Examining the Effectiveness of E-Payment on Small and Medium Enterprises (SMEs): A Case Study of SMEs in the Agri - Business Sector in Lusaka

This study investigates the effectiveness of electronic payment (e-payment) systems on the operational and financial performance of Small and Medium Enterprises (SMEs) in the agri-business sector in Lusaka, Zambia. The research was driven by the growing use of digital financial technologies and the need to understand their impact on business efficiency and profitability. Although e-payment adoption is increasing, SMEs continue to face challenges such as limited digital literacy, unreliable networks, high transaction costs, and security risks. A descriptive research design was used, targeting SME owners and managers in Lusaka’s agri-business sector. Purposive sampling selected 50 SMEs that actively use e-payment platforms. Primary data were collected through structured questionnaires and semi-structured interviews, while secondary data came from journals, reports, and Bank of Zambia publications. Data were analyzed using descriptive statistics, cross-tabulations, and thematic analysis to assess adoption levels, operational efficiency, financial performance, and barriers to effectiveness. Findings show that e-payment adoption among SMEs is moderate, with mobile money being the most widely used platform, followed by POS systems and online banking. Regarding operational efficiency, 70% of respondents reported faster transactions, reduced errors, and better record-keeping. For financial performance, 65% indicated improvements in sales and profitability. Key barriers included limited digital literacy (60%), network unreliability (55%), high transaction fees (50%), and security concerns (45%). Adoption patterns were influenced by perceived usefulness and ease of use, while recommended strategies for enhancement included digital literacy training, improved network infrastructure, reduced transaction costs, and stronger security measures. The study concludes that addressing these challenges will enable SMEs in Lusaka’s agri-business sector to fully benefit from e-payment systems, ultimately improving operational efficiency, financial performance, and long-term sustainability.