Contactless Payments in the UK

A significant shift has been observed in the UK’s payments landscape with more than half of adults now relying on mobile wallets for both online and in-store purchases, according to a study from UK Finance.

This usage has grown from 42% in 2023 to approximately 57% last year, demonstrating an increasing preference for mobile wallet transactions among the general population.

The growth isn’t limited to younger adults; significant adoption is noted across all age groups, reflecting a broader trend towards cashless payments.

A Central Role of Mobile Banking

Mobile banking has surpassed online banking as the primary method for accessing financial accounts in the UK. About 75% of adults used mobile banking last year, often engaging in various transactions beyond just balance checks.

This increased reliance on mobile banking has also boosted usage of Faster Payments, the country’s real-time payments system.

While card payments remain dominant, they account for roughly 64% of all UK transactions, with debit cards leading as the most common type.

Growth in Buy Now, Pay Later (BNPL)

The report also highlighted a significant increase in BNPL services usage. One in four UK adults opted for these services last year, up from 14% the previous year.

Reshaping Payments with Digital Wallets

Digital payment methods, including real-time payments and contactless transactions via mobile wallets, are redefining the global payments landscape. Mobile wallets act as a central hub, connecting various payment types.

The widespread adoption of smartphones has made digital wallets more accessible, driving continued growth in their usage. Cash usage continues to decline; for the first time, it accounted for less than 10% of all UK payments.