Raynor de Best
Research expert covering finance, insurance & real-estate, internet & e-commerce
Get in touch with us nowDigital payments refer to any form of cashless payment, or payments conducted without banknotes or coins, in an online or offline environment. Such payments can include mobile payments - digital payments performed with a mobile device - but also relatively new trends like buy now, pay later (BNPL), cryptocurrency, or instant (real-time) payments. Out of all these digital options, which developments are noteworthy to know about for the UK?
Will wallets take over cards as the leading payment method?
Younger people in the UK were more interested in Apple Pay, Google Pay, and Samsung Pay than older consumers. Over half of the UK population ages 16 to 24 had a mobile payment registration. Domestic payment association UK Finance expects older age groups will catch up with mobile payment adoption over the next 10 years. Whether this means they will replace cards remains to be seen. The number of credit cards in use in the UK was predicted to decline between 2022 and 2028, albeit by only 20,000 cards. Debit cards, however, are forecast to follow a different path altogether: Debit cards in use in the United Kingdom are said to increase by 6.4 percent come 2028.Planning for the future of alternative payments
The United Kingdom is working on several fronts to integrate new technologies within its payment landscape. One major initiative is the NPA or New Payments Architecture. This system will replace Faster Payments (FP) and BACS clearing to become a single central payments infrastructure for retail and wholesale around 2030. The United Kingdom already has real-time payments in the form of the Faster Payments scheme, but this serves bank transfers. Another big project in the UK is the research into Central Bank Digital Currency (CBDC). The UK was one of the main countries worldwide to investigate CBDC for use in cross-border interbank payments. Lastly, the UK financial authorities hope to regulate buy now, pay later (BNPL) between 2023 and 2025. Predictions are that seven out of 10 UK merchants will offer BNPL on their website come 2024.
