- 91% UK and German businesses surveyed estimate they could be losing up to 25% turnover due to due to shortcomings in their payment gateway
- 2022 could be a pivotal year for payments strategies, with 40% participants saying they need to make improvements to optimise their systems by the end of the year and 23% saying by the end of H1 2022, to avoid further losses
- Unlocking data insights identified as key to optimising payments, but more than a third (37%) conceded that their use of data to inform strategy has room for improvement
- A lack of in-house resources and skills (cited by 34%) and a lack of budget or cost issues (cited by 34%) are also holding back investment in optimising payments systems
London, 20th April 2022: A new survey of Senior Payments Professionals from leading global payment service provider emerchantpay has found that merchants across a range of industries are seeing substantial losses as a result of unoptimised payment strategies.
In the Great Payments Transformation report, 91% of the 954 payment leaders in the UK and Germany estimated they were experiencing revenue losses due to shortcomings in their payments systems. Of this number, over a third (36%) said that 11-25% of their revenue is being lost due to shortcomings in their payment gateway, and over half (55%) predicted losing up to 10% of turnover.
When looking at the impact on an organisation’s profitability, the survey found that 39% of the largest businesses (£100m+ turnover) estimate 11-25% of their revenue is being lost, while 54% say up to 10% is being lost due to a lack of optimisation in payments. This equates to 54% losing a minimum of £1m (1% lost revenue) a year, and 39% losing a minimum of £11million (11% lost revenue).
Those surveyed were keen to implement change swiftly, with nearly a quarter (23%) saying they would need to make improvements to their payments strategy by the end of H1 2022 and a further 40% saying change must happen by the end of the year, to avoid losing customers and revenue.
The majority of respondents (40%) said that they would need to make these improvements by the end of 2022 (in the next 7-12 months) to avoid losing customers and revenue. 29% said they would need to take similar action in the next 13-23 months, while nearly a quarter (23%) in the next six months. It’s evident that organisations acknowledge the need for change to keep up with demand – driven by consumers and the industry alike.
In addition, payments performance is at the front of mind for merchants, with 80% saying regular performance reviews are crucial as an area of customer support from their payment service provider.
However, several barriers to investing in optimising payments performance were identified when respondents were asked about their top three blockers. Regulation and compliance burdens were cited by 38% of respondents as taking away time and focus. In addition, more than a third (36%) of participants said a lack of data or access only to poor quality data was an issue. This is further amplified by a lack of in-house resources and skills hindering change, as cited by 34% participants. Data in particular is a concern, as 37% participants felt like their use of data to inform their payments strategies could be improved.
Svetlio Todorov, Managing Director at emerchantpay comments, “Improving payments strategies can deliver huge commercial benefits to businesses, helping to boost profit margins. However, while they understand this, payment leaders are being distracted by regulation and compliance, while experiencing a lack of high-quality data and a shortage of in-house skills. They know they need to act now to transform their payment strategies and systems, but lack the insights needed to drive change and buy-in from the wider business.
“By providing hard data and evidence to demonstrate why it pays to invest in optimised payment processes, strategic payments partners can give payments leaders the tools they need to build a case for continued innovation. Payments transformation is critical if merchants are truly going to keep up with customer demand and respond to the revenue losses identified in this research.”
Looking at what is required in a payment service provider (PSP), one that could tackle specific issues was favoured. Just under a third of payments leaders (32%) cited offering a range of global payments options as a priority, with a further 32% looking for payment routing capabilities. A further 30% looked for integration options and 29% were seeking anti-fraud solutions from their PSP. Interestingly, low rates was the least popular response (22%), suggesting merchants are willing to invest in a PSP that will help them move the dial on issues that need to be addressed.
The research was conducted by Censuswide, with 954 Managing Director, Payment Manager, Finance Director, Heads of Payments in company with a turnover of £1 million to £10 million (25% of sample), £10 million to £50 million (25% of sample), £50 million to £100 million (25% of sample), £100 million or more (25% of sample) in the following industries: gambling, travel, airlines, online retail, hospitality in Germany and the UK. Quotas were applied across all industries to ensure a minimum number of completes per industry. The fieldwork took place between 30.12.2021 – 07.02.2022. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.