Making payments a profit centre in UK retail
This article is provided by BRC Associate Member, Ecommpay.
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Retailers today face rising customer expectations, operational complexity, and an increasingly competitive e-commerce landscape. One of the most powerful levers for growth is the payments function – often overlooked.
Payments is no longer simply a cost to manage. It can drive revenue, improve conversion, reduce friction, and enhance customer loyalty – if treated as a strategic part of the business.
“Nearly eight in ten customers will switch merchants after a poor payment experience.”
A changing retail environment
UK e-commerce continues to grow strongly, with cross-border trade rising faster than domestic sales. This brings more payment methods, currencies, and regulatory complexity.
Consumers now expect payments to be as fast and seamless as streaming services. Emerging trends, such as AI-assisted shopping, will further transform retail. By the mid-2030s, AI agents could execute up to one in five online purchases – creating new opportunities and operational challenges.
Retailers who treat payments as a back-office function risk lost revenue, frustrated customers, and missed growth opportunities.
Payments as a driver of performance
Leading retailers place payments at the core of the business, not Finance or IT. They build specialist teams to handle revenue protection, routing, chargebacks, and partner management.
Active executive sponsorship elevates payments from a cost centre to a profit lever. Engagement from CFOs, COOs, and CPOs ensures faster adoption of innovations, appropriate resourcing, and clear demonstration of commercial value.
Optimising authentication, retries, routing, and fraud controls delivers measurable revenue recovery and often exceeds returns from marketing spend.
Case example: Blink Pet Foods recovered lost revenue and achieved greater ROI by monitoring failed payments and implementing optimised routing.
Where value is being created
Retailers report tangible benefits across three areas:
- Friction reduction and revenue recovery: Streamlined checkout, express options, and better issuer relationships lift authorisation rates. Recovering failed payments often outperforms acquiring new customers.
- Cost optimisation and operational efficiency: Renegotiating acquirer contracts, automating disputes, and strategically routing transactions reduces fees. Transaction routing alone can cut debit card costs by over 25%.
- Fraud management and smarter decision-making: Reducing false positives protects revenue. Early AI and LLM use in fraud detection has cut identification times by up to 60% while allowing more legitimate transactions to succeed.
Case example: Spotify works with external partners to optimise routing, fraud, and currency conversion – driving measurable improvement in transaction success and cost reduction.
Practical steps for retailers
- To convert payments into a profit centre, retail leaders should:
- Elevate payments into a cross-functional strategic discipline with executive backing.
- Consolidate performance reporting across channels, markets, and B2B flows.
- Identify quick wins that demonstrate value and credibility.
- Partner externally for expertise, cost reduction, and faster implementation.
- Align offerings with customer preferences, using local and preferred payment methods to increase conversion and basket value.
Reframing the value of payments
Payments is no longer purely operational. When structured strategically, it can improve customer experience, recover lost revenue, optimise costs, and strengthen competitive advantage.
“Retailers who act now will enhance margins, drive loyalty, and secure their future in a rapidly changing marketplace.”
Payments can be a powerful profit lever. Those who take action now will position themselves ahead of competitors and maximise the opportunities of the evolving retail landscape.
Ready to dive deeper?
Download Ecommpay’s full white paper to explore the data, case studies, and practical frameworks that help retailers turn payments into a profit centre.
