Every friction point adds up, from cart abandonment to failed renewals and missed upsells. Find out where it's costing you — and how to lower the tax.
Ecommerce is supposed to make growth easy and scalable.
But most software companies are unknowingly paying a hidden surcharge at the point of sale — a “friction tax” that quietly drains revenue across checkout, billing, renewals, and expansion.
In The Friction Report: What’s Slowing Down Global Software Sales, our global study of 1,700+ software sellers and buyers, we defined this “tax” through the lens of cart abandonment. Nearly half of sellers (47%) admitted to losing at least a quarter of online orders during checkout — 12% lose half or more. That’s billions in preventable revenue slipping away before buyers ever click “Confirm Purchase.”
But as the data shows, the friction tax doesn’t stop at checkout — it compounds across every stage of the customer journey.
The friction tax is the measurable revenue lost to avoidable buyer friction — abandoned checkouts, failed payments, or canceled renewals that could have converted.
Sometimes the barriers are visible: extra checkout steps, unclear pricing, missing payment options. But often, they’re harder to discern, in the form of limited localization and renewal confusion — not to mention backend issues like compliance and tax hurdles that disrupt sales.
Every time a buyer hesitates or abandons, friction collects its toll. And more often than not, your competitors are there to capitalize.
For high-growth SaaS vendors, that toll is steep. Reducing even a few points of key friction can reclaim millions in annual recurring revenue. Every percentage recovered is money back in your pocket.
At checkout. That’s where the tax begins, and where it’s easiest to measure.
Why it happens: Sellers assume buyers prioritize speed or a clean UX, while buyers actually prioritize trust, clarity, and flexibility. When the experience fails to meet those expectations, revenue quietly slips away.
Survey data illustrates the gap between perception and reality, as well as the alarmingly high rate of drop-offs due to friction.
Regional nuance: Checkout friction looks different around the world, but the trigger is often the same — limited localization. Only 49% of sellers fully localize their checkout experience by market, even though 96% of buyers expect it. The gap is widest in Europe, where sellers localize checkout less often and feel least confident in their language and currency optimization compared to North America and APAC.
Actions to reduce checkout friction:
Once a buyer converts, you might assume the tax stops. It doesn’t.
In fact, 79% of buyers report post-purchase friction, despite 91% of sellers believing the experience they deliver is smooth. That disconnect exposes a costly blind spot in subscription management and renewals.
Why it happens: Billing confusion, delayed support, and opaque renewal processes make buyers feel trapped rather than retained. When customers struggle to do something as simple as updating payment info, voluntary churn skyrockets.
Meanwhile, payment failures, expired cards, and other causes of involuntary churn also silently eat into your monthly recurring revenue (MRR) — all while you keep paying to reacquire lost users.
Generational nuance: Younger buyers (Gen Z, millennials) value assurance in the form of easy refunds and money-back guarantees. Older buyers (Gen X, boomers) prioritize clear billing & renewal information, along with responsive support.
Actions to reduce post-purchase friction:
Friction doesn’t only cost you renewals, it prevents growth from existing customers.
The tax is cumulative. A small barrier in one interaction compounds across an entire customer lifecycle, putting a strain on product expansion (e.g., cross-sells and upsells).
Why it happens: Ecommerce ownership is often fragmented — responsibility is split across marketing (39%), IT (28%), and finance or operations (24%). The absence of unified ownership leads to inconsistent buyer experiences: offers lack personalization, billing lacks context, and customers get disjointed messaging instead of a clear path to upgrade.
Actions to reduce product expansion friction:
Let’s run the math.
If your online sales total $10 million annually and your cart abandonment rate matches the survey average (27%), that’s $3.7 million in lost revenue — before even counting failed renewals and voluntary churn.
And the higher your revenue, the bigger the tax:
Add up abandoned carts, missed renewals, and unrealized expansion potential, and the friction tax can easily exceed 20–30% of your total addressable revenue, a conservative estimate based on the Friction Report’s findings across the customer lifecycle.
You can’t remove friction entirely; every global business faces operational and customer experience challenges as they scale. But you can dramatically reduce its impact by taking a proactive, system-wide approach.
The most effective way to combat the friction tax is to unify and simplify the systems that power your ecommerce experience: checkout, billing, tax, and compliance. Start by identifying where those workflows break down or overlap, and eliminate extra steps that slow buyers down or create internal inefficiencies.
You don’t need to overhaul your entire stack overnight. Companies can start reducing friction by mapping their full buyer journey, consolidating redundant tools, improving data visibility between teams, and tightening how payments and renewals are handled. Over time, these incremental fixes create the same connected foundation that the merchant of record model is built to deliver.
By replacing fragmented systems with an integrated ecommerce solution, you reduce friction, recover conversions, and build a smoother path to sustainable growth.
Every hidden click, unclear price, failed renewal, or compliance delay adds up.
Friction is a tax you’ve been paying without often realizing it, but it’s one you can stop.