The UK is entering a golden era of payments driven by the digital wallet boom, according to a survey of activity in 40 countries.
A report, which authors insist provides one of the most in-depth analyses of the payments landscape, indicates that by 2027, they are expected to comprise half of all the e-commerce spend in the UK, worth £203.5 billion.
Projections also estimate that digital wallet usage will more than double at UK point-of-sale rising from 14 to 29 per cent of transaction value over the next three years, according to Worldpay.
Digital wallets emerged in the late 1990s, steadily gaining in popularity from the mid-2000s. But it was the pandemic that provided the tipping point for global adoption. Now established as a ‘go-to’ payment type for consumers, the maturity of the technology is giving consumers the confidence to try new ways to pay.
Worldpay research suggests digital wallet use in the UK is providing a welcome boost to the world’s third-largest e-commerce market, which is expected to see 7 per cent compound annual growth through 2027.
It is hard to deny the ease of use and convenience digital wallets provide … merchants now have a huge opportunity to diversify their payments choice to meet customer needs
“Consumers are driving a revolution in the payments landscape. The combined effect of the pandemic, alongside digital wallet technology reaching a level of maturity and implementation in recent years has driven a monumental rise in adoption both globally and locally in the UK, said Pete Wickes, General Manager, EMEA.
“It is hard to deny the ease of use and convenience digital wallets provide whether shopping in store or online. From this basis, merchants now have a huge opportunity to diversify their payments choice to meet customer needs.”
Underpinning this, however, is the deep connection the British have to traditional payment methods such as credit and debit cards, which 69 per cent of consumers use to fund their wallets.
Credit and debit card usage outside digital wallets continues to be strong, accounting for 46 per cent of e-commerce and 74 per cent of POS transaction value in 2023. The findings reveal how established payment preferences and behaviour is carrying over to new modalities.
Kate Nightingale, Consumer Psychologist and founder of Humanising Brands said: “Adoption of new payment methods is a complex cognitive and affective decision-making process. Outside a considered evaluation of benefits, like convenience, self-expression and brand incentives, and risks such as safety and privacy concerns, the most impactful promoter of adoption is trust.”
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