Reserve Bank of Australia data shows payments using mobile wallets accounted for 11 per cent of retail sales in 2020, surging to 35 per cent in three years later in 2023. Mobile wallets could surpass retail card payments by 2032 if current trends continue, according to Peter Drennan, research and data expert at Australian financial comparison platform Money.

“We’re seeing a glimpse into a future where your phone is your entire wallet and all transactions are made via a mobile phone, smartwatch or other device,” he said. 

“Unlike physical cards, which can be forgotten, lost, or stolen, e-wallets provide a more convenient alternative for everyday payments.” 

In October, more than 500 million mobile wallet transactions totalled $20 billion, according to latest RBA data. However, with mobile wallet usage at 37 per cent, the adoption rate could be slowing.

Drennan said mobile wallet providers such as Apple Pay and Google Pay must develop tactics to maintain fast adoption rates.

Furthermore, there is a significant variation in the size of transactions done using mobile wallets compared to traditional cards. The current average transaction value for mobile wallets is $40, which is much lower than the $84 average for non-mobile wallet transactions.

“Younger generations are more inclined to set up e-wallets and use them for small transactions, which likely results in a smaller average spend. I’d also assume that people still tend to reach for a physical card when making larger transactions,” Drennan added.

This story first appeared on our sister publication Inside Retail

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Meant for business-to-business transactions, eInvoicing (or electronic invoicing) lets you exchange invoices digitally through shared software, eliminating the need to print or email them. While it’s still optional right now, it’s set to become the new industry norm.

Over 130,000 Aussie businesses are currently registered for eInvoicing, with adoption growing as more software providers integrate it. The recent Federal budget also allocated $23.3 million to help small businesses adopt eInvoicing.

If you’re feeling a bit overwhelmed by the shift, we shall break it down and show you how this change can be a win for your business.

The right software support

eInvoicing works through standard, secure networks, allowing invoice data to be exchanged between different software systems. In Australia (and many other countries), this standard is the Peppol network. To use eInvoicing, both your business and the recipient’s business must use software that connects via Peppol, where Australian Tax Office-approved service providers securely deliver invoices.

The Australian eInvoicing system is designed to integrate easily with your accounting software. Many small-business providers, like Xero, already offer eInvoicing. So, start by checking if your current system supports it. If not, it might be worth switching to avoid a complicated setup.

When choosing new software, remember to look for:

• Ease of use
• Good integration with your existing systems
• Local customer support

A good invoicing solution will help you stay compliant, streamline your process, and reduce errors.

Slashing scams and late payments

The recent Pursuing Payments Report by GoCardless revealed that one in five Australian business owners are losing between $6,000 and $30,000 each year due to late payments, and more than half expect the problem to get worse this year. eInvoicing automates the invoicing process to facilitate more timely payments.

eInvoicing also reduces the number of late payments and builds better business relationships by encouraging prompt, reliable transactions. It can help to prevent delays and miscommunications, allowing everyone involved to move forward smoothly and avoid any financial hiccups.

eInvoicing’s advanced security features, like encryption and secure transmission, protect your data from scams and unauthorised access. Plus, by storing everything electronically, it cuts the risk of losing or damaging physical invoices and makes it a breeze to manage and find your documents when you need them.

What to do with the money saved

Traditional invoicing often comes with high administrative costs, including expenses for paper, printing, postage, and manual processing time. eInvoicing helps cut or eliminate these costs by automating many of these tasks. With digital invoicing, you can lower your operational expenses, boost efficiency, and allocate resources more effectively. Plus, reducing errors and rework from manual invoicing can lead to even more savings both financially and in human resources. 

With late payments dramatically reduced, your cashflow will also become more secure, giving you more cash on hand to reinvest in your business. According to the Pursuing Payments Report, if customers paid on time, 31 per cent of business leaders would use the extra funds to grow their business, 30 per cent would pay suppliers sooner, and 28 per cent would invest in other areas. This creates growth opportunities even in a sluggish economy, allowing you to explore marketing, new products or services, and even hiring more support.

Switching to eInvoicing is a chance to remove pain points in your invoicing process and boost your business’s efficiency. You’ll not only keep up with the new invoicing standard but also improve relationships, reduce late payments and increase cashflow. 

The post Why (and how) to adopt eInvoicing appeared first on Inside Small Business.

The survey found that 62 per cent of SMEs are conducting their international trade through the big four banks this year, meaning that they are being charged with higher exchange rate mark-ups and fees than specialist money transfer providers. Furthermore, an additional 14 per cent transact through a smaller bank and 31 per cent use the same bank or provider for their money transfer needs.

In a recent report, the ACCC noted that international money transfer fintechs offer better prices than the big four banks, even after the latter removed or reduced flat fees on transfers in the last five years. Money Transfer Australia also pointed out that for every $20,000 exchanged through the banks, businesses could be paying up to $850 extra, compared with as low as $100 through a non-bank money transfer provider.

Surprisingly, the survey also found that 88 per cent of SMEs know how much they are paying in fees when they transact internationally, and 89 per cent know how much they are paying in currency exchange mark-ups. 91 per cent also check the fees and mark-ups payable before they transact.

The survey also noted that the larger the business, the more likely they are to use a bank for international money transfers. A total of 74 per cent of those with more than 200 employees use a big-four bank, compared with 68 per cent of those with 11-50 employees and 45 per cent of micro businesses. Furthermore, the larger the business, the more likely it is to also use the same bank or provider at 42 per cent of large businesses, 33 per cent of small and medium-sized businesses and 25 per cent of micro businesses. Meanwhile, small businesses (11-50 employees) paid more attention to the extra fees in transferring money internationally.

Why businesses are sticking to the banks

As to why most businesses still conduct foreign trade through banks, 51 per cent said they trusted banks more and 31 per cent said they prefer to have access to ‘people on the ground’ in Australia over an online service, which potentially offers support staff offshore. Furthermore, 30 per cent don’t like to switch to new service providers that they are not familiar with and 15 per cent enjoy preferential rates through their bank. 14 per cent, meanwhile, prefer to do all their banking in one place.

Money Transfer Australia founder Alon Rajic commented, “In 2023-2024, Australian businesses closed down at almost the same rate as new ones opened. In the volatile economy of the past few years, it makes good sense for businesses to identify where they could further cut costs.”

“In the current economy especially, it is understandable that business owners want to stick with a money transfer service they know and trust. What many people don’t understand is that some non-bank money transfers specialists, such as TORFX and OFX, have been in business for as long as 20 to 25 years. They are ASIC authorised, well-established and reputable.

“Being complacent about bank fees or fearful of change can cost a business. Specialist providers don’t charge extra fees and offer exchange rates well below the going mid-market rate. It pays to shop around.”

The report also underscores the robust foreign trade Australia is experiencing, with the Australian dollar being the sixth most traded currency in the world. Foreign investment hit $4.7 trillion in 2023, while international goods trade jumped another $537 million in June 2024 alone. To date, Australia’s overall international trade is worth 48 per cent of its GDP.

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The move has been lauded by various parties.

“This funding is very important for SMEs and provides the ability to adopt eInvoicing that would enable better cashflow management and ensure timely payments,” said Robin Sands, CEO of Link4, a leading eInvoicing solutions provider.”

Currently, while government agencies are already paying eInvoices within just five days, thus dramatically improving cashflow for countless businesses, this is not yet the case for B2B transactions.

Sands pointed out that eInvoicing can significantly reduce payment delays. “Digitising the invoicing process streamlines payments, providing clear, accessible records of transactions,” he said. “If an invoice comes into the accounting system in an efficient way, it is easier for it to be paid faster.”

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) previously reported that one in four large businesses takes over 120 days to pay small business customers, with only 30 per cent paying within 30 days. As such, small businesses are experiencing late payment rates three times higher than larger corporations.

In response, the Federal Government implemented the ‘Payment Times Reporting Scheme’, which sought to address the late payments issue by mandating large businesses to report their payment times to small businesses and improve payment performance. 

“For SMEs, overdue invoices are more than just a hassle; they severely hinder growth,” Sands said. “Cashflow is the lifeblood of any business. Disruptions can stifle expansion and day-to-day operations.”

Sands pointed out that delayed payments impact not just individual businesses but the broader Australian economy. “When SMEs face payment delays, their ability to invest, hire, and grow is constrained. This stifles innovation and job creation,” he explained.

Sands further remarked that large businesses may see delayed payments as a financial safeguard, but this overlooks the broader impact. “Lengthy payment cycles can harm reputations and lead to higher future costs as suppliers raise prices to cover risks. Ultimately, this cost-saving measure can become more expensive over time,” Sands added.

“The problem of delayed payments is complex, but eInvoicing offers a clear solution. By embracing eInvoicing, businesses can improve efficiency, transparency, and standardisation, leading to faster payment cycles and healthier cash flow. For SMEs, this can mean the difference between stagnation and growth,” Sands concluded.

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Small businesses are lagging behind payment trends

The new ʻI want to pay that wayʼ report found that Aussies remain firmly in favour of using credit or debit cards (86 per cent) to make in-person and online payments. However, only 55 per cent of small businesses offer credit or debit cards as a payment method. Bank transfer (68 per cent) is the most common payment method offered by small businesses, followed by cash (59 per cent).

Gen Z consumers (40 per cent) are more than four times more likely to use Apple Pay or Google Pay than Baby Boomers (9 per cent). Despite this, only 18 per cent of small businesses accept mobile payments as a payment method.

Similarly, consumer demand for buy now, pay later options is outstripping availability of this payment option from small businesses. While 23 per cent of consumers want pay later options, only 14 per cent of small businesses offer these. The demand increases for millennials, with 31 per cent saying they use buy now, pay later for purchases.

Meanwhile, 28 per cent of customers say they would seek out another business that accepts more payment options if a business didnʼt offer at least one of their preferred ways to pay, highlighting the importance of meeting consumer expectations around payment preferences.

“Aussie consumers are increasingly embracing digital payment methods, particularly younger generations,” said Theo Konstantas, Sales Director Australia, Xero. “However, small businesses don’t seem to be meeting their customers where they are. There’s still a gap when it comes to options like Google Pay, Apple Pay, and even traditional credit and debit cards among small businesses. You can really see the hesitation to adopt new payment methods.”

What small businesses are saying

According to the research, Aussie small businesses that have implemented new payment methods say they are seeing clear benefits. 24 per cent say they don’t wait as long to be paid, 18 per cent say they are spending less time chasing late payments, and 20 per cent have seen increased sales.

However, 53 per cent have not adopted new payment methods in the past six to 12 months. According to Xero, many businesses are nervous about added costs. 36 per cent of SMEs reported expense as the biggest barrier preventing them from offering new or different payment methods.

“There are many benefits to offering more ways for people to pay, such as faster payments and the potential to expand your customer base,” said Konstantas. “With a drive to digital, small businesses that don’t meet consumer preferences might find themselves falling behind.”

Customers and SMEs alike are “anxious” about the future of payment

The research also reported that 79 per cent believe that the sudden move to a cashless economy would have some impact on their business but overall, the use of cash and cheque may be declining. Only 25 per cent of consumers rely on them to buy products and services, and 41 per cent say they rarely use cash and cheque payments, only when a business asks for it.

Despite the mismatch between what consumers want and what small business offers, their feelings align on future payment methods. Emerging payment methods are causing a level of anxiety amongst consumers and small businesses alike, with digital currencies like crypto causing the most anxiety (27 per cent) among small businesses. Implantable payment chips are the greatest source of apprehension with 37 per cent of small businesses and 47 per cent of consumers feeling ʻterrifiedʼ about it.

Bharathi Ramavarjula, SVP of Payments, Xero, commented, “Understanding how different consumers prefer to pay and giving them the flexibility to pay the way they want, will help small businesses get paid faster and grow their revenue.”

The post Small-business payment options don’t meet shopper preferences, Xero finds appeared first on Inside Small Business.

The acquisition will allow CashRewards to integrate the latter’s product search algorithms into its cashback platform and provide combined service to help members find “best prices” while earning cash back.

However, in the first phase of the integration, CashRewards will need to relaunch the Little Birdie website and app. The team said it aims to have the website available before the Black Friday and Christmas shopping season begins this year.

Once the site is relaunched, the company said it will help drive high-intent shoppers directly to retailers, allowing them to acquire new customers, increase transaction frequency, and boost revenue.

Some of the member benefits post-upgrade promised by CashRewards include seamless product search, the ability to check pricing history, getting price drop notifications, price comparisons and cash back on purchases.

Anthony Seymour-Walsh, CEO of CashRewards, said the company aims to pave the way for innovation to bring more value to customers.

“This move not only strengthens our market position but will enhance our value proposition and accelerate the growth opportunities within our cashback and retail media sectors,” he concluded.

This story first appeared on our sister publication Inside Retail.

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With this sector now estimated to be between the fifth and ninth largest lender in the country, and new research by Digital Finance Analytics revealing that 60 per cent of first-home buyers are turning to informal familial loans, Chipkie aims to bring security and transparency to these arrangements by transforming informal agreements into legally binding loans through a user-friendly interface and tracking dashboard. It automates communication, provides secure repayment solutions, and offers tailored, legally binding contracts to prevent misunderstandings, provide loan security, and preserve relationships.

Founded by female tech entrepreneur Michelle Lomas (pictured), Chipkie was born from her own experience securing a loan from family for her first home purchase in Sydney.

“I realised there was a glaring gap in tools to formalise and manage family loans beyond rudimentary spreadsheets and costly legal contracts,” Lomas said. “Chipkie fills this void by offering a free, intuitive platform that simplifies the legalities, management, and tracking of loans between loved ones.”

Recent research by Chipkie underscores the need for such solutions as even though almost half enjoyed lending money, 91 per cent of respondents cited concerns over relationship strain, awkward conversations and repayment uncertainties when lending money to family and friends. However, over a third desire to lend more to support the ones they love if there were tools that mitigate these risks.

“The ‘Bank of Mum and Dad’ now plays a crucial role for majority of Australians, not only in housing but also in supporting various life milestones such as travel, business ventures, and everyday expenses,” Lomas said. “By formalising these transactions, Chipkie empowers Australians to support their loved ones responsibly, fostering stronger community bonds.

“We envision a future where Australians embrace lending as a positive experience that grows our communities; after all, it’s now become, for most Australians, the only way to get ahead,” Lomas added. “Our goal is to see all Australians feel good about lending to loved ones and say ‘yes’ more often. Chipkie is here to make that easier, safer and more enjoyable, promoting economic resilience and community cohesion.”

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“There are real opportunities for small business in engaging with eInvoicing,” Billson shared. “It’s a great way of sending invoices in a secure way, with improved cyber protection, simplicity and efficiency. Cashflow is the oxygen of enterprise, and this is a more secure and efficient way of dealing with what is a vital part of getting paid, replacing what can be a tendinous, mundane and error-prone activity.”

Billson explained that eInvoicing allows a business to exchange invoices through a secure network using existing business software, making it easier and safer to send and receive invoices digitally with other businesses, such as suppliers, contractors or government.

“The process is entirely digital and eInvoices are not PDF invoices that need to be printed, posted or emailed,” he said.

The Ombudsman pointed out that small businesses have long been particularly vulnerable to invoice substitution scams, also called payment redirection scams or business email compromises, wherein cybercriminals can intercept emails to customers and insert different bank account details for payments. The details sent out to the unknowing small business look legitimate enough and reflects a bill they were expecting for the small business unknowingly pays it. The money then goes to the criminal’s bank account and is quickly shifted, usually to cryptocurrency, where the chances of recovering the lost money become slim, if not none at all.

“Scamwatch data shows small businesses lost millions of dollars in such scams last year. Using eInvoicing can reduce this risk,” Billson said, adding that eInvoicing can also help streamline business operations.

“No one wants to spend all their life sending out Invoices. Imagine if that system was connected with your customers and your suppliers, he said. “You can send the information off, you validate that it’s the right people with all the critical information to execute the payment.”

The Federal government has already taken steps in pushing eInvoicing, as it has committed to spending $23 million of the Federal Budget for its adoption among small businesses, alongside efforts to incentivise its use with faster payment times by its suppliers, both of which have been acknowledged and commended by the Ombudsman.

In addition, Billson also commended the efforts of finance software providers in offering eInvoicing in their platforms,

Billson concluded with reiterating the call towards a shift to eInvoicing, saying, “For small and family businesses, I urge taking up the eInvoicing option to really streamline their dealings with other business and government customers, expand the use of eInvoicing across a growing network of users and increase the benefits to individual businesses and the economy that the technology offers.”

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Automate invoice processing to prevent late payments

A recent IBM report named AP the “most automatable” function in any business. Amongst large finance teams, manual AP tasks can take up 44 per cent of their total time. These manual tasks include entering invoice information into the company’s financial systems, making payments, and reconciling transactions. When data is manually entered and processed through these systems, there can be a higher likelihood of errors, which leads to more costly invoice processing. In contrast, implementing an integrated payment system where every invoice and payment stems from a single source of truth facilitates more efficient invoice processing and speeds up cash flow across the supply chain.

Take advantage of flexible payment options

By using AP automation and integrated payment software, businesses can significantly enhance their invoice processing efficiency. This streamlined approach allows for faster handling of supplier invoices, reducing manual involvement. Moreover, businesses can benefit from a variety of flexible payment options that align seamlessly with their cashflow needs.

One such option is early settlement discounts. In exchange for paying an invoice before the due date, a discount is offered. Although the specifics of these discounts may vary across different businesses, consistently taking advantage of even small discounts can accumulate substantial savings over time. Furthermore, this practice fosters stronger relationships with suppliers, potentially leading to additional pricing efficiencies and improved trade terms. 

Extended payment terms can also be a valuable addition and they allow AP teams to strike a balance between meeting financial obligations and maintaining liquidity. Credit cards play a crucial role in this strategy. When paying invoices, AP teams can use physical or virtual credit cards to delay the actual cash outflow by taking advantage of interest-free periods, or access to working capital offered by their provider. These extended terms provide a win-win situation, benefiting both parties involved.

Strengthen cashflow management

AP automation gives your business access to a more accurate data set which is essential for proactive cash flow management. By using a system that automates invoice processing and integrates with your accounting and ERP systems, the data can be visualised in a real-time cash flow analysis, showing decision-makers when payments need to be made. This allows for timely adjustments in either delaying or moving payments forward to best align with the company’s long-term objectives. Finance teams will also have the data to plan for future purchases and investments in growth.

Transform your accounts payable function today

Technology is driving transformation for AP teams. By replacing legacy manual systems and processes with sophisticated software that improves efficiency, reduces data entry errors, and facilitates stronger cash flow across the supply chain, AP teams can transform into a strategic, revenue-generating function that brings value to the business. If you’re looking to make your AP function more efficient and strategic, automating your AP processes is the best place to start.

Spenda’s AP solution features a user-friendly self-guided setup, allowing users to onboard themselves effortlessly and efficiently streamline their payables. Additionally, approved account holders have access to a range of payment methods, including the option to apply for an unsecured credit facility (using virtual credit cards) to pay business expenses. To ensure security, payments are protected by Spenda Wallet, a payment authorisation app that works seamlessly alongside Spenda AP. These two integrated products not only expedite invoice payments but also provide a robust defence against accounts payable fraud.

To set up a Spenda account and get 30 days free*, click HERE

Spenda is an integrated business platform that enables businesses across the supply chain to sell better and get paid faster. We serve as both a software solutions provider and a payment processor and deliver the essential infrastructure to streamline business processes before, during and after the payment event. Our connected platform displaces multiple, disparate systems in favour of one collaborative solution that improves transactional efficiency between businesses. 

This article is for general information purposes only. Consult a qualified financial advisor regarding any changes to or decisions about your business’s finances.

*30 Days Free Terms & Conditions. By signing up, you are entitled to a complimentary 30-day trial of Spenda’s Accounts Payable software. This trial covers only software usage fees and excludes invoice payment processing fees. Following the trial period, you will be given the choice to upgrade to a paid account or to delete your account. Monthly software fees start at $250 per month. Enterprise fees are available on request.

The post <strong>How to transform your accounts payable function into a strategic powerhouse</strong> appeared first on Inside Small Business.

The report notes that global M&A (mergers and acquisitions) deal value declined from US$98.2 billion in 2022 to US$56.4 billion in 2023, and that global VC (venture capital) investment fell from US$88.8 billion to US$46.3 billion in the same period.

Australia reflected the global trend, experiencing a 76 per cent drop in fintech deal value in 2023 to US$587.5 million, while the deal count fell by a third to 95 transactions.

Notable Australian fintech deals tracked by the report include taxi payment platform operator A2B’s acquisition by Singapore-listed transportation firm ComfortDelGro for $109.5 million, and deferred payment loan provider Midkey raising US$50 million in early-stage venture capital. In addition, one of Australia’s leading robo-advisers, Stockspot, was acquired by Korean firm Mirae Asset Global Investments, while Rich Data Co. raised US$17.5 million and SME lender Lumi raised an additional US$15 million.

Dan Teper, Head of Fintech at KPMG Australia, said that 2023 was a challenging year for the Australian fintech ecosystem, with both total deal value and deal count experiencing a sharp decline compared to previous years.

“The local market, as with the majority of global markets, has been impacted by a number of challenges including, but not limited to, a higher inflation and corresponding higher rates environment, and a change in overall risk appetite amongst investors,” Teper said.

“Looking ahead, we expect fintech growth in Australia to continue to be modest, and with interest rates unlikely to shift materially in the near term, funding and availability of capital are likely to remain a key challenge for local players,” Teper warned.

Given the ongoing global conflicts, current high interest rates in place, and the continued lack of exits, fintech investment is expected to remain soft for the rest of the first quarter of 2024. However, as interest rates are expected to stablise, and possibly decline, investment could begin to pick up. AI and B2B solutions will likely remain big tickets for investors, and M&A activity could also start to rebound as investors more seriously look at distressed assets.

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