Digital Literacy and Trust Drive Fintech Adoption Among Indonesian MSMEs, Study Finds
MAKASSAR, Indonesia – Financial technology adoption among Micro, Small, and Medium Enterprises (MSMEs) depends not only on the availability of digital infrastructure but also on business owners’ digital literacy and trust in financial systems, according to a 2026 study by Siti Nardiyah Muhrami, Asriyani Amrullah, and Dwiyanti from Universitas Negeri Makassar (UNM). Published in the International Journal of Applied and Advanced Multidisciplinary Research (IJAAMR), the study provides new insights into why some small businesses embrace fintech solutions while others remain reluctant to move away from cash-based transactions. The findings come at a time when governments, banks, and fintech companies are aggressively promoting digital payment systems, mobile banking, digital wallets, and QR-based transactions to support financial inclusion. While these technologies promise greater efficiency and access to financial services, many small business owners still hesitate to adopt them despite widespread availability. According to the researchers, understanding the human factors behind technology adoption is essential for accelerating digital transformation among MSMEs, which continue to serve as the backbone of Indonesia’s economy.
Why Many Small Businesses Still Resist Fintech
MSMEs play a crucial role in employment creation and economic growth across Indonesia. However, many of these businesses continue to rely on traditional cash-based operations, limiting their ability to expand and access formal financial services. Financial technology has emerged as a potential solution to these challenges. Digital payment platforms, QRIS transactions, peer-to-peer lending, and mobile banking services offer faster, more transparent, and more efficient financial management tools. Yet the existence of technology alone does not guarantee its adoption. The study highlights a persistent gap between fintech availability and actual usage. Many entrepreneurs perceive digital financial systems as complicated, risky, or difficult to understand. Concerns about cybersecurity, data privacy, and financial fraud often discourage them from adopting digital solutions.
Exploring the Human Side of Technology Adoption
To understand the factors influencing fintech acceptance, the researchers conducted an in-depth qualitative case study involving 15 MSME owners and managers from the retail, culinary, and apparel sectors. The six-month study combined:
-In-depth interviews with business owners.
-Direct observation of daily business operations.
-Analysis of supporting documents and financial records.
-Cross-validation using government and institutional reports.
Rather than focusing solely on statistics, the researchers examined how business owners personally experience and evaluate digital financial technologies in their daily operations. The analysis was guided by the Technology Acceptance Model (TAM), a widely used framework for understanding why people adopt new technologies. The study expanded the model by incorporating two critical factors: digital literacy and trust.
Digital Literacy Shapes Confidence and Ease of Use
One of the strongest findings was the role of digital literacy in determining whether entrepreneurs perceive fintech as easy to use. Business owners who were already familiar with digital tools such as social media, messaging applications, and online communication platforms generally adapted quickly to fintech services. They viewed digital payment systems and mobile banking applications as intuitive and manageable. In contrast, entrepreneurs with limited digital skills often experienced significant anxiety when using fintech applications. Many feared making mistakes during transactions, selecting incorrect menu options, or accidentally losing money through technical errors. The researchers found that digital literacy extends far beyond basic smartphone operation. It includes the ability to understand digital information, evaluate online risks, manage digital workflows, and interpret financial data effectively. As a result, digitally literate business owners were more likely to recognize fintech as a valuable business tool rather than a complicated technological burden.
Trust Becomes the Foundation of Adoption
The study also identified trust as a decisive factor influencing fintech acceptance. Researchers found that trust operates on two interconnected levels:
Trust in Technology
Business owners need confidence that fintech platforms are reliable, secure, and capable of processing transactions without interruptions. Stable performance, strong cybersecurity measures, and real-time transaction processing significantly increase users’ willingness to adopt digital financial services.
Trust in Institutions
Equally important is confidence in government oversight and regulatory protection. Many participants initially feared losing money to fraud or system failures. However, these concerns decreased substantially when they recognized that fintech services were supervised by institutions such as Bank Indonesia and the Financial Services Authority (OJK). Official regulatory endorsements provided reassurance that users would receive legal protection if problems occurred.
Digital Literacy and Trust Work Together
The study revealed that digital literacy and trust are not separate influences but closely connected drivers of technology adoption. When entrepreneurs understand how fintech systems work and trust the institutions regulating them, they begin to see clear benefits. These benefits include:
-Faster payment processing.
-Reduced dependence on cash transactions.
-Better financial record keeping.
-Improved transaction transparency.
-Easier access to formal financing opportunities.
-Lower risks associated with counterfeit money and cash handling.
As confidence grows, business owners become increasingly willing to integrate fintech into their everyday operations.
Fintech Is Becoming Part of Daily Business Management
Field observations showed that MSMEs that successfully adopted fintech no longer use digital payment tools merely as optional transaction methods. Many actively encourage customers to use QR-based payments, reducing queues and improving service efficiency. Some businesses have gone further by using fintech platforms for supplier payments, payroll management, and financial monitoring. According to the researchers, this transition demonstrates that fintech adoption is not simply a technological upgrade but a broader transformation of business culture toward greater accountability, efficiency, and transparency.
Implications for Industry and Policymakers
The findings provide important recommendations for fintech developers, financial institutions, and government agencies. For fintech companies, the study emphasizes the need for user-friendly applications designed specifically for small business owners with varying levels of digital literacy. Simpler interfaces, local-language support, and accessible customer assistance could significantly improve adoption rates. For policymakers, the research highlights the importance of strengthening digital literacy programs and increasing public awareness of consumer protection regulations. Educational initiatives that teach cybersecurity, digital bookkeeping, and safe online financial practices could help reduce technological anxiety among entrepreneurs. The researchers argue that sustainable financial inclusion requires more than infrastructure development. It also requires empowering users with the knowledge and confidence necessary to engage safely with digital financial ecosystems. As Indonesia continues its digital transformation journey, the study suggests that building trust and improving digital literacy may be just as important as introducing new financial technologies.
Author Profiles
Siti Nardiyah Muhrami, M.M. is a researcher and academic at Universitas Negeri Makassar (UNM) whose expertise includes financial technology adoption, digital transformation, MSME development, and technology acceptance studies.
Asriyani Amrullah, M.M. is a lecturer and researcher at Universitas Negeri Makassar (UNM) specializing in business management, entrepreneurship, digital innovation, and financial inclusion.
Dwiyanti, M.M. is an academic and researcher at Universitas Negeri Makassar (UNM) with research interests in digital business ecosystems, MSME empowerment, and technology-based economic development.
Research Source
Article Title: Acceptance Analysis of Financial Technology Among MSMEs Through the Lens of the Technology Acceptance Model: A Case Study of Digital Literacy and Trust Factors
Authors: Siti Nardiyah Muhrami, Asriyani Amrullah, and Dwiyanti
Journal: International Journal of Applied and Advanced Multidisciplinary Research (IJAAMR)
Volume & Issue: Vol. 4, No. 5
Year: 2026
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