Over the past decade, online sales have increased significantly in the UK, with around 89% of the population making at least one online purchase in 2023. The growth of online shopping has partly been driven by the digital payments revolution, which has made online transactions faster and safer than ever. Digital wallets and mobile banking services give UK consumers more convenience and security.
Digital payments in the UK
Although cash remains a significant method of paying for goods and services throughout the UK, its usage is declining. Many young adults now live almost entirely cashless lives. Digital payments are seen as more convenient and safer, with half of all transactions made in the UK made using debit cards.
The rise of contactless payment technology has made paying for goods and services much more convenient with no need for cash, and the vast majority of businesses now offer contactless payment. While this was already an increasing trend, the COVID-19 pandemic helped accelerate the rise of contactless payments, where cash was seen as a way of spreading the infection.
Of course, with so many shoppers now turning their attention to online stores, this has only driven a further shift towards digital payment services. A significant proportion of the UK population now uses some kind of digital wallet for online payments.
The rise of digital wallets
A recent survey conducted in 2024 found that 42% of the adult population use digital wallets for mobile contactless payments, while 40% of UK consumers use digital wallets for online payments, according to a separate study.
Digital wallets, which include services such as PayPal along with mobile wallets such as Apple Pay and Google Pay, offer fast and convenient transactions. Users can sign up to a service, link their bank accounts and then easily make instant payments both in-store and online.
A major advantage of digital wallets is that they can be used without providing direct banking information, providing an additional layer of security. Not only that, but users can set up two-factor authentication with biometric security to ensure that their account is always safe. This makes digital wallets ideal for online payments.
Of course, digital wallets can also be accessed on mobile, which makes them even more convenient. Thanks to these services, users don’t have to carry their phones and wallets wherever they go. Simply having a phone means that you can always pay for anything you need.
Online casinos like Megaways casino are leading the way in the use of instant bank payments from providers like Trustly and Truelayer. These services allow users to make purchases directly from their bank accounts, bypassing traditional card processing. They’re highly secure and offer instant transfers, with the speed and security providing major advantages for users.
Mobile and instant banking services
Instant banking services such as Monzo and Revolut have really taken off across the UK in recent years. Both mobile banking apps have around 10 million UK customers, which is around 19% of the population each.
Banking apps have helped challenge the established status quo of banks within the UK, providing helpful features such as real-time transaction alerts and spending insights. These are incredibly helpful for consumers who want to track their habits and manage their money better.
Mobile banking services also offer instant transfers, making them more convenient compared to traditional banks. A growing number of online and in-person transactions are performed by mobile banking services such as Monzo and Revolut.
The future of payments in the UK
So what does the future of payments look like in the UK? While there has been a shift towards services such as digital wallets and mobile banking apps, other payment methods are trending upwards too.
Buy now pay later services such as Klarna are making online shopping easier for many consumers, allowing them to spread the cost over multiple payments. While these aren’t always available, they’re growing in acceptance at major retailers and brands.
In addition, cryptocurrencies such as Bitcoin and Ethereum have seen an increase in use by UK businesses. In 2023, the HM Treasury and Bank of England announced plans to launch the digital pound, which would function as a stablecoin, tethered to the value of pound sterling.
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