Enhancing Small and Medium Enterprises’ Performance Through Digital Payments: Roles of Digital Payment Solutions in Ilorin-South Metropolis.

Abstract

This study examines how digital payment adoption impacts Small and Medium sized Enterprises (SMEs) in Ilorin-South, Nigeria, addressing challenges like cash-related risks and payment delays. Using a quantitative survey of 234 SME owners (sampled via Taro Yamane’s formula), the research analyzed mobile banking, Smartcards, and Internet banking effects on SME performance, measured by revenue, customer base, and operational efficiency. Discriminant validity (KMO > 0.7) and reliability (Cronbach’s Alpha > 0.7) were confirmed. Regression analysis revealed Smartcards drove 69.4% performance, mobile banking 67%, and Internet banking 38.3%, with ANOVA confirming Smartcards’ superior impact (p < 0.05). Mobile banking’s efficiency and accessibility made it the most influential. The study recommends SME owners prioritize mobile banking and Smartcards, while financial institutions and government collaborate on tailored solutions (e.g., rural-focused subsidies) and financial literacy programs via mobile platforms. Findings underscore digital payments’ role in enhancing SME scalability and financial inclusion