Electronic payment system and financial sustainability of tertiary institutions in Nigeria

PurposeAddressing the challenges of financial sustainability in tertiary institutions through the adoption of technology was the central motivation of this study. Hence, the authors assessed the direct effect of the adoption of electronic payment system (EPS) on financial sustainability and the indirect mediating influence of technological capabilities on this relation.Design/methodology/approachSample of 223 non-academic employees in twelve higher institutions were selected. The authors used primary data through the use of a questionnaire for data collection. Partial least square structural equation model (SmartPLSv3) was used for the analysis of the study.FindingsThe adoption of electronic payment system was shown to have a significantly positive effect on financial sustainability of tertiary institutions. It was also found that technological capabilities affect financial sustainability of tertiary institutions and technological capabilities mediate the relationship between the adoption of electronic payment solution and financial sustainability of tertiary institutions.Practical implicationsThe study advances the need for incorporating technology as a measure in advancing the internal financial management practices of tertiary institutions in developing economies.Originality/valueThe authors developed a model that advances a new perspective to higher education financial sustainability through advocating for technological capabilities development as a channel to ensure liquidity and solvency of higher education, most especially in developing economies.