UK Merchant Acquiring Report - RFi Group

UK Merchant Acquiring Report2019-2020

For questions and enquiries, please contact:• Michael Le Lion, [email protected]

June 2020

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Agenda

1. Methodology

2. Impact of Covid-19 on UK businesses

3. Overview of the customer journey and understanding customer choice

4. Conclusions


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Methodology

• The data in this report is sourced from the H2 2019 and H1 2020 UK Merchant Acquiring Council studies.

• The survey was in field in November/ December 2019 and April/May 2020.

• In total, over 1,000 UK merchants were interviewed online in each of the studies. All merchants accept

card payments via merchant facilities and services provided by a merchant acquirer.

• Basic quotas were applied to the sample to ensure that the data is representative of the UK merchant

population by annual revenues, industry and region. Results have been weighted by annual revenues

using the ONS data and data from the UK Commercial and SME Banking Council surveys.


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Source: RFi Group Research conducted in 2018 - 2020

Sales show the biggest change in sentiment, and subsequently presents the largest operational challenge for businesses

-8%

21%

-7%

11% 10%12%

7%

1%

-8%

15%

-2%

7%

3%

13%

1%

-4%-6%

16%

-8%

5%

14%

9% 8%

0%1%

29%

3%

17%15%

19%

12%

4%

-13% -12%

-9% -9%-7%

-4%

0%

0%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Currency

fluctuations and FX

risk

Sales Impact of

regulatory and

legislative change

Management of

margins and profits

Access to funding Management of

cash flow

Employee

recruitment

Rental cost

Please indicate whether the business expects these challenges to worsen or improve over the next 12 months.Trend – Net sentiment (% Improve - % Worsen)

18H1 18H2 19H1 19H2 20H1


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Source: RFi Group Research conducted in 2018 - 2020

Market overview

58%63%

0%

20%

40%

60%

Proportion of businesses that accept card

payments

18H1 18H2 19H1 19H2 20H134% 13%53%

87% 66%

What proportion of businesses sell goods/ services E-commerce or F2F?

All E-commerce presence All F2F presence

E-commerce only E-commerce & F2F F2F only

13%

7%

6%

7%

7%6% 6%

19%13%9%

5%

2%

Less than 1 year 15%

1 year to less than 3 years 33%

3 years to less than 5 years 29%



20 years or more 1%

Businesses have an acquiring relationship with their

merchant acquirer for 4.1 years on average.

47%

41%

12% % that use different

providers for E-

Commerce & F2F

% that use the same

provider to accept

both E-commerce &

F2F

Merchants that only

sell via E-commerce or

F2F


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How did the business discover and research the provider(s) it chose for merchant acquiring services?Top 5, by revenueUp to 250k £250k - £1m

33% 27%

31% 23%

20% 21%

17% 20%

14% 20%

Directly via their website

They were recommended to me

Heard by word of mouth

The business did its own research online

They were recommended by a bank the business uses

They were promoted on social media

We reached out to them directly over the phone

Source: RFi Group Research conducted in H2 2019

Merchants primarily go directly to websites, followed closely by recommendation, and word of mouth reputation.

Up to 250k £250k - £1m

34% 25%

26% 22%

22% 19%

18% 19%

16% 17%

E-commerce F2F

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Legal notice and disclaimer

- This presentation has been prepared by Retail Finance Intelligence Pty Limited ACN 121 015 192 and its associated entities worldwide (“RFi Group”) and is provided to you for the purposes set out in the agreement signed by you relating to this presentation.- All information contained in this presentation (including this notice) (“Information”) is confidential. By receiving the Information you are deemed to agree that you will hold the Information in strict confidence and keep it secret, and not reproduce, disclose or distribute the Information to any third party or publish the Information for any purpose. The obligations imposed upon you by this document are in addition to the obligations imposed upon you under any non-disclosure agreement or other agreement signed by you relating to the Information. You agree not to modify or alter the information in any way. If you are not the intended recipient you must not use or disclose the information in this research in any way. If you received it in error, please tell us immediately by return e-mail and delete the document. We do not guarantee the integrity of any e-mails or attached files and are not responsible for any changes made to them by any other person.- This Information shall not form the basis of any contract or commitment. No action should be taken on the basis of, or in reliance on, this presentation.- Except as required by law, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the Information, opinions and conclusions, or as to the reasonableness of any assumption contained in this presentation. By receiving this presentation and to the extent permitted by law, you release RFi Group and its officers, employees, agents and associates from any liability (including, without limitation, in respect of direct, indirect or consequential loss or damage or loss or damage arising by negligence) arising as a result of the reliance by you or any other person on anything contained in or omitted from this presentation.- Any forward looking statements included in this presentation involve subjective judgment and analysis and are subject to significant uncertainties, risks and contingencies, many of which are outside the control of, and are unknown to, RFi Group or its officers, employees, agents or associates. Actual future events may vary materially from any forward looking statements and the assumptions on which those statements are based. Given these uncertainties, you are cautioned to not place undue reliance on any such forward looking statements.- Unless otherwise specified in any agreement to which this presentation relates, no responsibility is accepted by RFi Group or any of its officers, employees, agents or associates, nor any other person, for any of the information or for any action taken by you on the basis of the Information.- RFi Group is not licenced to, has not and does not provide any financial advice or deal with any financial products or securities in the process of assisting in the compilation of this Information. This Information does not constitute investment, legal, taxation, financial product or other advice and the presentation does not take into account your investment objectives, financial situation or particular needs. You are responsible for forming your own opinions and conclusions on such matters and should make your own independent assessment of the information and seek independent professional advice in relation to the Information and any action taken on the basis of the Information. RFi Group does not make, adopt or endorse any recommendation in this document.- Unless otherwise specified in any agreement to which this presentation relates, The “Intellectual Property Rights” (meaning any and all patents, rights in inventions, trade marks, service marks, copyrights and related rights, database rights, moral rights, rights in designs, know-how and all or any other intellectual or industrial property rights whether or not registered or capable of registration in any part of the world together with all or any goodwill relating to them) in this presentation and those created by the creation of this presentation and any services to which this presentation relates, shall belong to RFi Group.

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UK Merchant Acquiring Report - RFi Group

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