This study examines the impact of the Central Bank of Nigeria’s cashless policy on the development of Nigerian banking sector. A survey design was adopted, and data were collected from 80 employees of Ecobank Nigeria Plc, United Bank for Africa, Guaranty Trust Bank, and First Bank of Nigeria Plc using a structured questionnaire. Data were analysed using descriptive statistics, mean, standard deviation, and chi-square tests. Results indicates that respondents perceived the cashless policy to have positively influenced bank performance and service quality, with 95% agreeing that the policy’s channels improved operational outcomes. Chi-square analysis showed a significant positive relationship between the cashless policy and bank development, _p_ < 0.001, and between the policy and service quality, _p_ < 0.05. Perceived challenges to cashless policy adoption were not statistically significant considering a p-value, _p_ = 0.061. The study concludes that the cashless policy has enhanced perceived bank performance and service delivery. It recommends that banks incorporate financial literacy into their marketing strategies and offer incentives and tailored products to encourage sustained adoption of cashless channels.  

Keywords: Cashless policy, electronic payment, bank performance, service quality, Nigeria