Failed or delayed payments are far more than a technical nuisance for banks. They create additional costs, strain customer relationships and can cause clients to switch to other providers.

As the study «True Impact of Failed Payments 2026» published on Wednesday by LexisNexis Risk Solutions shows, three quarters of the financial institutions surveyed lose up to five million dollars in customer revenue annually because of failed payments.

For the survey, 150 payments executives at financial institutions in different regions of the world were interviewed.

High Costs for Every Failed Payment

At 37 percent of financial institutions, a failed or delayed payment costs more than 20 dollars. This expense can only be partly offset through fees. Typically, institutions charge only 11 to 15 dollars per failed transaction.

A model calculation by the study authors shows how quickly the costs add up: A bank that processes 10,000 cross-border payments a day and achieves an automation rate of 95 percent still has to manually rework 500 transactions.

At average costs of 12.10 dollars per case, this amounts to a daily expense of just over 6,000 dollars, or around 2.2 million dollars a year. Added to this are possible additional personnel costs as well as financial consequences from dissatisfied customers.

One in Ten Payments Fails on the First Attempt

The study shows that there is still considerable room for improvement in automated payment processing. Only two percent of the financial institutions surveyed achieve a so-called Straight-Through Processing (STP) rate of close to 100 percent for cross-border payments. Just nine percent achieve an automation rate of more than 95 percent. Four out of five institutions are dissatisfied with their current figures.

One particularly striking finding: around one in ten cross-border payments fails on the first attempt.

The study identifies incorrect payment data as the main cause. In 21 percent of failed payments, incorrect beneficiary details are responsible. Problems with account numbers and incorrect bank details account for around 15 percent each.

Banks Lose Customers Because of Payment Problems

The consequences are not limited to internal costs. Around a third of the financial institutions surveyed say they lose between two and five percent of their customers because of failed payments. At the same time, 90 percent believe that high automation rates have a positive impact on customer loyalty.

“Failed payments lead to financial losses, friction in customer relationships and operational rework,” explains Vijay Nagarajan, Director of Market Planning, Payments Efficiency at LexisNexis Risk Solutions.

Many of these problems could be avoided. Better screening and validation of payment data could identify errors at the moment a transaction is initiated.

Europe Leads the International Comparison

The efficiency of payment processing varies considerably by region. Europe performs best: 92 percent of the financial institutions surveyed say that less than five percent of their payments fail or are delayed.

In the Asia-Pacific region, 77 percent of institutions achieve this figure, while in North America the share is 69 percent. The situation is clearly worse in the Middle East, where only around 40 percent of institutions report a similarly low error rate. In Latin America the figure is 26 percent, and in Africa just 19 percent.

The authors cite different clearing systems, regulatory requirements, inconsistent payment data and, in some cases, fragmented banking infrastructure as reasons. The study does not provide separately reported results for Switzerland.

Better Data Instead of Costly Rework

An important approach to improving payment processing is the early verification of beneficiary and account details. Among financial institutions that have already introduced corresponding validation solutions, two out of five report an improvement in their automation rate of more than 25 percent.

The international messaging standard ISO 20022 is also intended to help transmit payment information in a more structured and complete way. “Many of these cases stem from clearly identifiable deficiencies in payment data,” says Robin LoGiudice, Strategic Advisor at Datos Insights.

For banks, this creates a significant economic incentive to automate their payment processes more heavily. After all, the costs of failed transactions are not limited to manual reprocessing, but also include lost revenue and the possible loss of customers.