The 2026 state of SME payments in the UK

UK adoption sits at 60%, five points below the global average of 65%. The reasons SMEs adopt are broadly consistent with global markets. In both, the leading driver is the ability to offer more payment options, with this motivation slightly stronger in the UK (52% versus 50% globally).

The bigger difference lies in what’s holding SMEs back. Nearly half (47%) of UK non-considerers say their “current process works,” compared with 44% globally. This suggests greater comfort with the status quo, making it important that the case for switching is built around clear, tangible benefits that outweigh the perceived value of sticking with the current process.

For 52% of UK SMEs, offering customers more payment methods is a key reason to adopt embedded payments, making it the market’s strongest driver.

The finding underscores how meeting customer expectations across cards, digital wallets, and local payment methods has become table stakes in the UK. Faster access to funds follows closely (49%), alongside reducing manual work (44%), and bringing payments, orders, and reporting into a single system (41%).

Taken together, these priorities suggest that SMEs increasingly value embedded payments for the operational benefits they deliver, not simply their ability to process transactions.

For SaaS platforms, this makes the positioning clear: lead with business objectives, such as broader payment coverage, faster cash flow, and streamlined operations, rather than the underlying technology.

For UK SMEs that have not yet adopted their platform's embedded payments solution, the primary barrier is comfort with established payment relationships and workflows.

Case in point: PayPal (49%), Barclaycard (32%), and Google Pay (31%) are among the most widely used providers. As a result, many non-users say they won't switch because their current payment process works (47%) or that their customers prefer invoices or manual payments (29%).

Among UK SMEs actively considering adoption, the picture shifts from comfort to execution risk. Research shows that the leading obstacles are:

• Technical issues experienced during a previous implementation (23%)

• A preference to keep payments separate for control or simplicity (21%)

• Inadequate onboarding or customer support (20%)

Of the SMEs surveyed in the healthcare industry, 74% report adopting their platform's embedded payments solution. While it represents a high adoption rate, only 42% say they fully understand embedded payments as a concept.

This suggests that adoption is often driven by solving an immediate operational challenge — billing, reconciliation, and reporting — rather than a clear awareness of embedded payments as a category. However, it does point to a growing shift away from legacy payment setups and towards software providers that fit naturally into their workflows.

Healthcare platforms can deepen awareness by helping SMEs see value beyond operational fixes, like faster payouts and payment method flexibility.

Retail SMEs show solid adoption (60%), supported by demand for a wide range of payment methods. 86% view embedded payments positively, citing improved customer experiences and faster payouts, among the top benefits.

However, day-to-day priorities like stock management, sales tracking, and fraud prevention remain pressing for retail SMEs. Beyond embedded payments, 42% desire basic accounting tools and 34% want fraud and security features. It points to a clear appetite for a more integrated retail operating experience.

For retail platforms, the opportunity goes beyond payment acceptance. LPM coverage and faster payouts are a good place to start, but connecting payments to the broader commerce workflow — reporting, fraud protection, and operational visibility — will help SMEs run their business.

Embedded payments can become the foundation for deeper financial relationships between SaaS platforms and their SME customers.

Today, traditional providers remain the primary source of SME financing, with 42% of UK SMEs borrowing from a traditional bank and 34% from a business credit card, compared to 15% borrowing through their software platform.

However, SME expectations are shifting towards financial products that are simpler, faster, and more connected to how they actually operate. It creates an opportunity for platforms to compete on relevance.

When evaluating lending solutions, SMEs place greatest importance on factors like total cost, lender trustworthiness, and a simple application process.

These priorities align with SaaS platforms that already manage critical workflows and have access to transaction data.

A platform that processes an SME's payments has a clearer picture of their revenue patterns and business health than any traditional lender, giving it a meaningful advantage.

But trust is still the deciding factor. Financial products require a deeper relationship than payments alone, which means platforms need to deliver consistent value through everyday experiences before expanding into lending.

The UK market is moving beyond early adoption. Three in five SMEs already use embedded payments and awareness aligns with the global average.

The challenge is no longer proving that embedded payments work. Most SMEs already rate the experience positively.

Instead, it’s about earning the trust to play a more central role in how their business runs. Many remain comfortable with their current approach, making the perceived risk and disruption of switching a significant barrier.

For SaaS platforms, that trust is built through consistent execution: seamless everyday experiences, solutions to real business problems, and a credible, low-risk path into broader financial services.

The goal is to become a trusted operating partner that SMEs can rely on.