New report finds nearly half of Australian businesses plan to invest in digital payments over the next 12 months
Seventy-three percent of businesses indicate that making it faster or easier for customers to purchase is a key reason for investing in new forms of digital payment technologies.
Mobile payments are the top area of investment with over one-third of businesses planning to invest in "tap to pay" features
SYDNEY, Australia —Stripe, a financial infrastructure platform for businesses, today published “The Future of Digital Payments for Businesses in Australia,” a joint research effort with The University of Sydney Business School (USBS). The paper finds nearly half (46%) of Australian business leaders plan to invest in digital payments in the next 12 months in order to make transactions faster or easier for customers.
The report surveyed more than 1,000 business leaders about the digital payment trends in Australia that are helping businesses improve competitiveness and thrive in an uncertain macroeconomic environment.
“Australia is no stranger to digital payment innovations—after all, we’re a nation of entrepreneurs and innovators,” said Karl Durrance, managing director of ANZ at Stripe. “While consumers are taking the lead on digital payments usage, this research confirms that there’s strong awareness amongst businesses of how important new payment technologies are. It’s encouraging to see them recognise mobile payments and tap to pay as the next frontier in digital payments for businesses in Australia.”
Nearly half of Australian businesses know their payment operations need to be upgraded
Forty-six percent of businesses surveyed are now accepting four or more payment methods, consistent with a broader trend toward businesses accepting multiple payment forms. At the same time, nearly half of Australian businesses (45%) acknowledged the need to improve their current payment systems. This has become a top-level priority at many businesses, with 40% of survey respondents reporting that investment in new payment technologies is being discussed at the executive or board level.
This high prioritisation reflects the fact that 60% of businesses report that digital payment technologies have improved their company’s competitiveness. Businesses that invested in digital payments technologies report significant improvements to customer relationships (84%), improved revenue growth (83%), and an increase in their customer base (82%).
Medium-sized and large enterprises see the most value in adopting digital payments, with 81% stating that this technology is critical for their digital transformation trajectory, compared to only 59% of small businesses.
Late payments threaten business survival
The report also found that 50% of businesses consider late payments to be a serious threat to their survival. Solving this problem is one of the key reasons they are accelerating their transition to digital payments. Digital payments tools such as e-invoicing simplify customer payments and help businesses manage late payments through instant invoicing, integrated payment options, and increased transparency.
Victorian businesses and the retail sector are leading the way
At the state level, the report found that Victorian (VIC) businesses are at the forefront of digital wallet adoption, with 38% using payment methods such as Apple Pay and Google Pay. They are followed by businesses in New South Wales (NSW) and Queensland (QLD), which have a digital wallet adoption rate of 34%. The survey also asked business leaders about their use of online payment links, a URL, button or QR code that takes customers directly to a unique checkout page to complete a purchase. Businesses registered in NSW led with an adoption rate of 23%, followed by QLD (21%) and VIC and Western Australian (both 20%).
At an industry level, businesses in the retail and financial and insurance services sectors are leading in payment method adoption. Fifty-seven percent of businesses in retail and 49% in the finance and insurance services sector are adopting digital wallets. The top adopters of payment links are businesses in the professional, scientific, and technical services sector (36%).
Tap to pay: The next frontier for digital payments
Mobile payments have emerged as the top area of investment for digital payments technologies. Thirty-four percent of businesses plan to invest in tap to pay NFC features on mobile devices, including mobile phone-enabled payments and wearables.
They include Mr Yum, a leading mobile menu and ordering platform for the food and beverage and entertainment industries in Australia. When pubs and restaurants were forced to close their doors during the pandemic, businesses turned to providers such as Mr Yum to power their digital ordering and marketing strategy. Supported by Stripe, Mr Yum was able to scale up seamlessly. Now Mr Yum will be one of the first businesses on Stripe to offer Tap to Pay on iPhone in Australia, making ordering meals an even simpler process for its users.
More than half of businesses identify fraud and scams as their primary concern associated with payment systems
While digital payment technologies provide businesses with tremendous new opportunities, they also introduce some challenges. More than half (54%) of businesses identified fraud and scams as their primary concern when it comes to adopting new payment technologies. These concerns highlight the need for payment service providers to prioritise robust security and fraud prevention strategies to protect businesses and their customers.
“Our research shows the adoption rate of digital payments remains uneven across states, industries and different sizes of businesses,” said Dr Wei Li, Discipline of International Business at The University of Sydney Business School. “However, it’s reassuring to know businesses are planning to invest in this technology. While the progression may manifest incrementally and there are barriers to overcome, the findings show businesses are gravitating towards a more sophisticated and inclusive digital payment framework, paving the way for a transformed and resilient economic future.”
About the research
Between June and July 2023, The University of Sydney Business School and Stripe conducted an online survey in Australia with 1,015 business leaders to learn about the digital payment landscape in Australia and investigate the impact of new forms of digital payment technologies on Australian businesses’ performance and global competitiveness. The research was led by Dr. Wei Li from the Discipline of International Business and Dr. Luke Deer from the Discipline of Finance at The University of Sydney Business School.
The businesses surveyed included a mix of business-to-business (B2B) and business-to-consumer (B2C) businesses. Twenty-six percent of the businesses surveyed primarily offer products or services targeted at other businesses, 44% mainly cater to consumer needs through their products or services, and 25% sell to both businesses and consumers. The businesses employ a mix of online and offline business models: 46% earn their revenue largely through online channels while 50% mainly generate their income offline.
Seventy percent of the businesses surveyed were small businesses, including sole traders, while 30% were medium or large enterprises. Of the businesses surveyed, 63% registered annual revenue below AUD 1 million, 17% between AUD 1 million and AUD 10 million, and 21% above AUD 10 million. Most respondents (59%) employ 20 or fewer people, while 27% employ between 21 and 499 people, and 13% employ 500 or more people.
About Stripe
Stripe is a financial infrastructure platform for businesses. Millions of companies—from the world’s largest enterprises to the most ambitious startups—use Stripe to accept payments, grow their revenue, and accelerate new business opportunities. Headquartered in San Francisco and Dublin, the company aims to increase the GDP of the internet.
About The University of Sydney Business School
Founded in 1920 as the first of its kind in Australia, The University of Sydney Business School is a global leader in business and management education, inspiring students to challenge the norm and create innovative approaches to the way business is accomplished in Australia and globally. The School holds triple crown accreditation from AACSB, AMBA and EQUIS, placing it in the top 1% of business schools worldwide. It is a leader in teaching and research, offering students, industry partners, and the global community a clear vision of work practices today and tomorrow.
