Name: Salma Begum & Gourav R Shet
Country: India

Year: 2026
Volume: Volume No: 13, Issue No: 1, Year: 2026
Page Number: 146-155
DOI: https://doi.org/10.5281/zenodo.19494913

ABSTRACT
The rapid proliferation of digital payment systems in India has fundamentally reshaped how businesses conduct financial transactions, particularly within the small and medium enterprise segment. This study examines the adoption of digital wallets and its effect on the growth of small businesses in Karnataka, India. The research is grounded in established technology adoption frameworks, specifically the Technology Acceptance Model (TAM), the Unified Theory of Acceptance and Use of Technology (UTAUT), and the Diffusion of Innovation (DOI) theory. A descriptive and analytical research design was employed, withm primary data collected from 150 small business owners across urban, semi-urban, and rural regions of Karnataka using a structured questionnaire administered through both online and offline modes. The study investigates the influence of key adoption factors ease of use, perceived security, transaction cost, and customer demand on business growth indicators including sales, profitability, customer base expansion, and operational efficiency. Data analysis was conducted using descriptive statistics, Cronbach's Alpha reliability testing, Pearson's correlation analysis, multiple regression analysis, ANOVA, and independent sample t-tests. The findings reveal that digital wallet adoption has a statistically significant positive impact on small business growth (R² = 0.335, p < 0.001). Ease of use (β = 0.273) and perceived security (β = 0.199) emerged as the strongest predictors of business growth, followed by customer demand (β = 0.133). Notably, transaction cost did not exert a significant influence on business growth. The study further demonstrates that ease of use positively influences customer satisfaction (β = 0.437, p < 0.001). ANOVA and t-test results confirm that the impact of digital wallet adoption on business growth is consistent across different geographical locations and demographic groups. These findings offer practical
implications for small business owners, fintech service providers, and policymakers in
designing strategies that promote digital financial inclusion and support the sustainable growth of small enterprises.

Keywords: Digital Wallets, Small Business Growth, Technology Adoption, UPI, Karnataka,
TAM, UTAUT, Customer Satisfaction