UK Payment Firms Pay More to Ensure Compliance Than Us Firms Finds AutoRek

auto trekSettlement and financial automation fintech has announced the results of its global payments survey. The study aimed to understand the current issues and future trends facing payment companies. This is in addition to their awareness of regulation, compliance and payment coordination.

Most notably, the survey found that 63% of payments companies believe the regulatory burden will increase over the next two years. This is most pronounced in the US, where nearly half (47%) of US respondents acknowledge that compliance spending will increase. In the UK, on the other hand, only 29% of businesses expect to spend more. UK companies in particular spend considerably more (325,000 on average) to ensure compliance than in the US (304,101 on average).

Impact of increased demand

As consumer demand for real-time payments grows, the payment industry as a whole is under pressure to respond quickly to this growing need. Research shows that most global payments companies will be ready for real-time payments within the next 12 months, but there are still significant differences between UK and US readiness. U.S. payments companies are confident in their ability to accommodate real-time payments. In the UK she was only 50%, whereas 70% said they were already ready.

The payments industry has embraced technology much faster than the banking industry, but 65% continue to use spreadsheets for critical financial management processes. Two-thirds of his US survey respondents (67%) reported being overly reliant on spreadsheets, compared to only half of UK respondents.

Manual processes lead to inefficiencies, with nearly a third (29%) of U.S. businesses saying their back-office costs are increasing in proportion to increased payment volumes. This is in stark contrast to UK companies who reported back office costs were growing at a slower pace than payments due to widespread back office automation.

Differences in regulatory environments

Gordon McHargAutoRek CEO commented on the report’s findings:

We expect the payments sector to double its revenues by the end of the decade. The current recession means payments companies are likely to face their biggest challenge yet. “It is important to keep operating costs low while new regulations come into force. Firms must continue to innovate and adapt to remove inefficiencies and stay ahead of adverse economic impacts.”

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Nick BotaAutoRek’s payment officer added:

Our payments report shows clear differences between the UK and US regulatory landscapes, strategic priorities and future prospects. 2022 was a tumultuous year for payments on both sides of the pond. Nonetheless, the types and volumes of payment methods are expected to continue to grow, which is a positive sign, and we hope this report highlights areas of challenge and opportunity for the global payments industry. “

Additional findings from the report include:

• 42% of UK-based respondents expect the number of cross-border payments to decrease. This compares to 28% of U.S. companies.
• 14% of payment companies are not profitable and 33% are at breakeven. US companies are more likely to make a profit than others.
• Key focuses of regulatory scrutiny include customer protection, operational resilience, crypto payments, and data protection. Sixty-four percent of his respondents believe the US will adopt a similar approach to the UK’s protection rules.
• More than half (60%) of businesses expect payment methods and amounts to increase in the future.

of Research consisted of over 500 mid-career professionals working in IT, financial and operational payments companies in both the UK and US.