Yapily research: UK businesses want fairer payments as chargeback and fee frustrations hit hard

Businesses are demanding more cost-effective and secure payment methods that do away with the “unfair” chargeback model, according to a new report by Open Banking infrastructure provider, Yapily.

The research, carried out by YouGov and which surveyed more than 2,000 UK consumers and 250 merchants, shows that 77% of merchants say transaction fees are a big concern when choosing a new payment method. 68% feel the risk of fraud is a significant consideration, while 54% flag the risk of data breaches as a key concern.

Two-fifths of businesses believe the current chargeback process is too skewed in favour of consumers. 49% wish the process were more efficient, and 41% want it scrapped entirely. 

Shoppers surveyed say their biggest concerns centre on convenience and security, with the majority calling for safer, simpler ways to pay – especially for everyday, low value purchases.  

In addition to chargeback concerns, the merchant data shows cost and security are deal breakers. Almost all of those surveyed (98%) cited low fees as being an important factor when choosing a new payment method, followed closely by how secure it is. 

This correlates with 40% stating they’d be open to offering Open Banking, which comes with low fees and high security as standard – further highlighting their dissatisfaction with the current selection of payment methods on offer, like debit and credit cards.

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Questioning consumers on what they care about, the survey reveals that for low-cost purchases under £20 from trusted brands, 49% of shoppers prioritise ease of use ahead of security or protection. By the £100 mark, though, security jumps ahead, cited as the top concern for 44% of shoppers when buying from known brands, and 51% when buying from unfamiliar ones. 

58% say a lower risk of fraud would encourage them to try a new payment method, yet cards continue to be the preferred payment method despite open banking’s significantly lower fraud rate.

Stefano Vaccino, Founder and CEO at Yapily, says:  "Open Banking has the potential to enrich people's payment experiences beyond other payment methods. We've seen steady adoption so far, but the real challenge is achieving faster growth so that Open Banking delivers on its full potential.”

“This report shows what needs to be done at an industry-wide level, and we’ve proposed a clear path to achieving that. We're inviting everyone in the open banking and payments ecosystem to work together and develop a model that's widely used, builds trust, and makes payments safer and better for everyone.

Nicole Green, VP Product strategy, Innovation and Policy at Yapily, says: "Businesses are telling us they need lower costs and better security - which is what open banking offers. Now the challenge is finding the tipping point that drives behavioural change among consumers, encouraging them to make the switch at the checkout.”

“Rolling out new features like cVRP faster and creating a clear, trusted brand complete with an industry trustmark for open banking payments will encourage adoption. But first agreeing on a consumer protection model that works for both consumers and merchants is a priority for Open Banking. Rather than copying old, flawed models - such as chargebacks - we need to find a model that helps merchants to thrive and consumers to trust this new payment option.”

2025 RTIH INNOVATION AWARDS

Payments will be a key focus area at the 2025 RTIH Innovation Awards.

The awards, which are now open for entries, celebrate global tech innovation in a fast moving omnichannel world.

Our 2024 hall of fame entrants were revealed during an event which took place at RIBA’s 66 Portland Place HQ in Central London on 21st November, and consisted of a drinks reception, three course meal, and awards ceremony presided over by comedian Lucy Porter.

In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “The event is now into its sixth year and what a journey it has been. The awards started life as an online only affair during the Covid outbreak, before launching as a small scale in real life event and growing year on year to the point where we’re now selling out this fine, historic venue.”

He added: “Congratulations to all of our finalists. Many submissions did not make it through to the final stage, and getting to this point is no mean feat. Checkout-free stores, automated supply chains, immersive experiences, on-demand delivery, next generation loyalty offerings, inclusive retail, green technology. We’ve got all the cool stuff covered this evening.”

“But just importantly we’ve got lots of great examples of companies taking innovative tech and making it usable in everyday operations - resulting in more efficiency and profitability in all areas.”

Congratulations to our 2024 winners, and a big thank you to our sponsors, judging panel, the legend that is Lucy Porter, and all those who attended November's gathering. 

For further information on the 2025 RTIH Innovation Awards, please fill in the below form and we will get back to you asap.