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Background Small and medium enterprises (SMEs) dominate East African commerce yet incur persistent time, cost, and liquidity frictions when settling cross-border transactions. Digital payment technologies promise to ease these constraints, but rigorous evidence connecting adoption to measurable trade-process efficiency is sparse. Purpose This study evaluates whether, and under what institutional conditions, SME digital-payment adoption improves cross-border trade efficiency in Kenya, Uganda, Rwanda, and Tanzania. Methods A harmonised dataset pools 2023–2025 World Bank Enterprise Surveys microdata with country-level indicators of payment-system interoperability and Trade Facilitation Agreement (TFA) progress. Adoption is captured through the shares of sales and purchases conducted electronically, while efficiency is proxied by customs-clearance days, compliance costs, and perceived predictability. Ordinary least squares models with survey-design inference estimate adoption–efficiency associations; interaction terms test moderation by interoperability and regulatory alignment. Results Controlling for firm and country heterogeneity, electronic-payment adoption is associated with 1.5 fewer customs-clearance days (p = 0.019), a 2.1-percentage-point fall in compliance costs (p = 0.006), and a significant decline in perceived unpredictability (p = 0.009). Marginal-effects analysis shows that these gains intensify where remittance-corridor costs are low and TFA implementation exceeds 70 percent, underscoring the complementary roles of systemic interoperability and regulatory alignment. Conclusions Digital-payment adoption yields tangible efficiency dividends for trading SMEs, but only when embedded in supportive payment and trade-governance ecosystems. Policymakers should therefore pair interoperability and regulatory reforms with targeted SME onboarding to translate Africa’s extensive mobile-money infrastructure into sustained trade competitiveness.
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