Half of UK online retailers are worried about surviving the next 12 months. To increase their chances, 32% are looking to invest into their payments stack.
The findings come from a new survey completed by open banking platform Tink.
As mentioned, 50% of retailers are concerned about survival, but 41% are afraid of going bankrupt.
The report states that 66% of retailers are expecting to see more abandoned baskets, with 64% expecting them to be at the point of payment. Other concerns are lower average order values (75%) and fewer repeat customers (67%).
To navigate this time, 40% of retailers are considering cutting costs. This includes reducing staff (49%) and training (55%), cutting advertising (52%), technology and online/website investments (48%).
Free services could also disappear during this period. It found that 53% plan to halt free delivery and 54% will stop free returns.
Some of the other priorities for merchants revolve around reducing payment related costs. This includes reducing payment acceptance fees (44%), lowering costs associated with fraud (35%) and cutting refund costs (40%).
However, 32% of retailers are actually looking to spend money to upgrade their payment stack. Their goal is to reduce burdensome costs associated with their current payment methods.
Poor payment experiences are a major cause for people abandoning a purchase. Tink found that 34% of consumers say they abandon their online purchases if they have to manually enter payment details or personal information at check-out.Â
Tink head of payments and platforms Tom Pope said, â€œAs the economic situation becomes increasingly challenging, it’s important that retailers can not only manage and reduce their costs, but retain customers with services that better meet consumer needs.
â€œAgainst this backdrop of cutting costs across the board, itâ€™s encouraging to see that retailers are investing in digital payment methods that help solve these issues. Low-cost, low-fraud and zero-friction payments improve the user experience and lead to fewer abandoned baskets, while the ability to settle payments instantly will be essential for businesses who find themselves struggling with cash flow as the recession bites.â€
Another survey from Tink warned that traditional lending models are broken and â€œno longer fit for purposeâ€ in the current economic climate.
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