MSME news: “Xero Report Uncovers Discrepancy Between Australian Shopper Preferences and Small Business Payment Methods”
New research by global small business platform Xero reveals a significant disconnect between how consumers prefer to pay and how MSME businesses prefer to receive payments, potentially affecting customer retention and revenue.
Launched today, Xero’s latest report, “I Want to Pay That Way,” explores evolving consumer payment habits and the slow adaptation of small businesses. The report highlights a mismatch in payment expectations, with 86% of Australians favoring credit or debit cards for payments, yet only 55% of small businesses offering these options. Bank transfers (68%) and cash (59%) are the most common methods offered by small businesses, but over a quarter of Australians (28%) would switch to another business if their preferred payment method wasn’t available.
Younger generations, particularly Gen Z, are driving the adoption of new payment methods like Apple Pay and Google Pay, but only 18% of small businesses currently accept mobile payments. Similarly, the demand for buy now, pay later options is growing, especially among millennials, but only 14% of small businesses offer this service.
Despite the benefits of new payment methods, such as faster payments and reduced time chasing late payments, the majority of Australian small businesses (53%) have not adopted new payment methods in the past six to 12 months, citing high fees as a major barrier.
MSME news
Cash remains important for Australian businesses, with 79% saying a sudden shift to a cashless economy would impact them, though only 25% of consumers rely on cash and cheque payments.
Looking to the future, both consumers and small businesses share anxiety about emerging payment methods, particularly digital currencies and implantable payment chips.
MSME news:
Xero’s Sales Director Australia, Theo Konstantas, emphasized the importance of small businesses adapting to consumer preferences to stay competitive, while Bharathi Ramavarjula, SVP of Payments at Xero, reiterated Xero’s commitment to offering more flexible payment solutions to support small business growth.
