Digital payment systems represented transformative financial technologies reshaping retail business operations and growth trajectories. This study examined the impact of digital payment systems on small retail business growth among SMEs in Kampala Central Business District, Uganda. The study employed a cross-sectional survey design using mixed methods approaches. A sample of 156 respondents comprising SME owners, managers, and employees from retail businesses was selected using stratified random sampling. Data were collected through structured questionnaires and key informant interviews. Statistical analysis included descriptive statistics, Pearson correlation, and multiple regression analysis using SPSS version 26. The study revealed a strong positive relationship (r = 0.781, p < 0.01) between digital payment adoption and retail business growth. Mobile money showed the strongest correlation with sales growth (r = 0.824, p < 0.01). Point-of-sale systems correlated significantly with customer base expansion (r = 0.756, p < 0.01). Digital payment convenience demonstrated positive correlation with transaction volume increases (r = 0.698, p < 0.05). The regression model explained 74.3% of variance in business growth (R² = 0.743). Businesses using digital payments reported 47.6% higher revenue growth compared to cash-only businesses. Transaction efficiency improved by 62.8%, while operational costs decreased by 23.4% among digital payment adopters. Customer satisfaction increased by 54.7% due to payment flexibility. Digital payment systems significantly enhanced small retail business growth in Kampala CBD. Mobile money, POS systems, and online payment platforms collectively increased sales volumes, expanded customer bases, improved operational efficiency, and reduced transaction costs. However, adoption barriers including setup costs, technical challenges, and digital literacy gaps limited widespread uptake. The Bank of Uganda should reduce digital payment transaction fees for small businesses to incentivize adoption. Payment service providers should develop simplified, affordable solutions tailored to SME needs with comprehensive training programs. Kampala Capital City Authority should facilitate digital payment infrastructure deployment through tax incentives and streamlined licensing. SMEs should prioritize digital payment integration as strategic investments for competitive advantage and sustainable growth.