Payment failures put GBP £1.7bn in UK sales at risk

FreedomPay has published research, conducted with Retail Economics, estimating that payment system failures put up to £1.7 billion in annual UK retail and hospitality sales at risk.

Based on surveys of 2,000 UK consumers and 200 retail and hospitality managers, the findings point to repeated disruption across the sector. Businesses reported an average of 5.2 major payment outages a year, with 72% occurring during peak trading periods.

Retail accounted for the largest share of the revenue exposure at £1.2 billion, while hospitality and leisure represented a further £494 million. The average outage lasted 79 minutes, far longer than most customers are willing to wait at the till.

Consumer patience emerged as a central issue. Most consumers can tolerate payment delays of up to seven minutes before frustration begins, while 13 minutes is the maximum wait before customers start abandoning purchases. Nearly one in five shoppers, 19%, said they had walked away from an intended purchase during a payment failure.

The figures suggest losses build quickly once disruption begins. Restoring systems within the first five minutes can prevent more than 90% of potential losses, while between the eighth and thirteenth minute of an outage, industry losses can exceed £50 million per minute as abandoned transactions rise.

Staff pressure

The report also highlighted the effect on frontline workers. More than half of retail and hospitality managers, 52%, said they had faced verbal abuse or confrontational behaviour from customers during payment failures.

That pressure is compounded by limited backup options. Only 40% of companies surveyed offer offline card processing, and fewer than half have alternative network solutions in place. This leaves staff with few ways to complete transactions or defuse tense situations when systems go down.

Cash, once a common fallback, appears to be losing ground as a practical safeguard. Fewer consumers now carry cash than a year ago, making digital disruption harder to manage when card systems fail. Some 72% cited the risk of being unable to pay as their main concern during an outage.

A generational divide was also visible in payment habits. Only 18% of under-45s said they always carry cash when visiting shops and venues, compared with 33% of over-45s. This suggests younger consumers are less prepared when digital payments stop working and more likely to react negatively.

The research also pointed to reputational risks for operators, particularly because younger consumers are more likely to share poor experiences online. A local payment outage can therefore become more than an immediate lost sale and develop into a broader customer service problem.

Resilience gaps

The findings raise broader questions about the resilience of UK payment infrastructure as retailers and hospitality operators become more dependent on digital transactions. Many businesses recognise the threat of disruption but underestimate how quickly revenue is put at risk once systems fail.

Chris Kronenthal, President of FreedomPay, said the issue extends beyond missed transactions. “The UK’s relationship with payment resilience is unique in that businesses are beginning to truly understand. Our research confirms that retailers and hospitality operators across the country are worried about more than just lost sales, it’s the lost trust that remains their biggest focus. As it should be in a market that is increasingly impacted by reputation. Payment failures are key confirmations of credibility, over and above being an operational mistake. Investing in resilience is the best defence to keep that customer loyalty.”

Retail Economics linked the findings to a wider shift away from cash and towards always-on digital payments. That trend, combined with limited fallback arrangements in stores and venues, increases the commercial impact of even short-lived outages.

Richard Lim, Chief Executive Officer of Retail Economics, said: “When payment systems fail, the impact is immediate and unforgiving. The data shows that customer tolerance is measured in minutes, not hours, with abandonment accelerating quickly once delays extend beyond that point. But the impact goes beyond the lost transaction, placing pressure on frontline staff and eroding customer trust. As digital dependency increases and fallback options become more limited, resilience is becoming a core capability, not just an operational safeguard.”