By Shona Sabah (Senior Manager - Strategic Growth Lead)
Payment providers spend a lot of time thinking about merchants, but far less time is spent actually asking merchants what they think - not in a sales call, where politeness tends to win out, but at scale, anonymously, where the honest answers come out.
That's the gap The Merchant Lens UK 2026 was designed to close. KAE surveyed 200+ UK merchants across Retail & eCommerce and Hospitality, from sub-£5m independents to £50m+ enterprises, all of whom hold direct responsibility for choosing their organisation's payment provider. The result is a clear, evidence-based picture of where providers are doing well, where they're exposed, and what merchants say would make them switch in the future.
Here's a look at what we found...
The headline number won't surprise anyone who's tried to win a merchant away from an incumbent: 92% of merchants say they're satisfied with their current provider, and 88% would recommend them to another merchant.
But satisfaction and loyalty aren't the same thing. Underneath that positive top line sits a more fragile picture - one shaped by inertia and unresolved friction as much as by genuine advocacy.
94% of merchants said they could be prompted to switch provider in the future.
That single stat reframes the other two. Merchants aren't locked in because they're delighted - many are staying put because switching feels like effort, not because the alternative looks worse. For providers, that's a narrow and time-limited advantage.
One of the more commercially useful findings is what merchant satisfaction is actually built on. Our driver analysis shows it's overwhelmingly shaped by experience - customer service, reliability, ease of use - rather than by technical platform capability. Merchants told us that integration, fraud tooling, and cross-border functionality matter, but they are now expectations. They don't reward you for having them, but do notice when they're missing.
That has real implications for how providers pitch themselves and it's one of the reasons why, when we mapped 16 major UK payment brands against how merchants actually perceive them, no single provider clearly owns a distinctive position in the market. A handful emerge as strong all-round performers, a few lean heavily into infrastructure and scale, and several cluster in the middle with no clear identity at all. The competitive landscape is far more crowded, and far less differentiated, than perhaps most providers assume.
Against that backdrop, we asked merchants directly what would prompt them to review or change provider. Cost pressure tops the list by some distance, but it's not the whole story. Technical downtime and poor customer support both feature heavily too, and the picture shifts meaningfully once you cut it by business size.
Cost pressure is a significantly stronger trigger for smaller businesses in isolation, while switching among larger organisations is more often driven by technical issues, customer demand for new payment methods, and cost together. New business needs, integration requirements, and demand for new payment methods also rank as meaningful switching triggers as businesses grow - a reminder that "'stability' today doesn't guarantee retention tomorrow.
We then went further and asked merchants about the specific frustrations they'd actually experienced in the past 12 months. High transaction costs top that list too, but a cluster of operational issues (slow settlement, poor support, fraud and chargeback handling, downtime) sit close behind, and the report shows how these frustrations skew sharply by sector and business size.
Want the full ranking of all 11 switching triggers and all 18 frustration points? — Download the full report for free.
Obviously those frustrations don't just sit quietly forever. Rather, we found that they shape what merchants scrutinise when they go looking for a new provider.
Transparent pricing leads clearly, but it's followed closely by trust in the brand and confidence that the platform will simply work. Interestingly, priorities shift by business size. Smaller merchants rank pricing well above everything else, mid-sized firms weight brand reputation and fraud prevention just as highly as pricing, and larger organisations put international and multi-currency capability ahead of cost altogether. There's no single pitch that lands the same way with every merchant segment.
This might sound like we're painting a negative picture, but this isn't a study of dissatisfied merchants looking for an exit - far from it. It's a study of merchants planning for growth, and wondering whether their current provider can keep up. It's positive and forward-looking, and providers should be excited by the opportunities this presents.
And crucially, a meaningful share said they'd pay for these services if offered by a provider.
Fraud prevention leads as the most monetisable capability, but data and analytics services aren't far behind - and larger businesses show a significantly higher willingness to pay across the board than smaller ones. This reframes the commercial conversation, or at least it should do. These aren't retention sweeteners to bundle in for free. For the right capabilities, there's a genuine revenue case.
Want the full list of 11 services merchants want, what they already have, and what they'd pay extra for? — Download the full report for free.
The report also maps improvement demand against switching likelihood and willingness to pay, to show you exactly which capabilities are strategic priorities versus baseline expectations.
From account-to-account payments and biometric authentication to embedded finance, AI-based orchestration, agentic payments, and stablecoin, merchant awareness of what's coming next is strong across the board. Account-to-account payments and biometric authentication are seen as the most immediately important, particularly among larger organisations - but even more forward-looking concepts like agentic AI and autonomous payments already register as relevant to over 60% of merchants overall, rising sharply among enterprise businesses.
Awareness doesn't automatically translate into readiness, though. For every trend, merchants were candid about the barriers holding them back - from customer acceptance and privacy concerns around biometrics, to questions of accountability and governance around AI-based orchestration, to a simple lack of customer demand for stablecoin. Each barrier looks different, and each needs a different response from providers.
Want to see merchant sentiment on all six emerging payment trends - including adoption barriers, what would build trust, and how appetite differs sharply by business size? — Download the full report for free.
Merchants have told us, in detail, what frustrates them, what would make them leave, what they'd pay for, and where they think the industry is heading. For providers working on acquisition strategy, product roadmaps, or commercial positioning, that's a rare and specific kind of intelligence and one that's hard to get from a merchant relationship alone.
The full report closes with five key takeaways for payment providers, covering where complacency creeps in, how to earn (not just assert) differentiation, and why the improvement agenda merchants describe is really a retention agenda in disguise.
The full Merchant Lens UK 2026 report includes:
You can get your free copy of the full report here.
And if you want to speak to an expert about how KAE can help you make data-backed marketing, product and strategy decisions, book an intro call today.