The retail landscape in the UK is changing. More and more UK shoppers are moving online, and this has created an opportunity for retailers with a strong online presence to win more sales. But new research from YouGov suggests that incumbent payment methods like cards, which were built for the pre-internet economy, are increasingly holding back retailers.
To find out more, TrueLayer partnered with YouGov to survey 891 online shoppers in the UK and Ireland and 350 ecommerce merchants about their attitudes to payments, security and refunds online.
Our research revealed five key insights. Download the full report here, including comments from UK online retailers like Cazoo, or get the key takeaways below.
1. The cost of payments is the top pain for merchants
With cards and digital wallets still dominating the ecommerce checkout, cost is the #1 pain point for merchants. Almost half of merchants surveyed (49%) rated the high cost of payments as one of their top two pain points with existing payment providers, and almost a third (31%) said it was their #1 pain point.
2. Merchants with high order values suffer more
Merchants with high average order value (AOV) – more than £500 – are more likely to say fraud and chargebacks are a top pain point. A quarter of these merchants said chargebacks and fraud were their top payment pain (26%) compared to 10% of merchants with low average order values.
3. Shoppers are worried about payment security
Payment security is still of utmost concern to consumers, and can stop them from buying something online. The majority of shoppers (60%) admitted that they sometimes refrain from buying something online because they’re worried about payment security.
4. Customers want speedy refunds
Instant refunds present an opportunity for retailers to win customer loyalty: 2 in 3 shoppers (67%) said the time taken to receive a refund is an important factor affecting their decision of whether or not to shop on that website again. Merchants agreed: 85% said that offering instant refunds would make customers more likely to shop with them again.
5. Merchants are planning for instant bank payment
Only 11% of shoppers currently use bank transfer as their primary payment method online, but almost two thirds (63%) said they would be comfortable paying by instant bank transfer. 3 in 4 merchants (74%) said that instant bank transfers, powered by open banking, are part of their long-term strategy.
Download the full report here, including comments from UK online retailers like Cazoo.