Digital Payment Innovation in MSMEs West Sulawesi: An Isomorphism Theory Approach

Abstract

This study aims to analyse the adoption of digital payments among MSMEs in West Sulawesi through the Institutional Isomorphism Theory. Using a qualitative case study approach with nine informants (eight MSME actors and one representative from the Cooperative Office), data was collected through in-depth interviews, observations, and document reviews. The results show that adoption is not driven by mandatory regulations, but rather by the synergy of three isomorphism mechanisms: first, coercive (government/banking encouragement and assistance); second, mimetic (imitation of successful competitors); and finally, normative (internalisation of digital payments as a professional standard). These findings reveal that in border contexts such as West Sulawesi, digital transformation is triggered by socio-institutional pressures rather than top-down instructions. Its theoretical contribution lies in proving the relevance of isomorphism theory to explain technology adoption in developing countries. In practical terms, policies should focus on strengthening peer-to-peer learning ecosystems and professional legitimacy, rather than regulatory enforcement. The limitation of this study lies in its qualitative scope; a further recommendation is a quantitative approach for wider-scale validation