Access PaySuite commissioned new research which found that 3.4% of transactions fail on average, with 55.8% of those never recovered. Nearly half of businesses report checkout abandonment, and one in five say customers have switched to competitors for a better payment experience. The average annual revenue loss stands at £159,500 per SME. Jon Reynolds, Head of Product at Access PaySuite, delves into the structural inefficiencies within modern payments and the emerging role of AI in addressing them.
For many UK SMEs, revenue leakage is no longer caused by a lack of demand or weak customer propositions. Instead, it is happening quietly, indiscernibly and often unintentionally within the payments stack.
Failed transactions, abandoned checkouts, lapsed mandates and customer churn driven by poor payment experiences are eroding topline performance frequently, without appearing on traditional management dashboards.
This challenge is not limited to commercial businesses. Julie Taylor, Head of Fundraising Operations at King’s College Hospital Charity, sees the same dynamics at play in the charity sector. Tasked with maximising donations to one of the UK’s most respected hospitals, Taylor has seen how money intended to support frontline services can be lost simply because payments are spread across multiple systems.
“One of the biggest challenges is the fragmentation of payments,” she said. “Our supporters use different online tools, each with its own processor, set-up and settlement timelines. That makes it harder to see where things are breaking down.”
Some donations succeed on one platform but fail on another and some recurring donors remain loyal for years, while others drop off unexpectedly. The issue isn’t donor intent here, but the complexity of the infrastructure sitting behind the transaction causing big problems.
A systemic problem across UK SMEs
This pattern is increasingly common across the SME landscape. Businesses tend to focus on transaction fees as the primary cost of payments, yet these are often marginal compared to the cumulative impact of failed payments, silent churn and abandoned checkouts.
Research commissioned by Access PaySuite among hundreds of UK SMEs highlights the scale of the issue. Almost half of respondents reported losing between £5,000 and £100,000 annually due to failed transactions, churn and the administrative burden of managing payment issues. Around 8% said losses exceeded £1 million per year. Crucially, 95% of SMEs surveyed are now exploring AI-based systems to identify and recover this hidden revenue.
For CXOs, these figures point to a structural issue rather than an operational edge case. Payments have become a core part of the customer experience, and when they fail, the consequences ripple across finance, operations and brand perception.
An ecosystem built for leakage
The modern payments ecosystem is inherently complex. Authorisation failures, chargebacks, refunds, abandoned checkouts and subscription churn are often tracked across multiple teams, platforms and dashboards, creating blind spots that are difficult to reconcile.
Tony Craddock, Director General of The Payments Association, describes the challenge as a series of small failures that add up over time. A modest decline rate might look insignificant in isolation, but across thousands of transactions it becomes material.
Access PaySuite research shows that, on average, 3.4% of transactions fail and more than half of those failures are never recovered. Nearly half of SMEs report checkout abandonment rates averaging 7.8%, while more than one in five say customers actively switch to competitors in search of smoother payment experiences.
Sandra Mianda, Founder and CEO of Paypr.work, argues that the problem is as much cultural as technical. “Payments have traditionally been treated as a cost centre,” she said. “KPIs focus on fees and approvals, but declines can happen for many reasons. There’s a hidden growth opportunity in understanding why payments fail and what can be done about it.”
For SMEs operating across multiple payment service providers, currencies and international markets, the challenge intensifies. Data is siloed across finance, product and customer service teams, limiting visibility and slowing response times.
The hidden cost of time
Revenue loss is only one side of the equation. Many SMEs report spending between five and 20 hours per week manually managing payment failures, reconciliation and customer follow-ups.
Chris Jones, Managing Director of PSE Consulting, notes that smaller organisations feel this burden most acutely. “Uncollected payments and fragmented reconciliation processes consume a disproportionate amount of management time. Bringing these workflows together can be genuinely transformative.”
In the charity sector, the operational impact can be even more pronounced. Taylor explained that failed donations trigger follow-ups, mandate management and indemnity claims, diverting staff away from mission-critical fundraising activity. Over time, this reduces both efficiency and morale.
Collectively, these challenges form what many industry experts now describe as the ‘hidden revenue gap’: money that should be contributing to growth or social impact but is instead lost to fragmented infrastructure and manual processes.
From reporting to real-time action with AI
Against this backdrop, Artificial Intelligence is emerging as a practical, measurable solution. David Birch, an international adviser on digital financial services, highlights AI’s ability to detect correlations and patterns that human teams are unlikely to spot. Even marginal improvements in decline rates can translate into significant financial gains at scale.
Crucially, AI’s value lies not just in automation, but in interpretation and action. As Mianda pointed out: “Data alone isn’t enough. The real advantage comes from turning insight into decisions, whether that’s retrying a transaction, routing it differently or adjusting authentication requirements in real-time, all within regulatory boundaries.”
At Access PaySuite, AI is embedded directly into reporting dashboards. Finance and operations teams can interrogate payment data using natural language queries, freeing teams from spreadsheet exports and specialist analysis, identifying failure points and enabling immediate payment management and greater business value.
For charities and subscription-based businesses, the real value lies in earlier visibility rather than hindsight. “If we can anticipate where payments are likely to fail,” Taylor said, “we can intervene earlier and protect recurring donations. That means fewer losses and more funds reaching the people who need them.”
From leakage to strategic advantage
The hidden revenue gap facing UK SMEs is neither trivial nor inevitable. Payment failures, churn and operational inefficiencies collectively cost organisations tens or hundreds of thousands of pounds each year, while absorbing valuable management time.
AI does not remove the structural quirks of legacy payment systems. What it does offer is visibility, prioritisation and the ability to act at scale.
