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74% Of Merchants Plan on Adopting Open Banking To Improve Shopper’s Experience Find TrueLayer

New research from TrueLayer, a European open banking platform, and YouGov, ‘Change at the checkout – eCommerce payments after the pandemic’, has revealed the consumer and merchant trends that are shaping the future of the UK eCommerce checkout.

With brick and mortar shops shut for months and consumers forced to shift shopping habits online, eCommerce sales saw the equivalent of five years of growth in just 12 months last year in the UK alone. To meet demand, retailers must continue to optimise their online presence to attract and retain customers, with the checkout experience now becoming a core focus.

The study found that online shopper behaviour is being influenced by the availability of payment options. Having access to different online payment methods was cited by 48% of consumers as a driver for choosing a particular retailer.

Credit and debit cards still dominate at 50%, rising to 63% for purchases over £200, while digital wallets – such as Google Pay, PayPal and Apple Pay – are also popular, with 38% using them as the primary payment method.

“Debit and credit cards are falling short because they weren’t designed for digital commerce at scale. Traditional bank transfers are also flawed, taking shoppers away from the checkout and forcing them to manually copy over transaction details,” commented Ossama Soliman, Chief Product Officer at TrueLayer. “The result is poor shopper experience, low conversion and billions in potential revenue lost.”

However, the continued dominance of cards is acting as a catalyst for the next evolution of the checkout journey. Specifically, the research revealed:

  • Card payment costs are merchants’ biggest pain: processing fees, fraud and chargebacks associated with card payments are hurting merchants. Almost half of the merchants surveyed (49%) rated the high cost of payments in their top two pain points with existing payment providers.
    • Almost a third (31%) said it was their biggest pain point. Meanwhile, 36% of merchants rated high fraud and chargebacks in their top two pain points, while one in five merchants (20%) said it was the #1 pain point.
    • Merchants with a high average order value report the highest overall chargeback costs. 38% of merchants with an average order value greater than £500 report costs of £100-500k a year on chargebacks, while 11% reported costs in excess of £500k.
  • Open banking payments are the future of the checkout: 74% of merchants are planning to offer instant bank payments, via open banking, as part of their long-term strategy. This corresponds to consumer attitudes, with almost two-thirds (63%) of shoppers would be comfortable paying by open banking, particularly for vehicles, car rentals, flight tickets and sporting equipment. The research revealed that shoppers aged 24-34 are most comfortable paying by instant bank transfer (77%), followed by those aged 35-44 (74%).
  • Security is the shopper’s biggest concern: 60% of shoppers said they have abandoned an online basket because they were worried about a lack of payment security. The challenge for retailers is to strike a balance between authentication and seamlessness, and this comes with offering consumers methods that they’re comfortable with. There’s also a generational difference with shoppers under 45 preferring to authenticate via biometrics, while shoppers over 45 prefer one-time passcodes / SMS.
  • Refunds are a loyalty opportunity for merchants: 67% of shoppers – rising to 88% for purchases of between £500 and £1,000 – said the time taken to receive a refund is an important factor affecting their decision of whether or not to shop on that website again. 81% of shoppers expect a refund from an online purchase within a week or less.

Merchants agreed: 85% said that offering instant refunds would make customers more likely to shop with them again. However, they are struggling to meet expectations, with 32% receiving frequent complaints about slow or lost refunds.

“The opportunity – and need – to create the ultimate online payment experience is huge. But it clashes with the reality of incumbent payment methods, with merchants facing the challenge of mounting costs from transaction fees and chargebacks,” Soliman explained. “That is why so many are examining instant bank transfers via open banking to deliver digitally-native payments with conversion rates up to 40% higher than cards at a cost that is much lower than cards.

“That combined with the ability to instantly process refunds and payouts, offers an opportunity to merchants to differentiate themselves through an improved end-to-end payment experience. And shoppers are ready to embrace it, having become comfortable with instant transfers in their everyday financial lives. We are undoubtedly entering the next phase of evolution at eCommerce checkout that is a win for merchants and shoppers.”

TrueLayer and YouGov surveyed 891 consumers in the UK and Ireland who shop online at least once a month. They also surveyed 350 merchants that sell products online. Respondents were director or C-level executives in payments, product or finance roles.


  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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