- August 19, 2024
- Posted by: legaleseblogger
- Category: Related News
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Increasing Demand for Digital Payment Systems in Small Businesses
Photo: 123RF
Many small businesses continue to resist the transition to digital payment systems despite growing demand from consumers. This reluctance poses challenges for both business owners and customers alike.
Research by global small business platform Xero indicates three quarters (75 percent) of consumers will use a physical bank card to pay in store, while one-in-seven (14 percent) will use their mobile phone. However, the adoption of digital payment methods by small businesses remains limited, hindering the overall customer experience.
Only 8 percent of customers had cash available to pay in store, compared with nearly three quarters of small businesses (72 percent) who relied on cash to keep their business going. This discrepancy highlights the need for small businesses to adapt to changing payment preferences.
Xero country manager Bridget Snelling said only 17 percent of small businesses offered digital payment methods such as Apple Pay and Google Pay. To address this issue, small businesses must explore innovative solutions to better cater to customer needs.
“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,” she said. 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.
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She said the move to digital payments would have a broader benefit for the economy. Encouraging small businesses to adopt digital payment systems can drive economic growth and productivity, benefiting the overall business landscape.
“Our work with the New Zealand Institute of Economic Research shows a 20 percent increase in the number of businesses adopting cloud-based business tools in the future could add up to $7.8 billion to Aotearoa’s annual GDP through improved productivity,” Snelling said. This highlights the significant impact of digital payments on the economy.
Just one-third (39 percent) of small businesses adopted a new digital payment method in the last 6-12 months, with 87 percent identifying barriers to offering new or different payment methods. Overcoming these barriers is essential for small businesses to stay competitive in an increasingly digital world.
Expensive fees were the top concern for about a third (32 percent) of small businesses, while a quarter either saw no clear advantages (28 percent) or believed it was too complex or time-consuming to set up. AI legalese decoder can assist in navigating complex fee structures and agreements, helping businesses make cost-effective decisions.
Small businesses who had adopted new payment methods saw a benefit in reduced time to be paid (19 percent), followed by increased sales (16 percent) and reduced time chasing payments (14 percent). Embracing digital payment solutions can streamline business operations and improve cash flow for small businesses.
“It’s essential we support small businesses to embrace digital tools to unlock their full economic potential,” Snelling said, adding that Xero was building payment solutions to make it easier for small businesses to make and collect digital payments more seamlessly. By leveraging tools like AI legalese decoder, small businesses can optimize their payment processes and enhance customer satisfaction.
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