Payment Friction Costs Middle Market Firms Nearly 2% of Annual Revenue

Payment friction rarely arrives as one clearly identifiable expense. That’s probably why most executives think about payment friction as an inconvenience and not a hidden-in-plain-sight margin and revenue problem.

But new findings in the June 2026 edition of The 2026 Certainty Project, a PYMNTS Intelligence and Plaid collaboration, reveal that middle market companies experiencing recurring payment friction estimate that delays, payment errors, fraud and the work required to resolve those issues consume nearly 2% (1.92%) of annual revenue. That is more than six times the cost reported by organizations with relatively friction-free payment operations, according to the PYMNTS Intelligence research.

After all, imagine a common scenario where a security review delays a payment, which prompts a supplier inquiry. An employee investigates, another team verifies the transaction and a manager approves an exception. The transaction may eventually settle, but the organization has already absorbed extra labor, slower cash movement and damage to the commercial relationship.

The findings reflect a broader shift taking place across enterprise payments. For years, modernization efforts focused on moving money faster. Today, the competitive advantage lies in moving money reliably.

Payment Friction Has Become a Revenue Leak for Mid-Market Firms

The study found that organizations with recurring payment friction lose an average of 1.92% of annual revenue, compared with just 0.31% among companies where payments move more smoothly.

For a company generating $500 million annually, that represents nearly $10 million in lost economic value each year. Unlike a major cyberattack or supply-chain disruption, however, these losses rarely appear in one place. They accumulate across delayed approvals, manual intervention, failed transactions, customer service interactions and payment investigations. Instead of one catastrophic failure, companies experience hundreds of small operational breakdowns that collectively reduce profitability.

The research also highlighted a growing challenge for finance leaders: balancing fraud prevention with customer experience.

More than half of chief financial officers reported that fraud controls have delayed legitimate payments, creating friction for customers or business partners. Meanwhile, most executives said their organizations continue to struggle to combine fast payments with strong security. Organizations that consistently require payment follow-up, manual verification or exception handling introduce unnecessary effort into every customer interaction.

Read the report: When Controls Slow Commerce: The Data Behind Middle Market Payment Friction

In B2B commerce, where relationships may involve high-value invoices, repeated transactions and complex supplier networks, payment reliability can influence which companies customers and partners consider easy to work with. A transaction that requires repeated emails, unexplained verification or inconsistent authentication creates an experience problem even when the payment ultimately succeeds.

Among CFOs at recurring-friction companies, 44% said payment reliability was critical to retaining customers, and 88% described it as having at least a moderate effect. Among friction-light companies, just 4% considered the link critical.

That disparity is revealing. Firms with reliable payments may rarely hear customers discuss payment performance because the process has become invisible. Companies with unreliable systems experience the opposite. Payment status becomes part of the customer conversation precisely because the infrastructure is failing to meet expectations.

This means the return on payment modernization may be broader than traditional efficiency calculations capture. Faster reconciliation and lower processing costs matter, but so do fewer support interactions, stronger supplier relationships and reduced customer attrition.

The divide is increasingly between companies improving the communication around friction and those redesigning the infrastructure that produces it.