Discover how consumers are making payments
A new report from Xero explores the nuances of how consumers and small businesses around the world make and collect payments.
The way we pay for products and services is changing faster than ever, and as a small business owner it’s important to keep up with these shifts to meet customer expectations.
As payment trends evolve, you need to have all the facts so that you can get paid as fast as possible. So we asked consumers, ‘How do you want to pay?’ and delved into what options small businesses were offering today as well as the administrative challenges of paying suppliers.
Xero shared the insights in its recently launched research report, I want to pay that way at Xerocon Nashville.
These insights on how different consumers prefer to pay will help you get paid faster and grow your revenue.
Here’s what Xero found and what it means for you.
The payment preferences mismatch
One of the most prevalent global findings is that there’s a mismatch between how small businesses want to be paid and how their customers prefer to pay. While a majority of consumers (86%) primarily use credit or debit cards, less than two-thirds of small businesses (68%) offer cards as a payment option. This gap is also evident in other popular methods like direct debit and bank transfers.
This mismatch highlights a crucial need for businesses to adapt and align their payment options with customer preferences.
Here are some of the other key insights we uncovered:
Mobile payments are on the rise: Younger generations are driving the adoption of mobile payment options.
Late payments are a business-to-business issue: Consumers generally pay on time, suggesting late payments are more common in business transactions.
Security is paramount: Concerns about security are a major barrier to adopting new payment methods.
Cash isn’t dead: Cash remains popular, especially in specific industries and regions.
How you pay depends on where you pay
Payment preferences and challenges aren’t uniform across the globe. Here’s a snapshot of some regional trends:
Australia: Cash is still important for Aussie small businesses. Nearly four in five small businesses (79%) say a sudden move to a cashless economy would have some impact on their business.
New Zealand: Consumers favour credit and debit cards, but businesses are hesitant due to concerns about fees.
Singapore: Younger generations of consumers are leading the shift to digital payments while more than half of small businesses in the country continue to phase out cash payments.
United Kingdom: One in four (25%) consumers say they would visit another business that accepts more payment options if a business didn’t offer at least one of their preferred ways to pay.
United States: Small businesses are offering newer payment methods, but consumer adoption is lagging.
The power of online payments
Offering your customers more ways to pay can help you get paid faster, and help you to maintain a healthy cash flow. So we’re making it even easier for your customers to make payments by offering more payment methods to our online invoices. You can find out more about Xero’s payment products.
To understand these trends and what payment methods are right for you, download the report, as well as the collecting payments guide which gives you some great insights into getting started with Xero. For our UK small business customers, we also have a quick guide to getting set up with our bill payments solution.
Download the full report and guides
For business accounting and bookkeeping support, contact Zyla Accountants today.