structural model (Main Hypothesis)
Source: Authors’ own research

Structural model (sub-hypothesis)
Source: Authors’ own research

Table 9.

Path coefficients and hypothesis testing

H	*Path*	B	*t-value*	*P-value*	*95% Bias-Corrected CI*		Remark
H	*Path*	B	*t-value*	*P-value*	LB	UB	Remark
H1	Electronic payment methods -> Financial inclusion	0.836	60.02	< 0.000	0.808	0.862	Supported
H1.1	Electronic payment methods -> Use of banking services	0.749	45.03	< 0.000	0.714	0.779	Supported
H1.2	Electronic payment methods -> Availability of banking services	0.747	64.31	< 0.000	0.723	0.768	Supported
H1.3	Electronic payment methods -> Easy access to banking services	0.744	57.51	< 0.000	0.719	0.77	Supported
H1.4	Electronic payment methods -> Costs and commissions	0.871	107.42	< 0.000	0.853	0.885	Supported
H1.5	Electronic payment methods -> Awareness and consumer protection	0.704	42.12	< 0.000	0.671	0.737	Supported
H1.6	Electronic payment methods -> Quality of banking service	0.684	51.36	< 0.000	0.657	0.709	Supported

[i] Source: Authors’ own research

Visualization of effect size
Source: Authors’ own research

Table 10.

Structural model assessment

Independent Variable	Dependent Variable	R Square	Q Square	F Square	VIF
Electronic payment methods	Financial inclusion	0.699	0.259	2.32	1
	Availability of banking services	0.558	0.211	1.26	1
	Awareness and consumer protection	0.495	0.259	0.98	1
	Costs and commissions	0.758	0.388	3.14	1
	Easy access to banking services	0.554	0.299	1.24	1
	Quality of banking service	0.468	0.220	0.88	1
	Use of banking services	0.560	0.371	1.27	1

Visualization of R-Square (R²) and Q-Square (Q²)
Source: Authors’ own research

	The role of electronic payment methods in enhancing financial inclusion
	Electronic payment methods
	The first dimension: payment method
1	Paying employees’ salaries through electronic means is a civilized and advanced phenomenon.
2	Paying salaries electronically will increase banking awareness among the bank’s audience and encourage them to use financial services for purchases instead of receiving it in cash.
3	The commission deducted from the employee’s salary is reasonable in exchange for the bank’s services in the electronic payment process.
4	Electronic payment machines (ATM, POS) are available in many places close to my work or residential place.
5	Banking operations are carried out through electronic payment devices without errors.
6	Electronic payment devices accommodate salaries in proportion to the number of employees.
7	I find it easy to use electronic payment methods.
8	Multiple geographical locations for electronic payment methods.
9	Diversity of banking services via electronic payment methods.
10	I receive a free message directly from the bank after the salary is posted in my bank account.
11	Funds are constantly available at payment machines (ATMs) and meet cash withdrawal requirements.
12	After every withdrawal or deposit to my salary bank account, the bank deducts an annual sum of money from the notification letters I receive.
13	Customer service is available 24 hours a day, 7 days a year, when you contact them to solve a specific problem.
	The second dimension, Mental image and perception
14	Electronic payment methods are of high quality and satisfy me.
15	I feel anxious and uncomfortable dealing with private banks.
16	I feel comfortable when dealing with government banks.
17	Private bank management responds quickly to customer needs.
18	The provision of banking services by private banks is according to the specified dates.
19	The banking services provided through electronic payment methods suit my needs and desires.
20	My inquiries and complaints were answered quickly by specialists in private banks.
21	I feel anxious and apprehensive during the withdrawal and deposit process via electronic payment methods.
22	I need to help others when using electronic payment methods (ATM).
23	Private banks provide a variety of credit facilities to employees whose salaries are paid by the bank.
24	Ease of procedures for obtaining electronic payment cards (MasterCard).
25	The salary is transferred to my bank account on the same date every month without delay.
	Financial inclusion
	The first dimension: use of banking services
26	I have a bank account designated for salaries, and the organization I work for transfers the salary to it monthly.
27	I receive some financial dues in cash from the organization I work for, but they are not transferred to my bank account.
28	Most workers in the private sector have a bank account.
29	The bank grants various loans to employees.
30	I can use electronic payment tools in my marketing operations daily.
31	I can use electronic platforms to make electronic payments.
32	The bank I deal with is contracted with international security companies specializing in monitoring operations — banking to prevent customers from being exposed to scams and fraud.
	The second dimension: the availability of banking services
33	There are many branches of most banks in different places.
34	Automated teller machines (ATMs) are widely spread.
35	Most sellers prefer to use electronic payment methods.
36	The bank issues various cards.
37	We use electronic wallets provided by banks on their platforms.
38	I cannot withdraw the amount I want due to the unavailability of the cash denomination in the ATM, which forced me to change the number of the amount I want to receive.
	The third dimension: the ease of access to banking services
39	The account opening requirements are easy and quick.
40	The requirements for obtaining a loan are easy.
41	Many banking services can be accessed.
42	The bank I deal with seeks to enhance trust with its customers to encourage them to use its banking services.
43	The bank provides detailed information about any service I want and what procedures are followed to obtain it.
	The fourth dimension: costs and commissions
44	The bank imposes small costs and commissions on electronic banking operations to withdraw funds or transfer them to another account.
45	Small costs are deducted if I withdraw my salary from a bank machine belonging to a bank other than the bank from which my credit card was issued.
46	The bank charges low interest on the loans it provides to customers.
47	The bank offers good interest on the salary amount if it is not withdrawn in a large amount from the account within ten days after the salary is credited to the account.
	The fifth dimension: awareness and consumer protection
48	The bank carries out advertising campaigns to educate customers about depositing their money in banks and what interest they will receive from it.
49	The bank offers educational programs on making financial withdrawals from the ATM and transferring money to another account.
50	The bank provides awareness programs to customers on how to use the bank’s electronic platform and benefit from all its services.
51	The bank provides awareness programs through media campaigns on how to avoid exposure to fraud.
52	The bank provides awareness programs on the usefulness of banking services in daily transactions.
53	The bank demonstrates the suitability of its financial services to customers’ needs.
54	The sixth dimension: quality of banking service
	The bank provides financial services that satisfy my needs and are of high quality.
55	The services provided by the banker are clear and transparent.
56	The bank informs me of the information I request when inquiring about any service.
57	The bank I deal with is characterized by transparency and credibility and announces its data in detail in the annual report.

References

Authors

Metrics

Articles in this issue

DOI: https://doi.org/10.2478/ceej-2025-0019 | Journal eISSN: 2543-6821 | Journal ISSN: 2544-9001

Journal RSS Feed

Language: English

Page range: 314 - 337

Submitted on: Jul 8, 2025

Accepted on: Sep 29, 2025

Published on: Nov 7, 2025

Published by: Faculty of Economic Sciences, University of Warsaw

In partnership with: Paradigm Publishing Services

Keywords:

electronic payment methods,

financial inclusion,

banking institutions,

digital payment,

banking service quality

JEL:

G21,

O16,

O33

Related subjects:

Business and economics,

Political economics,

Economic theory, systems and structures,

Microeconomics,

Macroeconomics,

Economic policy

© 2025 Maysaa saad Jawad Huby, Lamyaa Ali Ibrahim, Ali Abdulhassan Abbas, published by Faculty of Economic Sciences, University of Warsaw
This work is licensed under the Creative Commons Attribution 4.0 License.

Volume 12 (2025): Issue 59 (January 2025)

The Role of Electronic Payment Methods in Enhancing Financial Inclusion

Figures & Tables

Table 1.

Table 2.

Table 3.

Table 4.

Table 5.

Figure 1.

Table 6.

Figure 2.

Table 7.

Table 8.

Figure 3.

Figure 4.

Figure 5.

Table 9.

Figure 6.

Table 10.

Figure 7.

Paradigm

My account