New research has revealed food delivery payment flexibility could be the factor that makes or breaks your business in the increasingly competitive hospitality landscape.
In today’s competitive business landscape, consumers have more choices than ever. The rise of third-party delivery apps and the growing demand for convenience are putting pressure on hospitality businesses, especially small restaurants grappling with the cost of doing business. For these businesses to remain competitive and thrive, they must fully understand their customers’ purchasing behaviour and decision-making criteria.
A new report, the 2025 Ecommerce Payments Experience Report, from Power Retail in partnership with Payments Consulting Network (PCN), supported by Stripe and Zip, has revealed that payment options can have a significant impact on conversion rates and could be the factor that determines whether a potential customer converts and becomes a loyal customer, or turns to competitors for more convenience.
According to the research, payment flexibility may just be the deciding factor for many customers as they seek options that work with their financial circumstances.
What does this mean for small hospitality businesses and restaurants?
As these services have become more widely accepted, their role in shaping purchasing behaviour is more apparent than ever. Forty percent of consumers have used BNPL options in the past six months alone. This suggests that the trend is not only growing, but is becoming a preferred choice for a significant portion of the population, particularly for discretionary purchases like food delivery.
For small restaurants, adopting BNPL could significantly impact their food delivery business. If a consumer can pay for a meal in installments, they may be more inclined to place an order, even when faced with higher-than-usual prices or larger orders. This can result in more frequent and larger orders, especially during peak periods like weekends or holidays, where spending can be higher.
The younger generations are leading the charge on this, with a strong preference for BNPL services. Among consumers aged 25-34, 58 percent are now using Flexible Payment Options, with 18-24-year-olds not far behind at 53 percent. The 35-44 age group comes in third at 49 percent. These younger consumers are driven by their desire for greater control over their finances, especially in the face of economic uncertainty.
Mangala Martinus, Managing Director of Payments Consulting Network comments, “In today’s competitive landscape, consumers have a wide range of businesses to choose from. So, it is crucial for businesses to understand consumer purchasing behaviour and decision-making criteria and adapt accordingly to succeed.”
It is essential to get ahead of the competition before it is too late. By understanding and actively addressing the needs for payment choices and convenience, businesses can strengthen relationships and give their customers more reasons to become loyal, repeat shoppers.
What is a flexible payment option, or Buy Now, Pay Later?
There are a lot of payment options out there, many having emerged in the past decade. Traditional payment methods like debit and credit have evolved to include digital wallets and BNPL, and are rivalled by bank transfers and flexible payment options. By familiarising themselves with these options, and prioritising the most popular and widely used methods among their consumer base, businesses can ensure they don’t lose out on sales.
Among the payment methods gaining traction, Buy Now, Pay Later (BNPL) services have emerged as a key driver of consumer purchasing decisions. While debit cards remain the most commonly used payment method, the research found that nearly 29 percent of customers use Flexible Payment Options almost as often as more traditional options like BPay, Bank Transfers, and Gift Cards/Vouchers. This shift in payment preferences reveals a growing demand for alternatives that align better with consumers’ budgeting preferences.
The Australian Bureau of Statistics (ABS) reports that the national savings-to-income ratio is currently at just 3.8 percent as of March 2025. While this is an improvement from the worrying 0.9 percent ratio seen in March 2024, it still pales in comparison to the pre-pandemic figure of 7.6 percent in September 2019. This low savings rate, combined with ongoing cost-of-living pressures, has prompted many consumers to turn to BNPL and other flexible payment solutions as a way to better manage their finances.
What can small businesses do to strengthen their position in a crowded food delivery market?
BNPL’s impact on food delivery is particularly notable. With the cost of living continuing to impact consumers in 2025, many are looking for ways to manage their spending while still enjoying their favourite foods and supporting local businesses. By offering BNPL services and flexible payment options, small businesses can tap into a large consumer base that is looking for flexibility in their spending, especially for discretionary items like dining out or ordering food delivery.
Contributed by By Rosalea Catterson