Across the Asia-Pacific region, how customers pay is changing faster than many businesses can keep up. From mobile wallets to Buy Now, Pay Later (BNPL) services, consumer demand for flexible payment methods is growing. Yet, despite this shift, many small businesses are still reliant on outdated payment systems, creating friction at checkout and limiting sales potential. According to the 2024 Xero Global Payments Report, this gap is becoming more pronounced in key markets like Australia, Singapore, and New Zealand, where digital payment adoption is accelerating. Businesses that fail to offer multiple payment options risk losing customers to competitors who do. This article explores the latest payment trends in APAC, their implications for small businesses, and how companies can stay ahead of shifting consumer expectations.
The Growing Payment Gap: Why Businesses Must Act Now
According to the 2024 Xero Payments Report, consumers are embracing digital-first payment solutions, but businesses have been slower to adapt. In Australia, 86% of consumers prefer credit or debit cards, yet only 55% of small businesses accept them. This disparity means customers are often unable to pay in their preferred way, leading to frustration and lost revenue.
Singapore presents a different challenge. Despite its reputation as a fintech hub, 79% of Singaporean consumers still use cash, yet 51% of small businesses are moving away from cash acceptance. This mismatch suggests businesses may be underestimating consumer reliance on traditional payment methods while also lagging in fully committing to digital transformation.
The impact is clear—one in four consumers will shop elsewhere if they cannot use their preferred payment method. By proactively offering diverse and secure payment options, small businesses can increase customer satisfaction, boost retention, and strengthen cash flow.
The Rise of Mobile-First Transactions
Smartphone-based payments are quickly becoming the norm across APAC. In Australia, 24% of consumers use Apple Pay or Google Pay, yet only 17% of businesses support these payment methods. This means nearly a quarter of potential customers may experience payment friction when making a purchase.
Singapore is seeing an even stronger shift, with three in ten consumers now relying solely on their mobile for transactions. The rapid rise of digital wallets signals a need for businesses to invest in mobile-friendly payment infrastructure, ensuring they can cater to younger, tech-savvy consumers who expect seamless, tap-and-go experiences.
BNPL’s Impact on High-Value Purchases
BNPL services are becoming an essential part of retail and e-commerce transactions, particularly among younger demographics. 31% of Australian Millennials use BNPL, yet 68% of businesses do not currently offer it. This disconnect means that businesses may be missing out on customers who prefer to spread their payments over time.
Beyond consumer demand, regulatory attention is increasing. Australia is introducing new BNPL compliance rules, requiring businesses to adapt their offerings in line with industry standards. Those who act early will avoid last-minute regulatory changes and capture a growing customer base that prefers alternative financing options.
The Regulatory Push Shaping Payments in APAC
Governments across the region are actively reshaping the payments landscape through policy reforms and regulations. In Singapore, the Monetary Authority is working on consolidating payment regulations to drive fintech innovation and improve security. This push is designed to streamline payment processes, reduce fraud, and encourage greater digital payment adoption.
Australia is also making regulatory changes, including new legislation for BNPL services, modernising payment systems, and implementing stricter oversight on digital asset platforms. Businesses that stay informed and compliant with these changes will be better positioned to navigate shifting regulatory requirements and maintain trust with customers.
How Businesses Can Future-Proof Their Payment Strategies
The best way for small businesses to stay competitive and financially resilient is to ensure they are offering flexible, secure, and modern payment options. To achieve this, they should:
- Expand accepted payment methods to include mobile wallets, BNPL, and digital invoicing.
- Prioritise security and compliance by keeping up with regulatory changes in digital payments.
- Monitor regional payment trends to understand evolving consumer expectations and behaviours.
The 2024 Xero Global Payments Report offers data-driven insights on how payment trends are shifting across APAC markets. By staying informed, businesses can anticipate consumer behaviour, adapt to regulatory changes, and position themselves for long-term growth.
Stay Ahead of Trends with the 2024 Xero Payments Report
Payment trends in APAC are evolving rapidly, and businesses that fail to align with shifting consumer expectations risk losing both revenue and customer loyalty. As digital wallets, BNPL, and contactless payments become more common, customers are increasingly choosing where to shop based on convenience and flexibility at checkout. Understanding these trends is essential for businesses looking to remain competitive in an increasingly digital-first economy.
Download the 2024 Xero Payments Report for comprehensive insights into the latest payment trends across Australia, Singapore, New Zealand, and the broader APAC region. By exploring consumer preferences, regulatory developments, and emerging payment technologies, the report equips businesses with the knowledge needed to navigate this evolving landscape.
