Report: new payment methods causing anxiety for Aussie SMEs

A recent report by global small business platform Xero, titled "I Want to Pay That Way," has unveiled significant insights into the changing payment landscape for Australian small businesses and their customers. The report highlights that emerging payment methods, especially digital currencies like cryptocurrencies, are causing considerable anxiety among both consumers and small businesses.

The study found that digital currencies create the most apprehension among small businesses, with 27% expressing anxiety over their use. Implantable payment chips, a more novel technology, generate even more concern, with 37% of small businesses and 47% of Australian consumers terrified of using such technology.

Security remains a primary concern for Australians, with 44% citing security issues as one of their top frustrations with payment methods. Despite this, new payment methods are seeing increased adoption, especially among younger demographics. The research shows that Generation Z consumers (40%) are over four times more likely to use mobile payment systems like Apple Pay or Google Pay compared to Baby Boomers (9%). On the business side, however, only 18% of small businesses currently accept mobile payments.

The report underscores a significant gap between consumer preferences and the payment methods small businesses offer. Over half (53%) of Australian small businesses have not recently adopted new payment technologies, with 36% attributing this reluctance to the high costs associated with adoption. Bank transfers remain the most common payment option provided by 68% of small businesses, yet 86% of consumers prefer to use credit or debit cards.

This disconnect between consumer preferences and business offerings is causing friction, with one in four Australians actively seeking out businesses that provide their preferred payment options. The findings highlight an urgent need for businesses to realign their payment offerings to better meet consumer expectations.

In response to these findings, Theo Konstantas, Xero's Sales Director for Australia, emphasised the importance of understanding and adapting to these evolving preferences. "The top payment trends among consumers show a clear shift towards more modern payment methods, including mobile payments and digital currencies. Small businesses need to be proactive in integrating these technologies to enhance not just their cash flow and operational efficiency but also to improve customer satisfaction," Konstantas said.

As businesses look to the future, understanding the implications of these emerging payment technologies becomes crucial. Konstantas pointed out, "Insights into how Australian businesses and consumers are responding to future payment methods reveal that there is a significant potential impact on the market. Small businesses that can navigate these changes effectively will be better positioned to meet the demands of their customers and stay competitive."

The report calls attention to the need for small businesses to consider their payment infrastructure critically and to seek cost-effective ways to introduce new technologies that align with consumer preferences. As security continues to be a significant concern, businesses must also ensure that any new payment systems they adopt are secure to maintain consumer trust.