<p>This study examines whether online sales can help micro, small, and medium enterprises (MSMEs) address financial challenges by reducing the instances of delayed payments. Utilizing Indian firm-level data from the World Bank Enterprise Survey (WBES) and employing various econometric techniques to address potential endogeneity, we find that higher online sales significantly reduce both delayed payments and perceived financial obstacles for these firms. However, the benefits are not evenly distributed across firms of different sizes, with the micro (smallest) firms experiencing least benefits. Our mediation analysis suggests that online sales reduce perceived financial obstacles both directly and indirectly through the reduction in delayed payments. Our findings underscore the need for targeted support for the digital adoption of micro firms and emphasize the importance of integrating digitalization with effective legal and financial measures to bolster the resilience of MSMEs in India.</p>