Shifts in the SMB payments landscape
The payments landscape for SMBs has undergone significant transformation between 2023 and 2025. Our latest research reveals four key trends reshaping the industry: a shift away from traditional acquirers, growth in the ecommerce adoption, increased digital searching behaviours, and the emergence of AI in the search process.
Movements within the main acquirers
Barclaycard and Worldpay, once the undisputed giants of the payments ecosystem, have seen their combined market dominance drop by 14.5%. In 2023, Barclaycard captured 38% of the SMB market, with Worldpay holding 18%. By 2025, these figures have declined to 35% and 12% respectively.
This shift indicates SMBs are increasingly drawn to smaller acquirers, potentially due to a belief that these players are more agile and better serve SMB needs. The incumbents are not unaware of these shifts, seen by strategic parnerships with ISVs and prioritisation over digital strategies. This, coupled with recent strategic acquisitions, may reshape this landscape; Brookfield's purchase of Barclaycard and Global Payments' acquisition of Worldpay represent calculated moves to capture greater market share across all business segments.
The rise of alternative payment providers
As traditional players lose ground, alternative providers like Stripe, Zettle, and SumUp have collectively gained 5% market share. Particularly noteworthy is Stripe's 3% rise as merchants' primary payment provider, highlighting the ongoing growth of ecommerce within the SMB market.
While incumbents still command nearly half the market, smaller players are creating an increasingly competitive dynamic. Despite often offering competitive pricing, traditional acquirers are losing ground to alternatives that excel in perceived usability and effective marketing campaigns. However, traditional acquirers including Barclaycard and Worldpay continue to lead with reliability, robust security infrastructure, and comprehensive merchant services. Their experience serving a wide variety of businesses provides unique insights into merchant needs that are able to translate into longer term support. The recent acquisitions by Brookfield and Global Payments signal a strategic response to this challenge - potentially creating new competitive dynamics that could ultimately benefit the historically underserved SMB market as we move through 2025 and beyond.
Merchant Sentiment and Behaviour
Compared to our survey in Spring 2023, overall merchant confidence in payment providers has increased, and there was an 11% drop in merchants feeling their fees are too high. Both these stats build to the picture that SMBs are feeling more confident and less overcharged by their payments provider.
Yet interestingly, this improved sentiment hasn't significantly affected switching behaviour, despite the Payment Systems Regulator's 2023 regulations capping contract lengths at 18 months. Just over half of merchants surveyed report being 'happy and not intending to switch,' which is only 1% less than 2023's data (56% down to 55%). Similarly, the length of time an SMB stays with their provider has remained largely the same, with the median length remaining at 2-3 years.
However, a noticeable outlier is F&B businesses. These businesses were less happy and more likely to switch, with an 8% growth in those looking to switch compared to 2023.
How are merchants finding their next provider?
Digital channels now dominate the search process:
- 35% of merchants visit provider websites directly
- 28% use price comparison websites
- 22% respond to ads or emails from providers
However, recommendations remain powerful.
Among surveyed merchants:
- 29% ask other business owners for recommendations
- 19% seek advice from their bank
- Overall, 41.6% relied on at least one form of recommendation in their decision process
When asked how they'd find their next payment solution, 35% cited internet searches as their first approach. However merchants also showed an adoption towards AI tools like ChatGPT and Google Gemini, which signals an exciting new channel in search for payment solutions. Although a form of recommendation currently leads SMB decision-making, the potential for AI to provide quick, comprehensive, and personalised insights represents a transformative opportunity for SMBs navigating the complex payments ecosystem.
PSR Regulation 2 years on
The PSR's interventions have yielded mixed results based on these survey findings. Whilst merchants report better understanding of what they're paying for and are less likely to complain about high fees, switching behaviors haven't significantly changed, and the average relationship length with acquirers remains largely stable.
And, whilst most merchants feel in control of their relationship with payment providers, a concerning 20% still don't. Additionally, 28% remain unsure about what they're paying for - highlighting ongoing education gaps in the market.
Looking forward
The payments market is at a crucial point, dominated by shifting dynamics:
- Decreasing dominance of traditional acquirers
- Growth in the ecommerce and digital-first solutions
- Increasing online search behaviour and emerging AI adoption
- Strong ongoing influence of recommendations
With 89% of merchants able to save by switching providers (PSR review 2023), there remains a significant opportunity to educate SMBs about the benefits of exploring alternatives. As traditional acquirers adjust their strategies following major acquisitions and smaller players continue gaining ground, 2025 promises to be a pivotal year for reshaping the SMB payments ecosystem.
The digital transformation continues, but in this increasingly tech-driven marketplace, the power of personal recommendations and peer insights remains remarkably resilient - a critical insight for payment providers looking to capture market share in this evolving landscape.
This article is based on research conducted by Critical Research and Tuza in 2025 comparing merchant attitudes and behaviours with 2023. The survey included 500 merchants across multiple industry sectors.
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