UK payments lag reality as manual processes persist despite AI push

By Puja Sharma

Automation & digital transformation overstated as manual processes remain widespread in UK payments

• New research finds 85% of UK firms still rely on fully or mostly manual reconciliation when processing transactions 
• Around 39% only see FX costs after settlement 
• Over 70% rely on a single provider to handle most payment flows 

New data from global payments infrastructure company Mangopay shows that the extent of digital transformation and automation in multi-party payments operations has been dramatically overstated. Despite significant investment in AI, businesses continue to rely on manual processes and fragmented infrastructure and have limited visibility over funds.   

The research conducted in March 2026, which solicited the views of senior finance and payments leaders in UK businesses processing at least 50 million transactions a year, reveals that automation is happening in isolated layers only.   

In the UK, 85% of firms are still relying on fully or mostly manual reconciliation. For more complex multi-party payments, only 35% use wallet or virtual account logic for fund flows, and nearly a quarter (23%) do all fund allocation manually. Cross-border payouts are one area where significant improvements have been seen, with 61% of firms saying this has been fully automated. Interestingly, businesses with fewer than 250 million transactions are more likely to be fully automated here (100%) than companies with over 500 million transactions (59%).  

Perhaps most significantly, FX visibility, which is seen as a key benefit of modern payment infrastructures, is still missing. In the UK, 39% of firms only see FX costs after settlement. This means nearly 4 in 10 businesses lack real-time visibility over one of their biggest cost drivers. The issue is even more pronounced in the US, where nearly half (47%) of firms still have this challenge.   

Compliance complexity is reinforcing the gap between promise and reality. In the UK, 40% cite country-specific payout restrictions as a major challenge, reflecting the growing complexity of operating across markets. This implies that even as technology advances, regulation continues to anchor processes in manual workflows  

The research also revealed that infrastructure remains concentrated. In the UK, 70% of platforms rely on a single provider to handle most payment flows, and only 29% use multiple providers across different steps. In Germany, this is even more concentrated, with 75% using a single provider. This suggests that most businesses are not yet operating with fully flexible payment setups, which limits their ability to optimise and control how money moves as they grow.  

Despite these challenges faced by payment operations teams, businesses are prioritising customer-facing improvements over operational ones. Around two fifths of UK firms would consider new infrastructure for better control over refund flows (43%) and support for future financial services (39%). In comparison, just 31% would consider new infrastructure to simplify compliance or enable faster settlement and more visibility into fund flows – showing that front-end capabilities are a stronger driver of change.  

Andy Wiggan, CPO, Mangopay, commented, “While automation and AI dominate industry narratives, our data shows that the underlying financial infrastructure has not kept pace. For many British firms, the reality is still defined by manual processes, limited visibility and operational complexity. And even where processes have been ‘digitised’ to an extent, they are still not always transparent or controllable.   

“These challenges are particularly pronounced for platforms managing multi-party payments. For years, many platforms focused on user growth. Now, especially at the enterprise level, the focus is more on margins and financial control as the platform economy enters a monetisation phase. As such, we believe that the next phase of transformation will be less about adopting new technology and more about rebuilding payment infrastructure to deliver control, transparency, and scalability.”