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Digital wallets replace traditional payments in the UK

PWD Blog Post Digital Wallets

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According to recent Mastercard research, about half (51 per cent) of consumers in the UK believe traditional wallets will become less significant as digital payment methods grow more prevalent.

The research suggests that cash usage is declining in the United Kingdom. According to Mastercard, over 60% of payments were made in cash a decade ago, with UK Finance predicting this percentage will drop to 6% by 2031.

“In contrast to a decade ago, many people who still carry wallets consider them as a personal archive rather than a vehicle for actual cash and cards,” says Kelly Devine, Mastercard’s head of the United Kingdom and Ireland.

“As technology evolves, wallets shrink, and consumers increasingly embrace digital payment, our priority remains on providing people across the country with choice, convenience, and speed.”

The study also shows a rise in the worldwide acceptance of digital payment methods, with 93 per cent of consumers indicating they will consider utilizing alternative payment methods such as contactless, QR code, biometrics, and cryptocurrency transactions in the coming year.

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Scotland’s financial sector to lead UK biometrics efforts

According to a second study, more than a third of Britons (36%) believe biometrics will be commonly used for payments by 2025.

The findings come from a new Accenture research recently reviewed by Stuart Chalmers, Accenture’s head of commercial banking for the UK and Ireland.

Chalmers writes in The Scotsman that 7% of the 36% stated they would be prepared to utilize biometrics.

“We predict that in two years, this will correspond to £95 billion [$113.04 billion] of UK payments switching to biometrics,” he adds.

At the same time, Chalmers warns that growing cost-of-living challenges and strains on household budgets lead customers to choose more traditional payment options to aid with budgeting and debt interest reduction.

To combat these negative aspects and capitalize on emerging technologies such as the metaverse and phenomena such as ‘finfluencers,’ banks must adapt even further.

“There is an opportunity as new payment patterns, ways to connect clients, and sustainability issues arise,” Chalmers says.

“Scotland’s fastest-growing industry is digital technology, and Scotland is the UK’s largest financial centre outside of London, therefore there is scope for Scottish-led enterprises to generate additional economic progress.”

The allegations come only a few months after the Scottish government announced intentions to launch its new digital identification platform early this year.

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PWD Media Owners or its employees are not registered investment advisors and do not provide financial advice. Comments on this page are only an expression of opinion. While we attempt to illustrate the potential benefits of investing in precious metals, remarks, links, or advertising on this website should not be interpreted as advice to purchase or sell a commodity at any time. While PWD Media makes every effort to ensure that all of our comments are genuine and correct, we employ third-party data and rely on our reputable sources’ credibility. Before making any investment decisions, PWD Media suggests you contact a knowledgeable investment advisor.

Securities disclosure.: I, Beat Süess, have no direct investment interests in any of the companies mentioned in this article.

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Latest Update on January 15, 2023

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