Xero’s report titled “I Want to Pay That Way” explores the changing payment behaviours of consumers and the responses of small businesses, highlighting instances where adaptation is lacking. The report reveals that 75% of New Zealanders generally use their physical bank cards for in-store payments, while 14% rely solely on their mobile phones. Cash is the least used, with only 8% of Kiwis carrying cash for in-store transactions.
Despite the decline in cash usage, many small business owners remain dependent on it, with 72% believing that the elimination of cash would significantly affect their operations.
“Aotearoa New Zealand has a long history of embracing innovative payment solutions, starting with the introduction of EFTPOS, which made us an early leader in digital payments. As technology continues to evolve and convenience remains king, it’s important we continue to progress in this direction,” said Bridget Snelling, New Zealand Country Manager at Xero.
The report also indicates that younger generations are more inclined to use mobile payment options. 48% of Gen Z consumers said they use Google Pay or Apple Pay, compared with 28% of Millennials, 17% of Gen X, and 11% of Baby Boomers. However, only 17% of small businesses currently accept services like Apple Pay and Google Pay.
“It’s clear there is a strong preference for using digital payments by Kiwi consumers. Despite this, small businesses across the country are keen to hang on to cash payments, creating a mismatch between consumer desire and small business payment capabilities,” Snelling emphasised.
The slow adoption of digital payment methods among small businesses is apparent, with only 39% having integrated a new payment option in the past six to twelve months. 87% of small businesses in New Zealand mentioned high fees, perceived lack of benefits, and the complexity of implementation as barriers preventing them from updating their payment methods.
On the other hand, businesses that have adopted new payment systems report advantages like quicker payment times, increased sales, and reduced time asking for payments.
“Understanding how different consumers prefer to pay and giving them the flexibility to pay the way they want, will help small businesses get paid faster and grow their revenue. To make it easier to collect payments, Xero is providing more ways to pay,” Bharathi Ramavarjula, SVP of Payments at Xero said, stressing the critical significance of understanding customer preferences to offer seamless payment options and facilitate faster business growth.