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UK retail and hospitality businesses are facing mounting losses from payment system outages, with a new study estimating annual costs at £1.6 billion. The research, conducted by FreedomPay, Dynatrace and Retail Economics, highlights that these outages are not isolated events but recurring issues, with businesses experiencing an average of more than five major outages each year. Notably, 61 per cent of these incidents occur during peak trading periods, compounding their financial impact.
“Consumer-facing businesses are operating in increasingly unpredictable conditions,” said Chris Kronenthal, President, FreedomPay. “From extreme weather and power failures to cyber-attacks and system outages, disruption is no longer the exception, it’s becoming the norm. The lack of planning by businesses, coupled with the fragility of existing infrastructure, is creating a perfect storm for revenue loss and reputational damage.”
The study found that most consumers will tolerate only up to six minutes of payment disruption before becoming frustrated, with 22 minutes being the absolute limit. However, the average outage lasts 84 minutes—far exceeding consumer patience. By the 22nd minute of an outage, total losses could reach £1.17 billion, or 74 per cent of all revenue at risk. Businesses, however, overestimate consumer tolerance, believing they have 32 minutes before customers lose patience, leading to significant blind spots in risk management.
This disconnect between business perceptions and consumer reality results in lost sales and reputational damage, as frustrated customers abandon transactions. The study also revealed that 22 per cent of businesses have no backup payment method beyond cash, and 7 per cent have no fallback at all. With fewer than 30 per cent of consumers regularly carrying cash—and the average amount carried (£35) falling short of the typical in-store spend (£47)—businesses without digital backups are particularly exposed.
Higher-income consumers, who visit retail and hospitality venues more frequently and rely more heavily on digital payments, are especially affected by these disruptions.
“Outages don’t just stop transactions; they break the customer journey and disrupt essential services. To stay resilient, businesses need real-time visibility, the agility to adapt in real time, and technologies that auto prevent and auto remediate disruptions. In a world where disruptions are inevitable, speed and insights are a business’s most valuable safeguards,” said Alois Reitbauer, Chief Technology Strategist, Dynatrace.
Richard Lim, CEO, Retail Economics, added: “Investing in robust, fail-safe payment infrastructure isn’t just about mitigating risk; it’s about safeguarding future growth and maintaining a competitive edge.”
The issue of payment system failures is not unique to retail and hospitality. Recent data from the Treasury Committee revealed that nine of the UK’s top banks and building societies experienced at least 803 hours—over 33 days—of unplanned tech and systems outages in the past two years. At least 158 incidents affected millions of customers’ ability to access and use services between January 2023 and February 2025.
“For families and individuals living paycheck to paycheck, losing access to banking services on payday can be a terrifying experience. Even when rectified relatively quickly, it can cause real panic, which is why we wanted to get a proper understanding of why unplanned banking outages happen and how banks and building societies respond,” said Dame Meg Hillier MP, Chair of the Treasury Select Committee.
Steve Rackham, CTO of Financial Services at NetApp, commented: “For thousands of customers, this was more than a glitchy application. People were unable to pay rent or mortgages, and businesses struggled to meet payroll obligations. These failures have underscored the vulnerability of digital operations and the urgent need for robust resilience strategies.”
Common causes of these outages include problems with third-party suppliers, system changes, and internal software malfunctions. The findings underscore the need for businesses to invest in resilient payment infrastructure and to align their risk management with real consumer behavior.
