Which is More Important, Digital Marketing or Payment Gateway? Research on SMEs Business Performance

Abstract

Small and Medium Enterprises (SMEs) significantly contribute to economic growth, especially in developing countries, including Indonesia. Even though they have an essential role, SMEs still experience problems in facing competition, especially in implementing technology. Implementing technology is one of the hopes for SMEs to survive in uncertain conditions such as the current Covid-19 pandemic. The strategy most used by SMEs in implementing technology is digital marketing followed by payment gateways. The purpose of this study is to test whether digital marketing and payment gateways affect the performance of SMEs. This study uses primary data by distributing questionnaires to 110 SMEs owners in the Special Region of Yogyakarta. Hypothesis testing using multiple linear regression with purposive sampling as a data collection technique. The results show that digital marketing and payment gateways have a significant effect on the performance of SMEs. Payment gateways are more critical because they have a higher beta coefficient than digital marketing variables. The results of this study can provide implications for SMEs owners to apply technology to survive in the face of environmental uncertainty. The research results have implications for the government to support SMEs owners in the form of workshops or training on the use of information technology so that their performance will be better.