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Digital systems are seen as the answer despite concerns over scams and fraud, according to research from Stripe.
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Late payments drive business adoption of e-invoicing
30 August 2023
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Late payments are forcing businesses to adopt digital systems with almost half expected to upgrade to e-invoicing in the next 12 months, according to research by payment processor Stripe and the University of Sydney.
Fear of digital scams and fraud was being offset by payment delays, the survey found, with 50 per cent of businesses saying they were a “serious threat” to survival.
The survey, of over 1,000 business leaders, showed businesses were also accelerating their take-up of e-invoicing and other digital products to improve competitiveness, although small business trailed larger enterprises.
Over 80 per cent of medium and large businesses viewed digital payments as “critical” for their “digital transformation trajectory”, compared to just 59 per cent of small businesses.
The report said payment service providers should prioritise security and fraud prevention strategies to calm business concerns.
Stripe’s Australia and New Zealand managing director Karl Durrance said the report showed a broad consensus among business owners that digital payment methods were becoming essential.
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“This research confirms that there’s strong awareness among businesses of how important new payment technologies are,” he said.
Late payment issues were a “key driver” for uptake among businesses but consumer demand also played a role.
“Consumers are taking the lead on digital payments usage,” he said, with 73 per cent of respondents citing customer experience as a reason for investing in digital payments.
Businesses using digital payments were also 82 per cent more likely to increase their customer base, 83 per cent more likely to increase revenue and 84 per cent more likely to experience better relationships with customers.
Mobile payments were the top area of investment and one-third of businesses planned to invest in “tap to pay” technology.
“It’s encouraging to see [businesses] recognise mobile payments and tap to pay as the next frontier in the future of digital payments for businesses in Australia,” Mr Durrance said.
University of Sydney Business School academic Wei Li said businesses were adopting the technology at different rates, with those in retail and financial and insurance services at the forefront.
“Our research shows the adoption rate of digital payments remains uneven across states, industries and different sizes of businesses,” she said.
“It’s reassuring to know businesses are planning to invest substantial budget tapping into 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.”
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