FINANCIAL LITERACY, CASHLESS PAYMENT USAGE, AND FINANCIAL PERFORMANCE OF MICRO AND SMALL ENTERPRISES IN INDONESIA

Abstract

This study examines how financial literacy and cashless payment usage influence the financial performance of micro and small enterprises (MSEs) in Indonesia. Drawing on the Resource-Based View (RBV) and the Technology Acceptance Model (TAM), financial literacy is positioned as an internal managerial capability, while cashless payment usage is viewed as technology adoption that supports transaction efficiency, transparency, and financial monitoring. A quantitative explanatory design was applied using cross-sectional survey data from 120 MSE owners who were directly involved in business financial management. The data were analyzed using PLS-SEM with SmartPLS. The findings show that financial literacy has a positive and significant effect on financial performance. MSE owners with better financial knowledge are more capable of preparing records, managing cash flow, separating business and personal finances, and calculating profit. Cashless payment usage also has a positive and significant effect, indicating that QR-based payments, electronic wallets, and mobile banking can strengthen transaction recording and business monitoring. The study contributes by integrating RBV and TAM in a single empirical framework and by showing that financial literacy and cashless payment usage work as complementary factors in improving MSE financial performance.