Checkout.com reports highlights $20 billion online payments hole

Loss of sales caused by false declines cost online retailers at least $20 billion during 2019 in the world’s biggest e-commerce markets, according to research conducted by Oxford Economics on behalf of Checkout.com.

Over 5,000 consumers and 1,500 merchants were surveyed alongside interviews with payments leadership from brands such as Microsoft, Uber, Airbnb, Deliveroo, TransferWise and Scribd.

The US was worst hit, losing $15 billion last year to false declines, followed by the UK ($2.3 billion), Germany ($1.7 billion) and France ($1.3 billion). The research showed that 65% of merchants don’t receive the data that tells them when, why and how customer payments have been declined.

31% of merchants surveyed agreed that payments issues are preventing them from entering new markets. Not offering consumers the right options is a further barrier to expansion. 56% of consumers say they would take their money elsewhere if the merchant did not offer their preferred form of payment.

Yet only 37% of the merchants surveyed currently offer a full range of alternative options, from local methods like Giropay in Germany and iDeal in the Netherlands to digital wallets like AliPay and Apple Pay.

Bradley Riss, Chief Commercial Officer at Checkout.com, which recently tripled its valuation to $5.5 billion following a $150 million Series B funding round, says: "The global economy continues to recover from the pandemic. The crisis has only accelerated the shift of commerce to digital. Now more than ever, merchants must be empowered to create better customer experiences and innovative offers that drive more business and capture more revenue.”

"Payments are a source of amazing hidden value that merchants can use to unleash growth, but they need more actionable, granular data and better control to create the right solution for their business. They need flexible, modular payments solutions that can be built their way."