Embedded finance has become increasingly mainstream, with UK consumers craving convenience in ever-greater numbers when it comes to payments.

A report from global card issuing platform, Marqeta, finds that 72% of UK mobile wallet users surveyed have now made a purchase via a retailer’s embedded mobile app.

Confidence extends to digital payment processes. Some 76% of UK respondents state that they will always add a new card to their mobile wallet, and 89% believing this to be a “simple” process, up from 81% in 2022. As a result, 93% of UK mobile wallet users report having one or more cards loaded into their mobile wallet.

Embedded finance, digital financial services: no longer a novelty

Marqeta’s 2023 State of Payments report reveals consumers no longer treat embedded finance and digital financial services as a novelty.

Almost half of UK respondents would consider getting financial services from non-financial providers including tech companies, social networks or retailers.

Some 77% of UK respondents have no intention of leaving their primary bank provider. But consumers are balancing loyalty with a desire for superior user experience.

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Almost three-quarters (73%) of UK mobile wallet users surveyed said they would now feel confident enough to leave their wallet at home, and only rely on their phone for making payments.

Mobile payment methods continue to rise in popularity as convenient, frictionless payments take precedence.

Beyond this, 73% of UK consumers surveyed report using peer-to-peer (P2P) payment transactions at least once.

Marqeta 2023 State of Payments report – other findings include

95% of UK consumers surveyed report using contactless payments in the past 12 months. Meantime, 68% of UK consumers surveyed reported using a mobile wallet in the last 12 months

65% of UK consumers surveyed believe cash will disappear completely. 44% believe this will happen within the next ten years.

“Embedded finance is enabling brands to become financial service providers. It offers consumers more streamlined payment experiences,” said Jeff Parker, SVP and MD, International at Marqeta. “Our report shows that after years of massive digital innovation, consumer confidence in modern, embedded payment methods is high. Companies who don’t offer these can miss out on future adoption.”

UK consumers remain loyal to incumbent banks

Marqeta’s study notes that, while demand for digital and embedded finance services is moving into mainstream adoption, UK consumers remain resolutely committed to their primary or traditional banks. 84% of respondents said they used traditional banks as their primary providers. Meantime, 41% state that they had remained with their bank for over ten years. A further 77% said they had no intention of changing their primary banking provider. The vast majority of respondents use their primary bank provider for debit card (77%) or savings account (53%) services.

But UK consumers balance loyalty to their primary banking providers with their desire for superior user experiences for certain capabilities. 43% of UK respondents would now consider getting financial services from non-financial providers including tech companies, social networks or retailers.

Parker added: “We’re at an inflection point when it comes to legacy providers coexisting with new-age payment services. While our report shows a current balance between traditional and digital-first, embedded finance is challenging companies to think about how they build payment solutions into their offerings. Long-term consumer loyalty will depend on who can provide the most exceptional end-to-end user experiences.”