In the accelerating race toward digital transformation, small online retailers in emerging economies are often overlooked, facing disproportionate barriers to adopting cashless payment systems. This study evaluates the opportunities and challenges of electronic wallet (e-wallet) adoption for small online businesses in Vietnam, focusing on their impact on business performance. A mixed-methods approach was used, combining quantitative survey responses from 150 store owners and qualitative insights from 20 in-depth interviews. Statistical tests (ANOVA, t-tests) examined perception differences across sectors, durations, and regions. Findings indicate that e-wallets significantly enhance transaction transparency, expand customer bases, elevate store professionalism, and support strategic growth. However, small businesses still face challenges such as high transaction fees, complex integration, data security concerns, and frequent provider policy changes. Regional disparities were also found to influence future adoption intentions, underscoring the need for localized fintech infrastructure and regulatory consistency. Moreover, the study highlights how government policies and fintech innovations shape small businesses’ readiness to adopt digital payments. Based on the findings, the study proposes practical recommendations for entrepreneurs, fintech providers, and policymakers to foster inclusive and sustainable digital payment adoption. This research contributes to the literature by offering a region-sensitive analysis of Vietnam’s small business sector and delivering actionable insights for stakeholders in emerging digital economies.