The future of healthcare is digital—is your payment system keeping up?

Healthcare is undergoing a profound transformation. Digital health innovations such as telemedicine, AI-powered diagnostics, and wearable devices have revolutionised how care is delivered. However, one critical area often overlooked in this digital evolution is payment systems. While healthcare providers adopt cutting-edge technologies to improve patient outcomes, many still rely on outdated payment methods that no longer meet the demands of today’s consumers.

The Xero Payments Report provides valuable insights into the shifting landscape of payment preferences. It highlights how businesses across industries, including healthcare, can modernise their financial systems to align with these changes. In an era where digital transformation is a must, optimising payment processes is no longer optional—it’s an essential step toward growth and resilience.

Why payment preferences are now a priority

Consumer expectations for payment experiences have changed dramatically. The Xero Payments Report reveals that 86% of consumers still rely on credit and debit cards, but there’s a sharp rise in demand for alternative payment methods. Digital wallets like Apple Pay and Google Pay are rapidly gaining traction, particularly among younger demographics. For Gen Z, 50% now prefer mobile wallets—a significant signal for healthcare providers catering to digitally native audiences.

In the healthcare context, offering flexible payment options is about more than enhancing convenience; it’s about trust and accessibility. Patients often face financial stress when managing medical expenses. Providing multiple ways to pay, from digital wallets to buy-now-pay-later (BNPL) services, can ease this burden and improve satisfaction. For younger patients and families who are accustomed to seamless digital transactions in other industries, healthcare organisations must adapt to these expectations or risk losing trust and loyalty.

Additionally, the report highlights that 37% of consumers would consider switching providers if their preferred payment method wasn’t available. For healthcare providers, this underscores the importance of staying ahead of consumer preferences. Whether it’s a small clinic or a large hospital system, failing to offer flexible payment solutions can directly impact patient retention and revenue.

The cost of outdated payment systems

The financial health of a healthcare organisation is tied to how efficiently payments are processed. Late payments from patients, insurers, or partners can create significant cash flow challenges, especially for smaller practices or startups in the digital health space. According to the Xero Payments Report, businesses using modern digital payment systems experience payments up to 15 days faster than those relying on traditional methods.

In the healthcare industry, where cash flow is critical for maintaining operations, these delays can lead to disruptions. Imagine a hospital waiting on overdue insurance reimbursements or a telehealth startup unable to scale due to irregular income streams. Faster payment cycles enabled by digital systems ensure that organisations can invest in new technologies, pay staff on time, and meet the demands of growing patient populations.

Automating payment processes also reduces administrative burdens. Healthcare organisations already face significant workloads in managing claims, billing, and regulatory compliance. Manual payment methods, such as checks or paper-based invoicing, add unnecessary complexity and increase the likelihood of errors. By integrating digital solutions, healthcare providers can save time, minimise mistakes, and redirect resources to patient care.

Transparency: building trust with patients and partners

Trust is the cornerstone of healthcare relationships. Patients rely on providers not only for their expertise but also for fairness and transparency in financial dealings. The Xero Payments Report reveals that 66% of consumers are frustrated by hidden fees—a sentiment that’s particularly relevant in healthcare, where billing can already be complex or confusing to understand.

Providing clear, itemised invoices and upfront cost estimates can significantly enhance trust between healthcare providers and their patients. Digital payment platforms like Xero make this process seamless, ensuring patients are fully informed about their charges and payment options. This level of transparency also extends to vendors and suppliers, fostering stronger partnerships built on reliability and mutual respect.

For digital health companies collaborating with external partners, such as software developers or hardware manufacturers, transparent invoicing and real-time payment tracking create smoother transactions. Automating these processes reduces disputes and helps maintain positive working relationships, which are vital for innovation in this space.

The intersection of digital health and payment systems

The digital health sector, encompassing everything from wearable devices to AI-powered diagnostics, thrives on innovation. However, the financial infrastructure supporting these advancements must keep pace. Payment systems that offer flexibility, transparency, and efficiency are essential for the continued growth of this industry.

For example, telemedicine platforms often rely on subscription models or pay-per-use fees. Digital payment solutions simplify these transactions, ensuring that patients can easily pay for services and providers can quickly collect fees. Similarly, startups developing health apps or wearable devices can use automated invoicing to streamline their operations, allowing them to focus on scaling their technology.

The Xero Payments Report highlights how digital wallets and mobile payment systems are becoming the norm, with 30% of consumers now using these methods regularly. Adopting these technologies signals to patients, partners, and investors that your organization is forward-thinking and aligned with the demands of a tech-savvy population.

Preparing for the future of healthcare payments

As the healthcare industry continues its digital transformation, payment systems must evolve alongside care delivery. The next generation of patients and providers will expect frictionless, secure, and transparent transactions at every level of the healthcare ecosystem.

The Xero Payments Report offers a blueprint for healthcare organisations to adapt to these changes. By integrating modern payment solutions, automating processes, and embracing transparency, providers can enhance patient satisfaction, improve cash flow, and build stronger partnerships.

Xero empowers healthcare businesses to simplify payments, reduce delays, and focus on delivering exceptional care. In an era where digital health is reshaping the industry, modern payment systems are not just a convenience but a critical component of success.