Adapting to Changing Customer Behaviour is Now a Top Priority for Nine in Ten Retailers

WHY THIS MATTERS: This Lloyds research confirms a fundamental re-architecture of the retail sector, driven not just by consumer preference, but by the operational imperative of speed. The critical takeaway is that the payments function has officially migrated from a passive point-of-sale utility to critical core business infrastructure. Retailers are under simultaneous pressure to deliver seamless customer experiences and achieve backend efficiency, with 77% citing integrated reporting as vital. This movement validates the rise of embedded finance, where services like cash flow management and instant reconciliation are integrated directly into a merchant’s daily workflow. Those operating on legacy systems that cannot deliver real-time payments for faster access to funds risk falling behind. For fintechs, this report is a clear mandate: the battleground for market share has moved from the checkout lane to the back office, where system integration and operational resilience define the winners

New research from Lloyds reveals that 91% of UK retail business owners and decision-makers say adapting to changing customer behaviour is now a top business priority, as retailers face growing pressure to deliver faster, easier and more flexible experiences, both in-store and behind the scenes.

The new report, More Than Checkout: The Role of Payments in Retail in 2026, explores how changing customer expectations are reshaping the retail sector, and why payments now play a far broader role than simply processing transactions.

Based on a survey of 1,000 UK retail business leaders, the report finds that retailers are managing pressure from two directions: what customers expect at the checkout, and what running the business efficiently demands behind it. Speed, payment flexibility and easy checkout are front of mind for shoppers, while reporting, cash flow, system integration and operational resilience matter just as much for the people managing the business day to day.

Key findings from the report include:

• 91% say adapting to changing customer behaviour is now a strategic priority
• 84% say their expectations of payment providers are higher than two years ago
• 80% say accepting all major cards and wallets is important to day-to-day operations
• 77% say checkout speed is important to daily trading
• 77% say integrated reporting and reconciliation is important to operations
• 46% say customers now expect mobile or flexible checkout options
• 44% say faster access to funds will become a competitive necessity

Five major shifts shaping UK retail in 2026:

• Every second now counts: Speed is critical across the entire customer journey, from service and fulfilment to checkout and issue resolution.
• Retail is judged by how easy it feels: Customers increasingly weigh convenience, service, fulfilment, price and checkout together, raising expectations for frictionless experiences.
• Checkout is becoming flexible, not fixed: Retailers are expanding beyond traditional tills, blending fixed, mobile and in-aisle payments to meet changing customer needs.
• Retail now depends on systems that perform: Payment reliability, integrated systems and provider support are becoming essential to keeping businesses running smoothly.
• Payments now influence far more than the checkout: From managing customer flow to protecting cash flow, payments are now embedded in how retail businesses operate day to day after the checkout.

David Thomasson, Managing Director, Business Transaction Banking, Lloyds Banking Group, said: “UK retail is entering a phase where speed, simplicity and flexibility define competitiveness across the entire customer journey. Payments have moved from a point‑of‑sale function to core infrastructure, shaping everything from customer experience on the floor to operational performance and cash flow behind the scenes.”

The report highlights a growing divide between retailers that are simply keeping up and those investing in stronger operational foundations for the future. For smaller businesses, simplifying payments can ease admin pressure and protect cash flow. For larger retailers, integrated payment systems increasingly support consistency, scalability and performance across multiple sites.

Those best placed to keep pace will be the retailers that treat payments as part of how they run the business and not just how they close a sale. The report sets out what this looks like in practice, from the shop floor to the back office.

The full report is available now: More Than Checkout: The Role of Payments in Retail in 2026.

FF NEWS TAKE: The data definitively moves the needle by framing payment modernization as a necessity for retail digital transformation, not just an enhancement. It highlights a deepening divide: those investing in system integration and operational resilience will thrive. Fintechs must now move beyond simple transaction processing and prove their value by automating and securing the back-office flows. The next phase to watch is the adoption of AI-powered solutions that turn real-time payment data into instant, actionable cash flow and reconciliation services for merchants.