How Pay by Bank can help struggling merchants as recession looms
Tink’s latest survey shows that UK online merchants are battling increased churn and cart abandonment during the current cost of living crisis – and are expecting things to get even worse in 2023. To stay afloat, retailers are considering cutting costs across the board, and are seeking a low-cost payment method that can reduce friction and fraud.
Tink’s latest research shows that half of UK online retailers are worried about surviving the next 12 months, as recession looms.
Retailers are reducing staff and cutting costs across the board to stay afloat.
But investing in low-cost, low-fraud and frictionless payment methods are seen as essential to keep customers.
Tink’s Pay by Bank is a solution that benefits retailers and consumers alike.
Both merchants and consumers are feeling the pinch caused by the current macroeconomic situation, and UK retailers are bracing for an even more difficult year ahead. In a recent Tink survey of UK online retailers, half (50%) said they are worried about how their business will survive the next 12 months, with four in ten (41%) afraid of going bankrupt.
In these times of struggle, online retailers are looking for payment solutions that can help them reduce costs while meeting consumer demand for a fast and convenient check-out experience.
Adapting to the credit crunch
As consumers are increasingly focusing on need-to-haves rather than nice-to-haves, two thirds (66%) of retailers are seeing or expecting to see more abandoned baskets – particularly at the point of payment (64%). Lower average order values (75%) and fewer repeat customers (67%) are also either expected or already being observed.
To adapt and survive, four in ten (40%) retailers have already or are considering cutting costs across the board – including reducing staff (49%) and spending less on advertisement or technology investments (48%). Over half of merchants are also stopping or considering stopping services that customers have come to expect for free such as free delivery (53%) and free returns (54%).
Reducing costs related to payments is also top priority for merchants, including reducing payment acceptance fees (44%), cutting refund costs (40%) and lowering costs associated with fraud (35%).
The payments paradox
Despite the economic pressure, one in three (32%) retailers are actually investing more in upgrading their payment stack to reduce costs linked to their current payment methods.
Even during a recession, online retailers recognise that investment in innovative payment solutions is necessary to help them meet customer demand for quick, painless payments while reducing costs.
This is more important than ever now that there has been a significant squeeze on consumer spending power. A new consumer survey conducted by Tink shows that as it is now, one in three (34%) consumers say they abandon their online purchases if they have to manually enter payment details or personal information at check-out – with third-party authentication websites a major point of frustration (46%).
Safety is also a top consumer concern, as nearly half (43%) of the respondents worry about online payment fraud. Naturally, consumers are also concerned about falling into debt in these turbulent times – for this reason, 47% are reluctant to use buy now, pay later.
How Pay by Bank can help struggling merchants win back customers
To meet customer demand while saving costs, online retailers need to implement payment solutions that are convenient, secure and without friction. Pay by Bank, a payment method powered by open banking, offers a clear solution for both merchants and consumers.
For merchants. Pay by Bank provides convenient, near-instant settlement while reducing both costs and fraud.
For consumers. Pay by Bank offers consumers a quick, secure and frictionless payment experience – removing the need for manual input.
Want to learn more about how Pay by Bank can help you meet customer expectations while boosting revenue? Get in touch.
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