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This article is provided by BRC Associate Member, TLT.

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The UK retail sector is entering a once-in-a-generation payments transformation. What was formerly a back office process is now a strategic engine for customer loyalty, margin protection and competitive advantage. With technology accelerating and legislation adding more complexity retailers must confront the challenge of how to innovate at speed without increasing risk.

Payments have moved to the frontline

TLT’s Future of Payments Report, drawing on insights from the top 100 UK retailers, shows a market rapidly shifting and gearing up for significant transformation.

  • 50% of retailers say digital wallets are their top payment priority.
  • 45% are prioritising Buy Now Pay Later (BNPL).
  • 49% are already investing in agentic AI, where autonomous systems compare prices, execute purchases and make decisions on behalf of customers.

These innovations promise lower friction and increased sales — but they also introduce new questions around liability, data governance, and infrastructure readiness. Retailers want progress, but they also want clarity.

A complex landscape slowing innovation

With rising card fees, fragmented standards and inconsistent regulation, retailers are feeling the strain from multiple directions:

  • 40% say checkout friction caused by SCA/PCI slows transactions and reduces conversion.
  • Refund delays are still the most common source of customer complaints, eroding trust.
  • Only 15% have fully integrated Open Banking, while 28% have no plans at all, revealing capability gaps.
  • Despite high enthusiasm for AI, only 15% believe their contracts are ready for AI enabled payments, and 45% are uncertain about liability  enabled payments, and 45% are uncertain about liability.

The ambition–readiness gap is widening — and that is exactly where risk, cost and competitive advantage sit.

Six actions retailers must take to future proof their payment strategy

1. Unite teams around a shared payments mission

Payments now touch legal, compliance, digital, product, finance and customer teams. Yet 100 leading UK retailers still report inconsistent internal governance and unclear ownership. However, alignment isn’t optional — it’s foundational.

2. Strip out checkout friction

With 40% of retailers struggling with SCA and PCI related delays, reducing authentication steps and optimising digital wallet flows should be top priorities for boosting conversion and protecting revenue.

3. Strengthen consumer protection for new payment journeys

As agentic AI and automated payments increase, trust is a differentiator. Retailers should extend consumer protection frameworks to include AI initiated or AI assisted transactions to safeguard confidence from the outset.

4. Make contracts flexible, not fixed

Only 15% feel their contracts are future ready. PSP, vendor and acquirer agreements should include upgrade pathways, flexible pricing, AI readiness, liability frameworks and interoperability clauses for emerging payment rails.

5. Turn payments data into intelligence

Fraud trends, disputes and journey analytics are some of the most powerful datasets retailers own. When used well, they reduce cost, flag friction hotspots and support smarter commercial decision making.

6. Prepare for agentic commerce

With 49% of retailers already exploring agentic AI, retailers must move from curiosity to readiness. That means:

  • Setting governance and risk frameworks
  • Mapping AI to retailer data flows to retailer data flows
  • Monetising behavioural insights compliantly
  • Creating AI friendly checkout flows and APIs friendly checkout flows and APIs
  • Drafting liability models for autonomous purchasing

This is the moment to get ahead

“Agentic commerce is arriving quickly, and retailers who delay risk being locked out as AI agents prioritise ease, interoperability and real time value. Payments are no longer just about processing transactions – they’re about creating intelligent, seamless experiences that build trust and competitive edge and will ultimately increase sales” Perran Jervis, Head of Retail, TLT.

TLT is also offering a Payment Health Check — a diagnostic designed to assess your current capability, identify risks and highlight the fastest opportunities to strengthen resilience and performance.

Download the full report TLT’s Retail Agility Report: The Future of Payments and book your Payment Health Check.

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