UK merchants are losing sales due to failed e-payments, study shows

By Puja Sharma

UK online retail businesses could have increased their weekly gross sales by £207m during May if failed payments had not taken place, according to BR-DGE’s failed payments calculator.

The fragmented payments systems, put under increasing pressure by the massive growth in digital transactions, can result in failed transactions and unprocessed baskets. The latest ONS retail data released shows weekly online retail spending in May 2022 was £2.243b. Yet, If this was eradicated, May’s weekly online spending would have been £2.45bn. Furthermore, with intelligent routing and greater commercial leverage, through payment orchestration platforms like BR-DGE, online retailers could further gain operating margins.

Alarmingly, the research found that one in three (32%) of the busiest UK e-commerce outlets were allowing customers to submit transactions with invalid card numbers. A further four in five (82%) of big online retailers still don’t offer Apple Pay or Google Pay to customers in the UK.

The latest ONS retail data released shows online retail spending in December 2021 was £2.16b. Yet, fragmented payment systems, put under increasing pressure by the massive growth in digital transactions, can result in failed transactions and unprocessed baskets, with both merchants and customers. If this was eradicated, December’s spending would have been £2.36bn.

The Nationwide Building Society in the United Kingdom has had a bad start to the new year, with payments to and from accounts stalled as the year 2022 approached. Concerned customers contacted Nationwide to inquire about the status of incoming and outgoing payments. The building society’s status page confirmed that there were issues and that “incoming and outgoing payments are currently delayed,” but that “everything else is operating normally. The issue appears to be with money sending and receiving.

This latest set of figures will make for tough reading amongst hard-hit retailers who have been impacted by the double blows of increased costs and tightening consumer purse strings. However, more positively for e-commerce businesses, the data shows that they could have generated around £207 million extra each week in May if the customer failed payments hadn’t taken place.

Jacob Spencer, Head of Commercial at payments firm BR-DGE, said: “Online sales are a core part of U.K. retail’s recovery but, with 65% of retailers not receiving detailed failed payments data, many merchants are unaware of the impact that failed payments has on their business. BR-DGE technology allows online retailers visibility around their failed payments data and empowers retailers with a range of payment solutions for consumers via single API integration. Online retailers must prioritise finding payment solutions that integrate multiple providers and payment methods to avoid ongoing failures and support online shoppers with the technology to pay how they want.”

Key highlights

• Merchants lost billions of dollars as a result of failed online card payments up to 15%
• Payments fail for many reasons – some caused by the customer, others by the card network
• There is a specific solution for each of these issues. Ensure the right solutions are being deployed, this can require extensive analysis, which can extend the time to remediation and limit market expansion.
• Furthermore, Open Banking payments do not suffer the same payment acceptance issues as card payments.