DIGITAL FINANCIAL LITERACY AND FIRM PERFORMANCE: THE ROLE OF DIGITAL PAYMENT

Abstract Digitalization in business needs to be balanced with good digital financial literacy so that company performance can be measured clearly. Digital financial literacy also plays a role in supporting individuals to understand the use of digital products or applications. This study empirically investigates the relationship between digital financial literacy, digital payments, and company performance; and determine the role of digital payments as a mediator in the influence of digital financial literacy and company performance. The object of this study was obtained from Micro and Small Enterprises in East Java. A sampling technique uses purposive sampling, with sample size is 216 samples. The research data was collected using primary data through a questionnaire. Analysis of research data using SEM-PLS. The results of this study finds that there is a relationship between digital financial literacy, digital payments, and company performance. This study also finds that digital payments are a mediator between digital financial literacy and company performance. These results indicate that SMEs' digital financial literacy level affects increasing company performance through digital payments and company performance