Online Transactions as a Driver of Hospitality SME Performance: Evidence from Kisumu County

The rapid adoption of online transaction platforms has transformed business operations by improving payment efficiency, customer convenience, and financial inclusion. Despite the increasing uptake of digital payment technologies in Kenya, empirical evidence on their influence on the performance of hospitality small and medium-sized enterprises (SMEs) remains limited, particularly at the county level. This study examined the effect of online transactions on the performance of hospitality SMEs in Kisumu County, Kenya. Guided by the Technology Acceptance Model (TAM), the study employed a mixed-methods research design integrating quantitative and qualitative approaches. A sample of 157 respondents was drawn from 42 registered hospitality SMEs, from which 113 valid questionnaire responses were obtained, representing a response rate of 71.97%. Quantitative data were analysed using descriptive statistics, correlation and regression analysis, while qualitative data were analysed through content analysis. The findings showed that online transactions had a positive and statistically significant effect on the performance of hospitality SMEs. Online transactions were associated with improved transaction efficiency, convenience and business operations. Qualitative findings further highlighted convenience and efficiency, cost savings, access to wider markets and customer engagement as benefits experienced by hospitality SMEs. However, respondents also raised concerns regarding the security of online transactions and protection of customer information. The study concludes that online transaction platforms contribute positively to the performance of hospitality SMEs and recommends increased investment in secure digital payment infrastructure, digital skills and supportive measures that enable SMEs to benefit effectively from digital transactions. The study contributes to the literature on digital financial technologies by providing empirical evidence on online transactions and hospitality SME performance within the context of Kisumu County, Kenya.