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Many small businesses continue to resist the transition to digital payment systems despite growing demand from consumers.
Research by global small business platform Xero indicates three quarters (75 percent) of consumers will use a physical bank card to pay in store, while one-in-seven (14 percent) will use their mobile phone.
Only 8 percent of customers had cash available to pay in store, compared with nearly three quarters of small businesses (72 percent) who relied on cash to keep their business going.
Xero country manager Bridget Snelling said only 17 percent of small businesses offered digital payment methods such as Apple Pay and Google Pay.
"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," she said.
"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."
She said the move to digital payments would have a broader benefit for the economy.
"Our work with the New Zealand Institute of Economic Research shows a 20 percent increase in the number of businesses adopting cloud-based business tools in the future could add up to $7.8 billion to Aotearoa's annual GDP through improved productivity," Snelling said.
Just one-third (39 percent) of small businesses adopted a new digital payment method in the last 6-12 months, with 87 percent identifying barriers to offering new or different payment methods.
Expensive fees were the top concern for about a third (32 percent) of small businesses, while a quarter either saw no clear advantages (28 percent) or believed it was too complex or time-consuming to set up.
Small businesses who had adopted new payment methods saw a benefit in reduced time to be paid (19 percent), followed by increased sales (16 percent) and reduced time chasing payments (14 percent).
"It's essential we support small businesses to embrace digital tools to unlock their full economic potential," Snelling said, adding that Xero was building payment solutions to make it easier for small businesses to make and collect digital payments more seamlessly.