A survey commissioned by payments network Affirm has found that 79% of UK small and medium-sized businesses (SMEs) say their customers now expect checkout options beyond debit, with 43% expressing concern about their ability to compete with larger retailers as consumer expectations rise.

The research, conducted by Censuswide among 500 UK SME owners and senior decision-makers in late June and early July 2026, was published on 12 August to coincide with new Buy Now, Pay Later (BNPL) rules coming into force in the UK. The findings are positioned by Affirm as evidence that regulatory change creates a commercial opening for compliant flexible payment products aimed at the SME segment.

The numbers behind the pressure

The survey data points to a gap between SME ambition and SME capability. Some 88% of respondents said offering flexible payment options such as BNPL would drive business growth, and 85% said such options had a positive impact on customer experience. SMEs also reported specific commercial outcomes from offering flexible payments: 85% cited improved conversion rates, 84% improved average order value, and 85% increased repeat purchases. Whether these figures reflect current users of flexible payment products or are aspirational responses from non-users is not clarified in the release, a distinction that matters when weighing the strength of the causal claim.

Cost and complexity remain the primary barriers. More than half of respondents (51%) said they were concerned about the cost of regulation and compliance. That concern is timely: the new UK BNPL regulatory framework, which brings consumer credit rules to previously unregulated deferred-payment products, adds due-diligence and disclosure requirements that smaller merchants must now navigate, often without the in-house compliance resource that larger retailers carry.

Ruth Spratt, UK country manager at Affirm, said: “Small businesses are being asked to meet the same customer expectations as the biggest retailers, often with far fewer resources. Flexible payments can help level the playing field by improving conversion, increasing order value and encouraging repeat purchases.”

Affirm also highlighted a preference among SMEs for transparency: 77% said it was important to offer a BNPL option that does not rely on late fees or hidden penalties. The company says its own product carries no late fees, a point of differentiation it has pressed consistently in its UK market positioning.

Regulatory and competitive read-across

The UK BNPL regulatory moment is significant structural context here. The Treasury’s decision to bring BNPL under the Consumer Credit Act framework, anticipated for years and now in force, changes the compliance calculus for every provider in the market. Established players including Klarna and Clearpay have spent several years preparing for the regime; newer or smaller entrants face a steeper proportional burden. For merchants, the practical effect is that they must now assess the regulatory standing of any BNPL partner before offering the product at checkout.

The SME segment has historically been underserved by BNPL networks that were built around high-volume consumer-facing retail. Several providers are now competing explicitly for SME distribution, including through integration with e-commerce platforms and point-of-sale systems. Affirm, which entered the UK market from its US base and reports over half a million merchant partners globally, is using this survey to press its claim in that segment. The research methodology is credible and the sample size reasonable for a UK SME study, though the findings should be read as advocacy research supporting a commercial launch or expansion narrative rather than independent analysis.

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