The UK is entering a golden era of payments driven by the digital wallet boom. Projections estimate that digital wallet usage will more than double at UK point-of-sale (POS), rising from 14% to 29% of transaction value over the next three years. By 2027, this will represent £493bn total transaction value, underscoring a seismic shift in consumer behaviour.
That is according to new findings from Worldpay, revealed in its Global Payments Report 2024. The report, which provides in-depth analyses of the payments landscape across 40 countries, indicates that by 2027, digital wallets are expected to comprise half of all e-commerce spend in the UK, worth £203.5bn.
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Digital wallets emerged in the late 1990s, steadily gaining in popularity from the mid-2000s, but it was the COVID-19 pandemic that provided the tipping point for adoption globally. Now established as a ‘go-to’ payment type for UK consumers, the maturity of the technology is giving consumers the confidence to try new ways to pay. 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% compound annual growth (CAGR) through 2027.
Cash made up 10% of POS transaction value in 2023
Underpinning digital wallet adoption in the UK, however, is the deep connection Britons have to traditional payment methods like credit and debit cards, which 69% of consumers use to fund their wallets. Credit and debit card usage outside of digital wallets continues to be strong. Credit and debit cards accounted for 46% of e-commerce and 74% of POS transaction value in 2023. The findings reveal how established payment preferences and behaviour is carrying over to new modalities, like digital wallets.
Further UK insights from the report revealed that Buy Now, Pay Later (BNPL) accounted for 7% of e-commerce transaction value in 2023, and is expected to grow at 4% CAGR through 2027. Cash made up 10% of POS transaction value in 2023, and is expected to drop to 6% by 2027, mirroring the global rate of decline at -6% CAGR through 2027.
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