According to a new research from open banking platform Yapily, businesses are potentially losing almost £656 million in missed revenue at the last mile.
The research surveyed 2,000 adults in the UK and found that 52% of them have ditched at least one online purchase in the last 12 months because of poor experience at the online checkout. This figure increased among younger generations to 70% of those between 16 to 24 years of age and 64% of 25 to 34-year-olds.
The need to manually add card details (25%), merchants not accepting the preferred mode of payment (19%), and payments being blocked due to suspected fraud (15%) were the most popular reasons that led to consumers abandoning their online purchases.
Dropped sales were mostly priced between £21 and £60 (69%) and £61 and £100 (25%). The average value of a discarded shopping basket was £30.
The findings are revealed at a time when getting consumers to spend is already difficult and profit margins for businesses are tight. Reports recently published by the Confederation of British Industry and Office for National Statistics alert organisations to expect a fall in retail sales in March following a month-on-month drop in online sales since January this year.
The research also revealed that payment troubles don’t stop at the online checkout. Overall, 77% of Brits are unhappy when it comes to making and receiving digital payments. 36% said they were the most frustrated when refunds took a long time to appear in their accounts. 20% said their major grievance was not knowing what dates payments will leave their account.
41% of Brits expects businesses to offer more convenient and easier payment methods at checkout, with 34% stating they would use a Pay by Bank app, product or service. Powered by open banking, using Pay by Bank consumers can instantly send and receive money directly from their bank account when making an online purchase. Businesses also benefit from using open banking payments and cut out costly interchange fees, reducing fraud risk, and boost conversion rates.
Founder and CEO of Yapily, Stefano Vaccino, said: “In times like these, payments are becoming a more critical and strategic focus for every business. New payment innovations like open banking are enabling businesses to realise this, transforming payments from a cost-reduction exercise into a way to increase performance and grow revenue. To stop poor payer experiences eating into their profits, businesses and payment service providers should listen to what consumers and merchants are asking for – a faster, cheaper, and more secure way to pay.”
These findings are part of Yapily’s new report ‘State of Payments: the £600 million pound problem open banking can fix’ which can be downloaded here.
