More than half (57 per cent) of Australians have singled out low digital literacy as an obstacle to running their business more efficiently.
Accord to PayPal's Digital Literacy Report, the growth of Australian SMBs is being held back by a lack of technology comprehension.
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PayPal Australia managing director, Jeff Clementz, said it is important for local SMBs to take advantage of every opportunity the Internet offers.
"Small businesses are a cornerstone of the Australian economy," he said.
"It is vitally important that public and private sector unite to empower their ongoing success, ensuring that technology does not serve to disproportionately favour geographies, demographics or industry sectors."
Although 65 per cent of respondents said that conducting business online is important for growth, only 14 per cent said they are taking advantage of the Internet for business.
Australian consumers have demonstrated an increasing reliance on the Internet to find information about SMBs, yet the survey found that only 34 per cent of businesses list their contact details online.
A third of PayPal Australia's payment volume is done over mobile devices, yet 43 and 23 per cent of SMBs access the Internet for business purposes using a smartphone and tablet respectively.
Clementz said PayPal is aiding local businesses across Australia to ensure they get the most out of the online experience.
"For example, implementing a more secure payment option to ensure their website is PCI compliment, or leveraging our existing mobile technology platforms to tap into the growing number of consumers that are using their smartphone to shop or search for services," he said.
Other key findings included 22 per cent of SMBs advertising online and eight per cent using the Cloud for their business.
Patrick Budmar covers consumer and enterprise technology breaking news for IDG Communications. Follow Patrick on Twitter at @patrick_budmar.