This study examines the influence of digital payment adoption on the profitability of microenterprises in Yogyakarta, Indonesia. A quantitative explanatory research design was employed using data collected from 100 microenterprise owners through structured questionnaires. The data were analyzed using descriptive statistics and multiple linear regression analysis to evaluate the effect of digital payment adoption on business profitability. The findings reveal that digital payment adoption has a positive and statistically significant influence on profitability, indicating that businesses with higher levels of digital payment utilization experience greater sales growth, improved profit margins, enhanced cost efficiency, and increased transaction volume. Digital payment adoption explains 51.1% of the variation in microenterprise profitability, demonstrating its substantial contribution to business performance. These findings extend current knowledge regarding the economic benefits of digital financial technologies among microenterprises and highlight the strategic importance of digital payment systems in supporting business sustainability. The study provides practical implications for policymakers and fintech providers to strengthen digital payment ecosystems and improve digital capability among microenterprises to foster sustainable local economic development.
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