By: Jon Reynolds, Head of Product at Access PaySuite

For many UK finance leaders, payments are seen as a back-office function. If transaction fees are under control, approval rates look reasonable and reconciliation balances at month-end, attention moves elsewhere.

But there is a deeper issue at play. Unbeknownst to many, revenue is leaking from businesses through frictions like failed transactions, abandoned checkouts, and other types of payment-related churn. The losses, though not always obvious, are scattered across platforms, providers, and any number of internal teams, which means that the total impact is rarely measured in one place. And it’s hard to solve a problem you can’t quantify.

It doesn’t matter whether we are talking about charities, retailers, subscription companies, or service providers, the pattern is the same. Individually, each failed payment may appear insignificant, but taken together, they start to be a meaningful drag on growth.

Fragmented payments, fragmented visibility

Julie Taylor, Head of Fundraising Operations and Improvement at King’s College Hospital Charity, tells the story of a challenge that will sound familiar even beyond the charity sector.

“I think that one of the biggest challenges is the spread of payments across multiple platforms,” she says. “People choose to pay donations using a variety of online tools, and for each one, there is a different setup process, a different payment processing partner, and a different date that the money is available to us.”

That fragmentation creates friction and obscures insight that is available to the internal decision makers. Taylor has found herself questioning why a payment that fails on one platform might succeed on another, why some donors abandon transactions, and why some regular contributors churn quickly while others remain for years.

The same dynamic is true for many SMEs. Multiple payment service providers, cross-border sales, and legacy finance systems mean data is siloed. While the finance team might see settlement reports, it is the customer service team that handles retries, and the product team that is tracking conversion rates. Rarely does a single team see the full payment lifecycle all the way from intent to settlement.

Chris Jones, Managing Director of PSE Consulting, said, “If you ask small businesses what causes them pain, it is those uncollected payments and the three to four days a month that they typically spend doing reconciliation.”

That time tends to be absorbed into overhead, even though it reflects lost revenue and inefficiency.

A series of small failures

Tony Craddock, Director General of The Payments Association, says that it is typically “a whole series of typically quite small failures”. A modest checkout abandonment rate can be dismissed as normal, while a handful of chargebacks may be written off as routine. But, Craddock notes, “because all of these small little pieces are in different functions within the company, the size of the overall problem is often unknown. It’s almost like a hidden loss of revenue.”

Research commissioned by Access PaySuite, surveying hundreds of UK SME finance and management professionals, shows that nearly half of respondents estimate annual losses between £5,000 and £100,000 due to failed transactions, payment-related churn, and the associated administrative costs. Around 8% believe they lose £1 million or more.

On average, 3.4% of transactions fail, and 55.8% of those are never recovered. Nearly half of businesses report checkout abandonment, with an average rate of 7.8%. More than one in five say customers have switched to competitors offering a better payment experience.

Sandra Mianda, Founder and CEO of Paypr.work, argues that the blind spot is cultural as much as it is technical. “Traditionally, payments have been seen as a cost centre,” she says. “The KPIs tracked are fees and approvals. But somewhere between intent and settlement, declines can have many different reasons that account for a lot more than what the data shows. There’s a real hidden opportunity in those failed transactions.”

The time tax on growth

The revenue ‘gap’, if you will, is compounded by the time required to manage payment exceptions. More than 70% of the organisations that Access PaySuite surveyed say they spend between five and 20 hours per week handling payment failures and related administration. Fewer than four in ten report having full visibility into the broader revenue impact.

Chris Jones from PSE Consulting believes that the friction is spread across the payments value chain. For example, an issuer may decline a transaction without providing detailed context as to why they have done so. Further along, acquirers and schemes apply their own risk assessments, which ultimately means that businesses are left to manage refunds, disputes, and chargebacks across multiple systems.

“If you can move them into a single user experience and allow those exceptions to be handled in a much shorter activity focused on edge cases, that’s transformative,” Jones says.

Julie Taylor of King’s College Hospital Charity sees the same pattern in fundraising. Failed donations require follow-up calls, but “the technology is geared towards bringing payments in, rather than actually focusing on those failures,” she says.

While the financial loss can be calculated, the diversion of attention from core objectives is harder to measure, but equally significant.

Adding an intelligence layer

Against this backdrop, 95% of SMEs surveyed believe AI systems could help close the revenue gap.

David Birch, an adviser on digital financial services, argues that the promise of AI lies in pattern recognition. “It will find patterns. It will uncover connections. It will spot trends that you wouldn’t necessarily see yourself,” he says. Even incremental change can matter. “You only need to take decline rates down by a small amount to add a lot.”

Sandra Mianda of Paypr.work, however, cautions that AI must go beyond automation. “The data is one thing,” she says. “But being able to interpret what that story tells you in your environment and process that in a way that drives intelligent decisions, that’s the next step.”

From background function to strategic lever

The hidden revenue gap facing UK SMEs is far more significant than it may seem, but it doesn’t have to be this way. Frictions like failed transactions, abandoned checkouts, and payment-driven churn cost tens of thousands of pounds per firm each year. In some cases, millions. The administrative burden compounds the damage.

AI does not eliminate the complexity of modern payments, but it can provide a way to tease out the non-obvious patterns, attach a number to the cumulative impact, and help to automate recovery of any lost funds at scale.

Finance leaders should no longer be trying to figure out whether there in leakage in their payments processes. The evidence suggests that there is. The real question now is whether they have the visibility to see it clearly and the tools to act on it decisively.

For their part, platforms are beginning to respond by embedding AI directly into payment infrastructure. Access PaySuite, for example, has introduced AI within our platform in order, we hope, to help finance teams interrogate data and understand why transactions fail, so that they can ultimately manage their payments better. 

The goal, of course, is to help businesses find where revenue is being lost and how to recover it, so that they can close that pesky hidden revenue gap.