The Biggest Trends in UK Business Payments: From Real-Time Payments to the Impact of Fraud

Banking And Financial Messaging


Germaine Lang

Oct 9, 2019

The 2019 UK Business Payments Barometer is a treasure trove of information that helps make sense of the dynamic and complex business payments landscape in the UK and beyond. The 4th annual report, compiled by Bottomline Technologies, reveals that:

Mobile payments technology is perceived by 64% of financial decision-makers as having the greatest impact on payment processes in the near future
• 92% of respondents admit to making late payments to their suppliers, with inefficient AP processes cited as the main reason
• Despite high levels of awareness and precaution, the impact and scope of fraud continues to escalate, with the average loss being £240,092

Let’s dig deeper into those highlights to gain a better understanding of what’s driving them.

The Effect of Consumer Payment Methods on Business Payments

When is the last time you went a day without instant access to social media, personal email and the internet? Smartphones are here to stay, and as consumers get access to more mobile banking capability for their personal finances, financial professionals are starting to demand it from their business banking partners as well.

It’s no surprise that 64% of Barometer respondents see mobile technology as being the next big influencer on evolving business payments trends. Let’s face it; mobile payments are convenient, not tied to physical locations and faster than traditional methods. It only makes sense that the technology will be adopted and scaled for business payments – increasing efficiency and lower transaction costs.

Real-Time Payments Set to Become Industry Standard

In an effort to fix late payments and the Accounts Payables (AP) processes deemed to be at the heart of the problem, and in a move which mirrors the increased consumer demand for faster payments, over one-third of financial decision-makers say their businesses plan to adopt real-time payments within the next 12 months. In addition to the existing 53% who have already adopted the technology, this indicates 90% of those surveyed are set to implement real-time payments by the end of 2020.

“Real-time payments bring heightened visibility and efficiency to the payments landscape and will be especially impactful for small businesses looking to improve their cash flow and have their debts settled more quickly,” said Nigel Savory, Managing Director Europe, Bottomline Technologies. “Given that the technology has been in place since 2008, smaller companies have begun to expect the same payment experience they’ve become accustomed to as consumers.”

The Persistence of Fraud

External cyber fraud continues to draw the most concern, with 78% of businesses noting they are ‘fairly’ or ‘greatly’ anxious about such an attack impacting their business. The majority of financial decision-makers are nervous about being deceived into making a fraudulent payment as well as being the victim of insider fraud and collusion. As one head of finance states, “Generally, fraud comes from casual workers in our restaurants. It is never blatant fraud – it tends to be well thought out.”

Moreover, once fraudsters strike, the unfortunate consequence is that 87% of businesses across Great Britain are unable to recover more than half of their losses, with the figure rising to 93% among small and medium businesses specifically. The average financial loss through fraud currently sits at £240,092, with the majority of fraud losses having increased from within the £10,000-£49,000 bracket in 2018 to between £50,000 and £250,000 this year.

Additionally, the report touches on other hot topics such as Brexit, anti-money laundering and the responsibility of sanctions screening.

Heightened Concern over International Volatility and Brexit

With the UK’s exit from Europe still not resolved, it makes sense that survey respondents ranked ‘changes in the trading environment’ as the second greatest influence on payment processes over the next 12 months.

In the context of Brexit, the Barometer suggests that those who have previously outsourced services to continental Europe are renewing their contracts on a more short-term basis, pursuing a ‘wait-and-see’ strategy. Research respondents also cite concern about finding the same value for money and experience in the UK for business services such as underwriting. Two-thirds of financial decision-makers surveyed also indicated they are fairly or very concerned over establishing new, creditworthy trading partnerships, as well as the transparency of cross-border payments fees, and FX, tax and tariff changes.

Outsourcing Responsibility over Sanctions

With an increase in global sanctions and heightened tensions, many respondents stated that they wanted to be more involved in the process, giving them more insight. In fact, 84% would like to know if a sanctioned organisation is likely to be the recipient of their payment, and 81% would like to be able to track all payments to their destination. However, despite wanting more visibility, 70% of respondents believe that sanctions screening is the responsibility of banks rather than themselves. Whether this model is sustainable is questionable. That said, it is in the corporates’ best interest to take more accountability for the sanctions-checking of their payments, especially when adopting real-time payments, as there is no way to recall the payment once it is released.

The New Normal

Uncertainty and volatility will likely continue to define 2019, with concerns over international payments, cyber fraud and regulation looming large.  However, this offers companies, both large and small, the opportunity to embrace these changes and reap the rewards of early adoption.

“Regulations such as Open Banking have huge potential to radically alter the payments landscape,” highlights Savory. “We are beginning to see small companies hold consumer-like expectations when it comes to the seamless experience of real-time payments.”  He goes on to say that, quite naturally and acceptably, businesses are cautious of volatility, but with a careful approach, they can use this changing landscape to their advantage.

The report concludes that a combination of payments digitisation and open banking will bring unprecedented speed and visibility to business payments. It’s a call to action for those companies that are slow to abandon their analogue payment practices to embrace the change – it’s clear that this train will not slow down.

For more thoughts about the future of UK business payments, including further insight into priorities over the next 12 months, view the full “2019 UK Business Payments Barometer” or listen to the podcast episode here.

For further insights into the payments industry and beyond, subscribe now and stay up-to-date on the latest tips, trends, and topics.


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Germaine Lang

Germaine Lang is the Managing Editor of SmartPayments with a strong creative and technical writing background across many industries. She also works to engage customers and relate their experiences with vendor products and services, positioning them as innovative thought leaders.
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