By Martin Bradbury, Regional VP, UK&I, at Dynatrace.
The ongoing wave of outages impacting UK household retailers and banks is a stark reminder that payment outages are not rare occurrences. The cost for businesses is equally shocking. Research from Dynatrace and FreedomPay shows that retailers are risking £1.6bn in revenue every year due to outages.
However, businesses stand to lose more than revenue. Payment outages diminish consumer confidence and endanger the long-term reputation of companies. As it stands, one in three customers lose trust in a business after a single payment failure.
Reactive approaches, alone, to payment outages will fail to protect finances. Instead, businesses need a robust solution that enables them to detect, isolate, and mitigate issues before they cause a damaging payment outage.
Digital Dependency
Digitalisation across the retail and hospitality sectors necessitates rapid payments and seamless customer experiences in store and online. However, this digitalisation requires increasingly complex tech stacks to keep payments running smoothly. Given these systems are chained together, even a small problem like a failed update can ripple through the chain and interfere with payment systems. As a result, outages have become unavoidable with UK businesses facing more than 5 major outages every year on average.
Customer Expectations
The imperative to invest in a solution to outages that shifts businesses away from a reactive approach, and towards a proactive one, is also the result of higher customer expectations. Customers expect seamless service, but businesses are still overestimating how long customers will hang around once an outage has stuck.
Research from Dynatrace shows that it takes only 6 minutes for frustration to kick in, whereas businesses estimate customers will remain patient for twice as long. What’s more, by the 12-minute mark, customers are increasingly likely to abandon their purchase altogether.
The increasing complexity of IT tech stacks is making it harder for IT teams to anticipate, isolate, and mitigate outages, which are jeopardising revenue and reputation.
The Shortcomings of Current Approaches
Current approaches to payment resilience are less than comprehensive. In the first instance, 7% of businesses have no backup in place for when a payment outage strikes, leaving customers in the lurch. What’s more, the most common backup is cash, but only 1 in 3 consumers consistently carry cash today.
While almost half (48%) of businesses have invested in secondary internet connections to keep payment systems up and running, and 43% have sought out mobile-based backups including QR code payments and in-app purchasing, these fragmented approaches lack cohesion. As a result, many organisations are left exposed to prolonged outages.
A Better Solution
A more comprehensive and proactive solution to the ever-present risk of outages is using AI-powered observability. In simple terms, integrating observability within a business ensures eyes on the many parts of its complex tech stack. Using AI to analyse data from across payment ecosystems, businesses are alerted to anomalies, bottlenecks, and signs of potential failures. This empowers businesses to act before the system crashes, safeguarding against any weak points and crucially keeping payments online to protect revenue and consumer trust.
In addition, in the instance of a payment outage, AI powered observability can pinpoint the source of failure faster than a manual investigation. This is a gamechanger when it comes to protecting revenue, as payment outages restored within 10 minutes avoid 80% of the financial fallout that would have otherwise occurred.
Payment resilience is not a technical add-on: it is a core driver of long-term revenue protection and brand trust. Customer demands and the requisite IT tech stacks are only going to continue to rise in expectation and complexity. However, businesses that invest in robust IT infrastructure can ensure that payments remain stable even as complexity increases.
