UK SMEs rank faster settlement and security above payments novelty

UK small and medium-sized businesses are putting faster access to funds and payment security ahead of newer payments technology, according to research commissioned by DECTA and conducted by Censuswide. The survey of 500 UK SME decision-makers found that 19.4% cited the ability to receive funds quickly as a constraint on their business, while 51.8% ranked security as their top priority when choosing payments services.

The findings point to a practical agenda for payment providers serving a large part of the UK economy. UK government Business Population Estimates put the number of private-sector businesses at 5.7 million, with SMEs accounting for 99.9% of them, 60% of private-sector employment and 51% of turnover, equal to about £2.8 trillion a year.

DECTA said the survey showed a merchant base that remains broadly confident but dissatisfied with parts of the payments industry. According to the research, 82% of merchants believe their business will survive the next three years, and 52.8% expect UK conditions to improve. At the same time, 40% said they do not feel supported by payment technology companies.

Cash flow remains the central pressure

The most frequently cited business constraint in the DECTA survey was receiving funds quickly. Among firms with turnover of £1 million to £9.99 million, the share rose to 24.6%.

That concern sits alongside, but is distinct from, late payment. Settlement refers to the time between a customer making a payment and the money arriving in the merchant’s account. Late payment refers to invoices that customers have not paid. Payment providers can influence settlement speed through their risk controls, processing arrangements and access to payment rails, while unpaid invoices are a broader commercial and legal issue.

Government research cited by DECTA estimates that UK businesses are owed about £26 billion in late payments at any one time, with late payment costing the economy almost £11 billion a year and contributing to 38 business closures a day. Separate analysis by Sage and the Centre for Economics and Business Research put the amount of working capital tied up in overdue invoices at £112 billion.

Security outranks price

When asked what mattered most in payments provision, 51.8% of merchants chose security, compared with 39.2% who chose the latest technology and 7.2% who selected lower fees, according to DECTA. The security preference was stronger among micro businesses, where 62.1% put it first.

DECTA said trust in payments infrastructure includes fraud protection, service availability, predictable fund arrival times and understandable statements. The survey also found differences by firm size, with larger SMEs more likely to prioritise payments capability.

Merchants also identified what they believe their customers value at checkout. Payment security was cited by 48.6%, simplicity by 42.2%, and speed and multiple payment options by 36.4%.

Newer payment methods also appeared in the responses. Buy Now Pay Later was seen as a customer priority by 18.4% of merchants, rising to 28.1% in Greater London. Open Banking was cited by 15.2% overall and by 30.4% in the North West. Open Banking Limited data cited by DECTA showed 16.5 million UK user connections by the end of 2025, with payment volumes up 57% year on year.

Cross-border exposure adds complexity

DECTA also pointed to the international dimension of SME payments. Research by the Federation of Small Businesses found that six in ten small exporters are passive exporters, meaning they trade internationally because overseas customers approached them rather than because they set out to sell abroad.

For payment providers, that creates demand for services that can handle multiple currencies, payment methods, fraud risks and counterparties. Among merchants who said the payments industry does not support businesses like theirs, DECTA said complaints included high fees, cited by 27.2% of micro businesses, and slow or complex integration, cited by 9.4% overall and 17.4% in the West Midlands.

This story draws on original reporting from Finextra Research.