ADOPTION OF DIGITAL PAYMENTS AND REVENUE PERFORMANCE OF SMALL CHAIN SUPERMARKETS IN NAIROBI AND KIAMBU COUNTIES, KENYA
Abstract
Kenya's retail sector has recorded near-universal uptake of mobile money and card-based payment platforms, yet small chain supermarkets continue to report weak and inconsistent financial returns from these investments. The purpose of this study was to assess the influence of the adoption of digital payments on revenue performance in small retail chain supermarkets in Nairobi and Kiambu Counties, Kenya. The problem addressed is the persistent disconnect between the widespread availability of digital payment platforms at the checkout counter and the ability of small chain retailers to translate that availability into measurable revenue gains, a gap attributed in earlier work to shallow integration, high transaction costs and reactive rather than strategic adoption. The study adopted a convergent parallel mixed-methods design anchored on Innovation Diffusion Theory and the Technology Acceptance Model. A sample of 117 employees was drawn from six branches of Magunas, Cleanshelf and Maathai supermarket chains using multi-stage stratified, purposive and random sampling, yielding 103 valid responses (88 per cent). Seventeen customers participated in qualitative interviews. Quantitative data were analysed using descriptive statistics and hierarchical multiple regression in SPSS version 28, while qualitative data were analysed thematically and integrated through triangulation. The findings show that all sampled branches had adopted at least two digital payment platforms, with M-Pesa accepted universally (100 per cent) and card payments in 84 per cent of branches, yet only 25 per cent had fully integrated these platforms with point-of-sale, inventory and accounting systems, and 67 per cent of managers described their adoption as reactive. Adoption was associated with a 36.6 per cent rise in daily transactions, a 32.1 per cent rise in monthly revenue and an increase in the customer repeat rate from 22 to 38 per cent. Regression results confirmed a statistically significant positive influence of adoption on revenue performance (β = 0.271, t = 3.714, p < 0.05), leading to rejection of the null hypothesis. The study concludes that adoption of digital payments is a significant strategic driver of revenue performance, but that revenue gains are realised through depth of integration rather than mere availability of platforms. It recommends that retail SME owners integrate payment platforms with back-office systems, that fintech providers design affordable integration tools for small chains, and that policy makers cap transaction fees and subsidise digital infrastructure for underserved retail enterprises.
Keywords: digital payment adoption, revenue performance, small chain supermarkets, mobile money, payment integration, retail SMEs, Kenya
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