Bridging the Micro-Business Digital Divide: Drivers of Technology Acceptance in Ayer Keroh, Malacca

Global business environment has changed due to the rapid acceleration of digitalization, which offers Micro, Small and Medium-sized Enterprise (MSMEs) huge changes to improve operational efficiency, drive ongoing innovation and increase market access. However, resource-constrained traditional small businesses located in semi-urban areas frequently encounter substantial hurdles in integrating digital technologies, risking economic marginalization. This empirical study investigates the critical determinants of digital tool adoption among traditional MSMEs (including retail, food and beverage, and handicraft enterprises) operating within the tourism-centric MITC Ayer Keroh commercial zone in Malacca, Malaysia. A quantitative research design was implemented by utilizing an extended Technology Acceptance Model (TAM) incorporating the construct of Trust. Primary data were collected via structured questionnaires from a representative sample of N=159 MSME owners selected through simple random sampling. Descriptive analysis revealed high adoption rates of basic digital payment systems (TNG E-Wallet and DuitNow at 98.7% usage) and social media marketing platforms (TikTok at 92.4% and Instagram at 90.7%), whereas more advanced cloud services, data analytics, and CRM tools exhibited low penetration. Multiple linear regression analysis demonstrated that the extended TAM model explains 74.6% of the variance in digital tool adoption (R2 = 0.746, F = 151.565, p < 0.001). Perceived Ease of Use exerted the strongest positive influence on digital adoption (beta = 0.411, t = 4.075, p < 0.001), followed by Trust (beta = 0.294, t = 3.337, p = 0.001) and Perceived Usefulness (beta = 0.208, t = 2.898, p = 0.004). The results underscore the necessity of expanding theoretical models of technology acceptance to encompass the emotional and security dimensions of Trust in resource-constrained contexts. Pragmatically, the study recommends targeted policy interventions such as subsidized digital infrastructure, tailored digital literacy training, and localized cybersecurity workshops, in alignment with the Melaka Smart City Blueprint 2035 to bridge the digital divide and ensure long-term small business sustainability.

Micro, Small and Medium Enterprises (MSMEs), Technology Acceptance Model (TAM), Trust, Digital Adoption, Semi-Urban Commercial Zone, Operational Efficiency

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