The rise of digital payments makes it easier than ever for businesses to transact and give their customers plenty of ways to pay. But what happens when payment systems fail? Whether it’s a processor issue, card machine failure or local network outage, there are too many opportunities for payments to shut down for substantial periods of time.
Here at FreedomPay, we’ve published research on the effects of payment outages in both the United States and United Kingdom. These reports highlight how vulnerable businesses are to disruptions, revealing striking similarities and key differences in how this challenge impacts two of the world’s major economies.
In this article, we’re comparing the findings, and what we found is that while the scale may differ, the fundamental problem of payment resilience is a universal concern.
The Financial Stakes
When it comes to the monetary amount affected by payment outages across retail and hospitality, the US faces a massive $44.4 billion in annual lost sales. The UK market, while smaller, still faces a significant risk of £1.6 billion annually.
Though the revenue loss differs in each country, the operational impact on retail & hospitality businesses is nearly identical. Our research shows that companies in the US and UK experience an average of five major payment outages each year. With outages occurring at a rate of almost one every other month, the threat is always looming.
Top Causes of Payment Outages
As stated above, there are many sources of payment disruption. Our research looked at each culprit:
- Bank or processor issue
- Business-wide system outage
- Card machine failure
- Network of internet outage
- Power outage
- Staff error or other technical issue
When payment systems go down, the primary reasons for disruption are the same in both the US and UK: card machine failures, which affect 23% of total at-risk revenue in the US and 25% in the UK. Network or internet outages are the next impactful cause of interruption in each country, accounting for 21% of revenue in the US and 23% in the UK.
However, by the third major point of impact, the two countries diverge. The United States sees more power outages affecting revenue, while the UK sees more bank or processor issues as a risk to revenue. While there is little anyone can do in the event of a power outage, businesses can evaluate the performance of their bank or processor to determine what next steps to take in improving their resilience.
Payment Disruption When It Matters Most
Payment systems are most likely to fail when businesses cannot afford the disruption. Our data shows a strong correlation between outages and high-volume sales periods.
- In the US, 63% of disruptions occur during the busiest times.
- In the UK, 61% of incidents happen during peak trading hours.
This pattern only amplifies the financial damage. Payment system failure in the middle of a quiet weekday is an inconvenience. A failure during the holiday rush or peak tourist season can lead to substantial revenue loss and significant customer frustration.
Customer Patience is Thin Across the Board
When faced with a delay in paying, consumer patience runs out quickly in both regions.
- In the US, businesses have a seven-minute window to resolve an issue before a rapid rise in customer frustration.
- In the UK, the threshold is even tighter, with most consumers willing to wait only six minutes before tension builds and they begin leaving.
The length of disruption is a bit lower in the UK, averaging 84 minutes. US merchants meanwhile see payment outages lasting two hours. The differences in these numbers don’t matter as much, since consumers in both countries reach their point of no return well before then.
What is the Backup Plan?
How businesses prepare for these inevitable disruptions reveals a notable difference between the two markets. US businesses appear slightly more proactive in adopting backup solutions.
- 85% of US retail and hospitality businesses have a backup payment method other than cash.
- This compares to 78% of businesses in the UK.
The gap widens when it comes to the adoption of secure offline card processing, which keeps businesses accepting payments through disruption. While 56% of US businesses have offline card processing, only 37% in the UK have implemented this gold-standard technology to maintain payment resilience.
A Universal Call for Resilience
The data we found from the US and UK tells a clear story: Payment disruption is a global problem with costly consequences. Although the total financial risk is larger in the US, the core challenges are universal. For any business in the retail and hospitality sectors, building a resilient payment ecosystem is essential for protecting revenue, maintaining customer trust, and ensuring operational stability.
Download our US report here.
Download our UK report here.