New research from Xero reveals a growing disconnect between U.S. small businesses and consumers when it comes to payment preferences. While 89% of consumers prefer to pay with credit or debit cards, nearly 30% of small businesses do not offer these options. Younger generations are increasingly adopting digital payments, such as Apple Pay or Venmo, with 43% of Gen Z and 42% of millennials using mobile payment methods.
The study highlights how businesses that fail to offer diverse payment options risk losing customers. Approximately 21% of Americans would switch to another business if their preferred payment method wasn’t available.
Despite this trend, many small businesses are embracing new payment technologies. Over 30% of businesses adopting new payment methods in the last year have accessed new customers, reduced payment times, or improved customer retention. Small businesses also show optimism toward emerging payment trends like biometric authentication and cryptocurrency, though consumers remain more cautious.
Fees, security concerns, and late penalties remain top consumer frustrations, influencing their payment decisions. For small businesses, managing payments is also a challenge, with many relying on credit or installment plans to pay suppliers.
Xero is responding to these challenges by developing integrated payment solutions to help small businesses streamline their payment processes and improve cash flow, keeping pace with the evolving payment landscape.
Small Businesses and Consumers Are in Conflict on Payment Preferences – CPA Practice Advisor
