The 2024 Xero Global Payments Report reveals a growing disconnect between the payment preference of consumers against those offered by small businesses.
The report, based on surveys of over 6,000 consumers and 2,500 small business leaders across five countries, highlights three major trends.
Firstly, there’s a clear mismatch in payment preferences, with 86% of consumers favouring credit/debit cards, yet only 68% of small businesses offering this option.
Secondly, the nature of the products or services sold heavily influences preferred payment methods.
Finally, fees and security concerns are the top barriers to adopting new payment methods for both consumers and small businesses.
The report underscores the importance of small businesses aligning their payment options with consumer preferences.
For instance, despite the rise of mobile payment methods like Apple Pay and Google Pay, small businesses have been slow to adopt these technologies.
This delay could lead to lost sales as consumers increasingly prefer mobile and contactless payment methods.
The trend is particularly pronounced among younger consumers, with 50% of Gen Z using mobile payments, compared to just 11% of Baby Boomers.
Regional Variations
Furthermore, the report identifies significant regional variations in payment preferences and barriers.
For example, while Australians express low tolerance for surcharges, Singaporeans are more accepting. In the US, hidden fees are a major frustration, influencing payment choices and potentially driving consumers away from businesses that do not offer transparent pricing.
For small businesses, adapting to these evolving payment preferences is crucial not just for meeting customer expectations but also for staying competitive in a rapidly changing market.
Embracing a wider range of payment options, particularly mobile and digital payments, can help businesses tap into new customer bases, reduce payment times, and increase sales.
As the payments landscape continues to evolve, small businesses must stay agile and responsive to consumer demands.
By offering a broader range of payment options and addressing security concerns, businesses can enhance customer satisfaction and drive growth.
The future of payments is digital, and small businesses that adapt to these trends will be better positioned to thrive in an increasingly competitive market.
This strategic alignment will be key to maintaining customer satisfaction and ensuring long-term business success in the digital age.
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