Prague Economic Papers 2026, 35(3):446-475 | DOI: 10.18267/j.pep.914

Digital Payment Channels and Fintech Performance in Kosovo: An Econometric Analysis Using HAC-GMM

Nexhat Kryeziu ORCID..., Esat Durguti ORCID...
Nexhat Kryeziu, MBE - University for Business and Technology - Prishtinë, Kosova
Esat Durguti (Corresponding author), Faculty of Economics - University Isa Boletini - Mitrovicë, Kosova

This research paper analyzes the impact of digital payment channels on fintech performance in Kosovo using monthly data from the Central Bank of Kosovo for the period 2018-2024. The analysis covers several key categories of financial transactions, specifically Credit Transfers in Paper Form (CTPF) and in Electronic Form (CTEF), Electronic Funds Transfers at Point of Sale (EFTPOS), Automated Teller Machine (ATM) based operations, including ATM Cash Withdrawals (ATMW) and ATM Deposits (ATMD), Credit Transfers via ATMs (CTATMs), as well as Cash Withdrawals and Card Payments at POS terminals (CWPOS and CPPOS). The empirical methodology relies on Ordinary Least Squares (OLS) and Heteroskedasticity and Autocorrelation Consistent Generalized Method of Moments (HAC-GMM) estimators. Variables identified as I(1) were differenced before estimation, while structural breaks (COVID-19, post-pandemic) and regulatory milestones (2022 e-payment reforms) were incorporated into the model. The empirical findings indicate that electronic credit transfers, ATM deposits, and POS terminal card payments have a statistically significant positive effect on the volume of online transfers, which serves as a proxy for fintech performance. In contrast, paper-based credit transfers (CTPF), EFTPOS transactions, ATM cash withdrawals (ATMW), and cash withdrawals at POS terminals (CWPOS) have negative effects. In contrast, credit transfers conducted through ATMs (CTATMs) show no statistically significant impact. The results highlight the essential function of complete digital tools and transitional methods in facilitating financial inclusion, at the same time pointing out that such inclusion remains hindered by the structural and behavioral barriers associated with cash dependency. The study contributes to the academic literature in three main ways. First, it provides the most comprehensive transaction-level assessment of digital payments in Kosovo using official Central Bank of Kosovo data. Second, it employs advanced econometric techniques, particularly HAC GMM, to generate detailed and robust estimates of financial impacts. Third, it integrates the Technology Acceptance Model and Diffusion of Innovations theory with empirical financial behavior, offering an innovative analytical framework for understanding the interaction, substitution, and complementarity among payment channels in emerging markets. Policy recommendations included the acceptance of cards and the use of electronic transfers, the linking of ATM deposits with mobile banking, and the decrease of cash reliance through pricing strategies and the implementation of financial literacy programs.

Keywords: Fintech, digital payments system, financial innovation.
JEL classification: G23, G28

Received: July 27, 2025; Revised: February 18, 2026; Accepted: April 10, 2026; Prepublished online: September 8, 2026; Published: September 10, 2026  Show citation

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Kryeziu, N., & Durguti, E. (2026). Digital Payment Channels and Fintech Performance in Kosovo: An Econometric Analysis Using HAC-GMM. Prague Economic Papers, 35(3), 446-475. doi: 10.18267/j.pep.914
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