Payment system failures could be costing UK retail and hospitality businesses an estimated £1.6billion each year, according to new research from FreedomPay and Dynatrace.

The research, which was conducted in partnership with Retail Economics, revealed that UK businesses report an average of over five major payment outages each year. And, with 61% of these payment systems failures taking place during peak trading periods, retailers don’t just stand to lose out on sales, they also risk eroding consumer trust and damaging customer experience.

Payment experiences are non-negotiable for customers

“In today’s hyper-competitive landscape, seamless payment experiences are non-negotiable,” Richard Lim, CEO, Retail Economics, commented.

The study found that most consumers will only tolerate up to 6 minutes of payment disruption before becoming frustrated. However, the average outage was found to last 84 minutes, testing consumers’ patience and risking purchase abandonment.

“Businesses are operating in increasingly unpredictable conditions,” Chris Kronenthal, President at FreedomPay, said. “From extreme weather and power failures to cyber attacks, disruption is no longer the exception, it’s becoming the norm.”

Every minute matters

Payments downtime is costly – and every minute matters. If a payment system goes down between minutes 7 and 11, businesses risk losing an average of £73million in sales every minute. By minute 22, total losses could reach £1.17billion, according to the report.

Yet, one in in five (22%) of retail and hospitality businesses lack a secure digital backup when systems fail, exacerbating the potential for lost revenue.

Consequences beyond broken transactions

“Payment resilience isn’t just an IT issue, it’s a critical business capability”, Alois Reitbauer, Chief Technology Strategist at Dynatrace, added. “Outages don’t just stop transactions; they break the customer journey and disrupt essential services. To stay resilient, businesses need real-time visibility, the agility to adapt in real time, and technologies that auto prevent and auto remediate disruptions.”

“The financial impact of outages is significant, but the erosion of customer trust and brand loyalty can cause long term damage,” said Lim. “Investing in robust, fail-safe payment infrastructure isn’t just about mitigating risk; it’s about safeguarding future growth.”