The promise of the Internet and e-commerce has led to the increasing use of the web for transaction processing. Many organizations have adopted web-enabled transaction processing for applications such as processing payments online, selling products online, making travel reservations to name a few. In spite of the trend in this direction, transaction processing is not a major application on the web and its growth has been comparatively slow. As an important area for study, we examine the impact of various contextual factors, such as IS maturity, organizational factors, and environmental characteristics on the perceived usefulness and adoption of web-enabled transaction processing by small businesses. A research model and eight hypotheses were developed based on past literature review. Data were collected from senior managers in small business organizations using an instrument that was carefully developed and tested. Structural equation modeling was performed to test the goodness of fit of the model as well as the hypotheses. The model suggested reasonable fit for the data. Consistent with the TAM model, the results show the importance of perceived usefulness in adoption of web-enabled transaction processing by organizations. Other significant factors are IS maturity of a company, centralization, formalization, and the IS budget.