The rapid diffusion of technology and internet use has led banks to consider introducing digital payment services such as internet banking. This paper seeks to test the impact of internet banking adoption on the banking sector’s financial performance in Morocco for the period 2015–2022. An Autoregressive Distributed Lag (ARDL) model was employed to evaluate the short-run and long-run impact of internet banking. Secondary data was gathered from Central Bank of Morocco, High Commission for Planning and Centre Monétique Interbancaire. We used ROA to represent the banking sector’s financial performance and internet banking transactions as a proxy for internet banking. Based on the analysis provided by the ARDL model, internet banking is significant and negative in the short-run which suggests that its adoption hurts the banking industry’s profitability. However, in the long-run, there’s evidence of a positive but weak impact. We conclude that internet banking is a long-term investment that initially decreases the profitability of the banking sector but contributes to the financial performance in the long-run.