Disruption in the UK payments landscape means companies must strategise to overcome new challenges and create new opportunities. New research by Barclaycard Payments and FT Longitude shows efficiency and cost-cutting are currently the top influences on businesses’ investments in new payments technology — fifty-three per cent of the senior UK business leaders that took part in the research say this is a principal factor for them.
Their desire to cut costs is understandable in today’s challenging operating environment, as they juggle business and strategic priorities. But to future-proof their business and maintain customer loyalty, leaders also need to make sure they can respond to their partners’ and customers’ changing expectations.
A smoother payments experience for employees and partners
Barclaycard Payments’ research shows that enabling their employees to use corporate credit cards is the payment solution that business leaders are most likely to invest in during the next few years.
David Gammie, CFO at drinks subscription service Beer52 explains that, as well as making it easier to pay, corporate credit cards can bring other business benefits. “We use a corporate credit card because it is very easy and straightforward, and we’ve got full traceability,” he says.
Business leaders’ second most popular technology investment is instant or faster payments. Like corporate credit cards, this can benefit employees in terms of efficiency. But this technology also plays an important role in business relationships.
What we are doing is breaking down the walls between the physical world and the digital world in order to enable the same customer experience regardless of where you are.
“For our business, the turnaround from finding out we need to make a payment to making a payment can be really important,” says Harry Bembridge, director of tax and treasury at global recruitment firm Tenth Revolution Group. “We get situations, for example, where a contractor has filled in their time sheet and the client failed to approve it by the cut-off date, but we want to maintain the relationship with the contractor so we rush out the payment. The ability to fix a problem like that on the day, pretty much in 10 minutes, is really helpful.”
Physical and digital coexist — for now
When it comes to how their customers pay, the surveyed business leaders expect physical card payments to be the most popular payment method in the next two years, followed by contactless.
But business leaders’ expectations of their customers’ preferences vary depending on their industry. For those in retail, for instance, online payments come second only to contactless. Only 36 per cent of retail leaders put physical card payments in their top three methods, compared to 64 per cent of leaders in hospitality and leisure.
Iñigo Perez, global head of digital strategy and transformation at Vodafone Group, says that a completely digital approach to payments is helping the business to create a consistent omnichannel customer experience. “We are transforming our channels, especially our stores, to be able to manage the customer not only without cash but also without paper,” he says. “What we are doing is breaking down the walls between the physical world and the digital world in order to enable the same customer experience regardless of where you are.”
Disruption in payments does not appear to be diminishing: digital wallet payments, for instance, are surging in popularity. Transaction data from Barclays shows that in 2022 mobile contactless transactions above £100 increased by 109 per cent. They accounted for 4.1 per cent of all contactless transactions by value. The average contactless user made 220 ‘touch and go’ payments in 2022, up from 180 in 2021.1
Customers’ flexibility should be reflected in the payments experience
Business leaders should be careful not to overlook the customer experience when they plan their future payments strategy — especially as needs and expectations continue to shift.
“UK consumers are clearly open-minded about new payment methods and want to make the most of new technology, so business leaders should be too,” says Linda Weston, Managing Director and Head of Core Product at Barclaycard Payments. “Access to accurate and coherent payments data allows them to gain a deeper understanding of their customers and the market, ensuring they make informed decisions about when and how to invest in technology.”
About the research
In December 2022 and January 2023, FT Longitude and Barclaycard Payments surveyed 500 senior UK business leaders (C-suite and C-1 level) at organisations with an annual turnover of at least £10mn. The research sought to understand leaders’ strategies, aims and ambitions in the payments space.
from Barclaycard Payments
