This study examined the influence of digital transactions on the performance of small and medium-scale enterprises (SMEs) in Michika Local Government Area (LGA) of Adamawa State, Nigeria. The aim of the study was to assess the impact of internet banking and mobile banking on the operational efficiency and profitability of SMEs in a semi-urban context. The study adopted a survey design, collecting primary data from 400 SME operators through a structured questionnaire. The data were analyzed using binary logistic regression to identify the relationship between digital transaction systems and SME performance. The theoretical framework of the study was based on the Technology Acceptance Model (TAM), which emphasizes the role of technology adoption in enhancing business performance. The findings revealed that both internet banking and mobile banking had a negative but statistically insignificant effect on SME performance in Michika. Key barriers identified included infrastructural deficits, unreliable network services, high transaction charges, and low levels of digital literacy among SME operators. Despite the potential convenience offered by digital banking, many SMEs continued to rely on cash transactions, limiting the effectiveness of cashless systems. The study concluded that the cashless policy, in its current form, has not led to significant improvements in SME performance in Michika. Therefore, the study recommended stronger digital infrastructure, reduced transaction costs, and enhanced financial literacy to realize the full potential of digital financial services in fostering SME growth in the region.