Businesses set to lose over $1M in failed payments every year

The company surveyed 900 businesses on their experience with failure rates

failed payments

Businesses set to lose over $1M in failed payments every year. Source: pixabay.com

GoCardless has conducted research revealing that enterprise businesses could lose $1.2 million annually in failed payments.

According to information, mid-market businesses have the highest average failure rate at 3.6%, followed by small businesses at 2.8%. Meanwhile, enterprise businesses have failure rates of just 2.1%.

Consequently, a mid-market business is set to lose $296,800 in uncollected payments annually, while a typical enterprise business will lose $1,165,400.

The survey highlights that businesses that don’t retry payments can expect to see a failure rate of 3.5%. Although, when a business makes just one retry attempt per failed payment, it can expect to see a payment failure rate of 2.4%.

Payments failure rates vary significantly by industry. For instance, Communications and media have the highest average failure rate (6.1%), whereas Membership organizations have the lowest (2.3%), followed by Energy (2.4%).

Along with that, failure rates vary across different payment methods as well. Indeed, businesses that collect payments with e-wallets have the highest average failure rate at 11,5%. As to the credit and debit cards, they have a failure rate of 7,8%. In addition, bank transfers have a 6,4% failure rate.

We’ve reported that global banks are forecasted to face credit losses of nearly $2.1 trillion by 2021 due to the pandemic. In fact, $1.3 trillion are accounting for this year alone, more than doubling the 2019 level.

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