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UK consumers embrace Alternative Payment Methods

UK consumers embrace Alternative Payment Methods

UK consumers are embracing alternative payment offerings including digital wallets as they look to better manage their finances amidst the cost of living crisis, according to the Global Payments Report 2023.

Findings from the 2023 report show that global consumers are switching to Alternative Payment Methods (APMs) as they look for more choice, convenience and control at the checkout.

In the UK, digital wallets are the leading payment method among consumers shopping online, accounting for 35% of e-commerce transaction value in 2022, while they increased their share of POS transaction value to 10% in 2022.

With consumers looking to better manage their finances as costs bite, buy now pay later (BNPL) increased its share of e-commerce transaction value to account for 8% of e-commerce spend in 2022, up 33% YoY from 2021.

Account-to-account payments (A2A) are also on the rise in the UK, accounting for 9% of e-commerce transaction value in 2022, up from 8% in 2021.

Alternative payment methods are also gaining e-commerce share across Europe, but when compared to the UK, payment methods vary greatly.

While the UK leads the region in digital wallet share, it is behind in A2A adoption. A2A payments in both Poland (67% e-commerce transaction value) and the Netherlands (62% e-commerce transaction value) have a much larger market share.

In Sweden, BNPL is the leading country payment method with 24% of e-commerce transaction value, while in Turkey, credit cards account for 53% e-commerce transaction value.

UK Payment Trends:
  • Digital wallets are the leading payment method among UK consumers shopping online, accounting for 35% of e-commerce transaction value in 2022, up from 32% in 2021.
  • BNPL accounted for 8% of e-commerce spend in 2022, up from 6% in 2021. Although card spend still dominates, the 33% year-on-year growth of BNPL demonstrates that it has gained significant traction as a payment method.
  • Account-to-account payments increased their share of e-commerce transaction value, rising to 9 percent in 2022, up form 8% in 2021.
  • The UK E-commerce market was worth $319billion in 2022.
  • When shopping in-store, UK consumers prefer to pay with cards. Debit cards (47%) and credit cards (29%) both increased their share from 2021 to comprise of more than three-quarters of transaction value in 2022.
  • The use of digital wallets has risen in-store, increasing their share of POS spend to 10% in 2022, and it is projected that they will account for 21% market share in 2026.
  • The rate of cash use continues to decline in the UK, having fallen by more than half since prior to the pandemic, from 21% of point of sale (POS) transaction value in 2019 to 10% in 2022.

 

The post UK consumers embrace Alternative Payment Methods appeared first on Payments Cards & Mobile.

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