The impact of electronic payment systems on financial performance of small and medium-sized enterprises: A field study on a developing country

Small and medium-sized enterprises (SMEs) play a crucial role in the Somalian economy, helping to create jobs, spur innovation, and reduce poverty. Many small and medium-sized enterprises (SMEs), however, have difficulty gaining access to conventional banking and other forms of formal financial services. Somalia's reliance on cash-based transactions limits the country's economic potential, slows the country's development, and puts small and medium-sized enterprises at danger. These problems might be solved and the financial landscape for SMEs completely revamped with the adoption of electronic payment systems. After collecting information from participants, we used SPSS V25.0 to analyze the results. Both descriptive and inferential methods will be used in the study. The mean, standard deviation, frequencies, and histograms are all common descriptive analyses. The purpose of inferential analysis in statistics is to form inferences about the connections between variables. Multiple regression analysis will be used to establish a causal relationship between a dependent variable and its explanatory variables. The results of the study indicates that there is significant relationship between electron payment and financial performance. In sum, the adoption of Electronic Payment System has had a profound effect on the economic health of Somalia's SMEs. Small and medium-sized enterprises (SMEs) who adopt electronic payment systems see improvements in cash flow management, market penetration, customer satisfaction, and bottom line profitability. However, maximizing the promise of electronic payment systems for SMEs in Somalia requires solving the constraints of infrastructure, connectivity, and awareness. The implementation of electronic payment systems has the potential to boost Somalia's economy as a whole by bolstering the growth and development of small and medium-sized businesses.