NAVIGATING THE DIGITAL PAYMENT LANDSCAPE IN MALAYSIAN SMES: POST-COVID-19 CHALLENGES AND KEY DRIVERS OF ADOPTION

Abstract

This study aims to examine the relationships between perceived consumer purchase behaviour, technological readiness, and merchant and government support in driving the adoption of digital payments by Malaysian small and medium enterprises (SMEs) after the COVID-19 pandemic. The objectives are to provide data-driven insights into the factors enabling the transition to cashless transactions and Fintech solutions. The study surveyed 211 SME owners/managers in the Klang Valley, Malaysia, via questionnaires. The target population consisted of SMEs operating in sectors like food and beverage, retail, professional services, and manufacturing within the Klang Valley. The findings revealed that perceived technological readiness had a statistically significant positive relationship with digital payment adoption among the SMEs surveyed. However, perceived consumer purchase behaviour and merchant/government support did not show significant relationships with adoption. The implications suggest that enhancing SMEs' technological capabilities through infrastructure upgrades, employee training, and system compatibility is crucial for driving cashless adoption. Financial institutions can leverage these insights to design user-friendly digital payment solutions tailored to SME needs. SME owners can benefit by understanding areas requiring improvement in technological readiness for successful digital payment integration. Policymakers gain valuable information to create enabling environments through regulations, awareness campaigns, and support mechanisms. Ultimately, increased digital payment adoption by SMEs can enhance consumer convenience, financial inclusion, operational efficiency, and economic resilience. The study highlights collaborative efforts among stakeholders as vital for fostering a conducive ecosystem for SMEs' digital transformation. Article visualizations: