Just 8% of Kiwi consumers now readily have cash on hand to pay for things in store, reveals a new report.
Xero’s newly published ‘I want to pay that way’ report surveyed more than 6,000 adults across New Zealand, the UK, the US, Australia and Singapore about their payment preferences. The report found that Kiwis were the least likely to use cash payments of all countries surveyed.
A quarter (25%) of Singaporeans ensured they had cash readily available when shopping, while 20% of those from the US did the same. That number drops to 19% for the UK. The average across all countries surveyed was also 19%.
Card payments dominate in New Zealand, with 86% of consumers using credit or debit cards to make payments.
“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. As technology continues to evolve and convenience remains king, it’s important we continue to progress in this direction,” says Bridget Snelling, Aotearoa New Zealand Country Manager at Xero.
According to the latest data from the Reserve Bank of New Zealand (RBNZ), 35% of Kiwis had not used cash in the past seven days, while 3.7% never use cash at all.
Younger generations driving mobile payments
Xero’s report found that a quarter (25%) of those in New Zealand used either Google Pay or Apple Pay to make payments. But that number climbs significantly for younger generations.
Almost half (48%) of Gen Z use Google or Apple Pay, compared to 28% of Millennials, 17% of Gen X, and just 11% of Baby Boomers.
However, while younger consumers are eager to pay by mobile, many small businesses have not yet adapted to meet the need.
“It’s clear there is a strong preference for using digital payments by Kiwi consumers. 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,” says Snelling.
Fee frustration for consumers and businesses
Xero’s report also found that a majority of consumers still feel there is a lack of transparency regarding fees. This is in spite of the Retail Payment System Act which came into effect in 2022 and made law the requirement for businesses to clearly display payment surcharges.
More than three-quarters (77%) of respondents reported hidden fees or surcharges as a top frustration when they were making payments. Twenty-nine percent also said that they were not at all accepting of payment surcharge fees.
High fees were also a key reason why small businesses failed to offer different payment methods to customers. Thirty-two percent of small businesses surveyed named high fees as a barrier to offering new payment methods, while 37% said that there was no demand from customers for new payment methods.
