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Digital Payment Adoption and Operational Cost Reduction in Small Businesses
Subject area: Management and Commerce · Area of research: Business Management and Finance
Abstract
This study examined the relationship between digital payment adoption and operational cost reduction among small businesses in Paete, Pakil, Lumban, Siniloan, and Pagsanjan, Laguna. A mixed-methods approach involved a survey of 120 small business owners and interviews with selected participants. Parameters evaluated include demographic profiles, architectural deployment metrics (security, convenience, accessibility, and user acceptance), and operational cost factors. Quantitative data were analyzed using descriptive statistics, the Chi-Square Test of Independence, and Spearman’s rank-order correlation, while qualitative data underwent thematic analysis. Chi-square independence testing indicated no structural relationships between profile variables and technology adoption. Conversely, merchant age, formal education levels, and monthly revenues displayed highly significant linkages (p < 0.001) to localized cost reductions. All four dimensions of digital payment adoption were positively and significantly associated with operational cost reduction, with user acceptance showing the strongest relationship. Qualitative findings indicated that digital payments supported faster transactions, reduced cash handling, and minimized travel time and expenses, although internet expenses and transaction fees remained challenges. Overall, digital payment adoption was significantly associated with operational cost reduction among participating small businesses. These findings may guide business owners and payment providers in improving digital payment practices while providing a foundation for future research on digital payment adoption and operational efficiency in rural communities.
Keywords
digital payment adoption; operational cost reduction; small businesses; user acceptance
References
[1] Go RY, Aini N, Mutiarani T, Yolanda RO, Sarbinny N. The role of digital payment technology in improving retail operational efficiency: A review. KERNEL: Jurnal Riset Inovasi Bidang Informatika dan Pendidikan Informatika. 2025;6(1):43–51.
[2] Widayani A, Fiernaningsih N, Herijanto P. Barriers to digital payment adoption: Micro, small and medium enterprises. Management & Marketing. 2022;17(4):528–542.
[3] Creswell JW, Plano Clark VL. Designing and conducting mixed methods research. 3rd ed. Thousand Oaks (CA): SAGE Publications; 2018.
How to cite this paper
@article{1724545,
author = {Bagcus, Venice A., Letigar, Ashley Gail A., Guinungco, Normila S., Perez, John Anthony P., Magtibay, Aleli I.},
title = {Digital Payment Adoption and Operational Cost Reduction in Small Businesses},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {10},
number = {5},
pages = {87-95},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1724545.pdf},
abstract = {This study examined the relationship between digital payment adoption and operational cost reduction among small businesses in Paete, Pakil, Lumban, Siniloan, and Pagsanjan, Laguna. A mixed-methods approach involved a survey of 120 small business owners and interviews with selected participants. Parameters evaluated include demographic profiles, architectural deployment metrics (security, convenience, accessibility, and user acceptance), and operational cost factors. Quantitative data were analyzed using descriptive statistics, the Chi-Square Test of Independence, and Spearman’s rank-order correlation, while qualitative data underwent thematic analysis. Chi-square independence testing indicated no structural relationships between profile variables and technology adoption. Conversely, merchant age, formal education levels, and monthly revenues displayed highly significant linkages (p < 0.001) to localized cost reductions.
All four dimensions of digital payment adoption were positively and significantly associated with operational cost reduction, with user acceptance showing the strongest relationship. Qualitative findings indicated that digital payments supported faster transactions, reduced cash handling, and minimized travel time and expenses, although internet expenses and transaction fees remained challenges. Overall, digital payment adoption was significantly associated with operational cost reduction among participating small businesses. These findings may guide business owners and payment providers in improving digital payment practices while providing a foundation for future research on digital payment adoption and operational efficiency in rural communities.},
keywords = {digital payment adoption; operational cost reduction; small businesses; user acceptance},
month = {November},
}