Survey: unoptimised payment strategies could cost merchants millions

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, 36% said that 11-25% of their revenue is being lost due to shortcomings in their payment gateway, and 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 (GBP 100+ million 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 GBP 1 million (1% lost revenue) a year, and 39% losing a minimum of GBP 11 million (11% lost revenue).

The majority of respondents (40%) said that they would need to make these improvements by the end of 2022 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.

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, 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 is a concern, as 37% participants felt like their use of data to inform their payments strategies could be improved.

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.