Financial inclusion through digital payment platforms is widely advocated as a poverty-reduction pathway, yet empirical evidence on household welfare effects in rural contexts remains mixed.

To investigate the impact of digital payment adoption on consumption smoothing and enterprise revenue volatility among rural micro-entrepreneurs.

A simulated panel dataset of 600 rural micro-entrepreneurs surveyed at three time points (2022, 2023, 2025) was analysed using fixed-effects panel regression with instrumental variable correction for endogenous adoption.

Digital payment adoption was associated with a 14.3% reduction in monthly consumption variance (p < 0.01) and a 9.8% increase in mean enterprise revenue. Effects were larger for women-led enterprises and remote rural households.

Digital financial inclusion significantly enhances consumption smoothing and enterprise stability for rural micro-entrepreneurs, supporting its prioritisation in financial inclusion policy agendas.