Digital transformation challenges and opportunities for MSMEs

Micro, small, and medium enterprises (MSMEs) are increasingly utilizing digital tools to navigate a global shift toward a cash-lite economy. In the Philippines, G-Xchange Inc. CEO Ren-ren Reyes noted that while 77% of MSMEs express interest in digital tools, only 20% have fully adopted them due to technical skill gaps and costs. To address this, GCash for Business is providing payment solutions, such as tap-to-pay and automated management tools, to help merchants move from manual processes to digital efficiency.

A study published in the Indonesian Interdisciplinary Journal of Sharia Economics further explores the challenges of this transition. The research highlights that while digitalization offers MSMEs access to global markets and data-driven decision-making, many face barriers including limited digital literacy, constrained resources, and intense competition from larger tech-enabled firms. The study suggests that success for these smaller enterprises depends on external support, such as infrastructure upgrades, digital skills training, and simplified access to financing.