FreedomPay report: UK retail and hospitality firms lose £1.6bn each year due to payment system failures

A new study reveals the cost of payment system failures to UK retail and hospitality businesses, estimating losses of £1.6 billion annually.  

The research, conducted by FreedomPay and Dynatrace in partnership with Retail Economics, highlights the increasing frequency and impact of these disruptions on day to day trading, with consumers exhibiting low tolerance for delays. It also finds that one in five retail and hospitality businesses lack a secure digital backup when systems fail.

The study indicates that these failures are not isolated incidents but a recurring operational challenge that disrupts service, damages customer trust, and negatively impacts revenue. UK businesses are reporting an average of over five major outages each year, with 61% occurring during peak trading periods.

Key findings from the study include: 

• Most consumers will only tolerate up to six minutes of payment disruption before becoming frustrated, with 22 minutes being the absolute limit. The average outage, however, lasts 84 minutes.

• Businesses are overestimating the willingness to wait during payment disruptions (32 minutes vs. the actual 22 minutes) and failing to recognise the immediate customer attrition this misjudgement causes, leading to significant revenue loss and damaged brand reputation. 

• Reliance on mobile and card payments continues to rise. Less than 30% of consumers always carry cash when visiting shops, restaurants, or leisure venues. The average amount carried is £35, which is less than the average in-store spend of £47. 

• Higher income consumers, who tend to visit physical retail and hospitality venues more frequently and rely more heavily on digital payments, are disproportionately affected by payment disruptions. 

• 22% of businesses in the study have no backup payment method beyond cash, and 7% have no fallback at all. 

"Consumer facing businesses are operating in increasingly unpredictable conditions," says Chris Kronenthal, President, FreedomPay. "From extreme weather and power failures to cyber attacks and system outages, disruption is no longer the exception, it's becoming the norm. The lack of planning by businesses, coupled with the fragility of existing infrastructure, is creating a perfect storm for revenue loss and reputational damage." 

"Payment resilience isn't just an IT issue, it’s a critical business capability,” says Alois Reitbauer, Chief Technology Strategist, Dynatrace. “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. In a world where disruptions are inevitable, speed and insights are a business’s most valuable safeguards." 

"In today's hyper-competitive landscape, seamless payment experiences are non-negotiable,” says Richard Lim, CEO, Retail Economics. “Our research underscores the critical need for retailers and hospitality businesses to prioritise payment resilience. The financial impact of outages is significant, but the erosion of customer trust and brand loyalty can cause long term damage. Investing in robust, fail safe payment infrastructure isn't just about mitigating risk; it's about safeguarding future growth and maintaining a competitive edge." 

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.