United Kingdom Payment Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The United Kingdom Payment Market is Segmented by Mode of Payment (Point of Sale (Card Payments, Digital Wallet, Cash), Online Sale (Card Payments, Digital Wallet)), and by End-user Industries (Retail, Entertainment, Healthcare, Hospitality).

Market Snapshot

united kingdom payment market
Study Period: 2020-2027
Base Year: 2021
CAGR: 12.56 %

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Market Overview

The United Kingdom Payment Market is expected to grow at a CAGR of 12.56% over the forecast period (2022 - 2027). The payment services worldwide, including the United Kingdom, are rapidly shifting towards adopting digital payment applications, such as Paypal, Samsung Pay, Mastercard, American Express, and Shopify, to accept and transfer payments. With factors like increasing internet penetration and rapid growth in online retailing, this trend is expected to continue over the forecast period.

  • The payments market is transforming according to customer behavior. A few trends influencing the payments market are cashless economies, mobile banking, instant payments, digital commerce, and the growing impact of regulatory agencies.
  • The payment market in the United Kingdom has recorded strong evolution, with new providers, platforms, and payment tools being introduced in the region. The increased usage of the internet and smartphone penetration in the region is anticipated to drive the digital payments market in the studied country significantly.
  • Moreover, increased awareness of electronic payments and continuously developing evolving payment infrastructure have successfully facilitated using electronic payment methods for day-to-day transactions.
  • The digital gift card segment is another fast-growing vertical globally. As the demand for gift cards continues to rise quarter-on-quarter, BNPL firms are looking to capitalize on the opportunity to further accelerate their growth in the United Kingdom.
  • For instance, In December 2021, Zilch, the United Kingdom-based BNPL provider, announced the launch of its gift card program for consumers. Notably, the firm will allow its 1.4 million users to shop for multi-use digital gift cards directly from the BNPL platform. With global gift card sales expected to grow nearly 8.3% year-over-year, the launch of gift cards will allow the firm to further boost its growth over the next four to eight quarters.
  • During the COVID-19 pandemic, the UK government announced various stimulus packages created to boost the economy. The stimulus packages include measures for young individuals' employment, green investments, and supporting employees who lost their jobs. In March 2021, the UK government introduced a new COVID-19 package in its 2021 budget amounting to USD 90 billion. Meanwhile, the layoff program was extended until September 30, 2021.

Scope of the Report

Payment is the transfer of money and goods in exchange for goods and services that the parties agree upon. Payment can be made through services exchanged, cash, wire transfer, cheque, credit card, and debit card.

The United Kingdom Payment Market is Segmented by Mode of Payment (Point of Sale (Card Payments, Digital Wallet, Cash), Online Sale (Card Payments, Digital Wallet)), and by End-user Industries (Retail, Entertainment, Healthcare, Hospitality).

By Mode of Payment
Point of Sale
Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
Digital Wallet (includes Mobile Wallets)
Cash
Others
Online Sale
Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
Digital Wallet (includes Mobile Wallets)
Others (includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)
By End-user Industry
Retail
Entertainment
Healthcare
Hospitality
Other End-user Industries

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Key Market Trends

Significant Growth in Payment is Expected due to Digital Transformation

  • According to the Department for Digital, Culture, Media & Sport, the G7 Digital and Technology Ministerial Declaration strengthened the UK’s support for industry-led, inclusive, multi-stakeholder strategies to set technical standards. The G7 Presidency includes the UK-led agreement on several emphases to use technology for better post-pandemic growth. The UK is expected to host the Future Tech Forum in 2021.
  • A UK-India Strategic Tech Dialogue, agreed in principle by Prime Minister Johnson and Prime Minister Modi on 4 May 2021, will provide an overarching framework for implementing the UK-India Joint Declaration of Intent on Digital and Technology.
  • Debit and Credit cards are the primary payment method in the country. According to the Bank of England, a debit card is significantly used in the UK, and the popularity of debit cards has replaced cash in recent years.
  • Moreover, the growth of mobile shopping in the country is gradually increasing the usage of eWallets. eWallet utilization is growing at twice the speed of cards, with PayPal leading the way. The adoption of eWallets in the UK is expected to accelerate even more as online shoppers prefer cross-border shopping with the rest of Europe.
  • According to Tech UK, the country witnessed substantial growth in 2021, with the economy growing by 7.5%. Prediction suggests that the country has the potential to develop a further three million new technology jobs by 2025.
united kingdom payment market size

E-commerce and Rising Adoption of M-commerce is Expected to Drive the Payments Market

  • The government regulations during the Covid -19 pandemic led to the shutdown of many industries worldwide. The major shutdown compelled the customers to switch to e-commerce websites for shopping, and retailing, which increased the usage of the Buy Now Pay Later payment option. According to Worldpay, Buy Now Pay Later (BNPL) is expected to nearly double its share of e-com payments, from 6.2% in 2021 to 12.1% by 2025.
  • According to International Trade Administration, Online shopping in the United Kingdom is more popular than in other countries. E-commerce consumers are witnessed to be 36% of the total retail market.
  • Many players seek to establish regional acquisitions and mergers to promote the payments market. For instance, In May 2022, a British e-commerce aggregator, Olsam, announced the acquisition of a US-based MarketFleet. Olam acquired Amazon sellers and used its platform’s data, operational expertise, and technology to drive revenue and profit growth. With the capital raised in 2021, the company acquired another aggregator named Flywheel Commerce.
 united kingdom payment market forecast

Competitive Landscape

The United Kingdom payments market appears to be fragmented owing to the availability of the large number of players intensifying the competition. Major players in the United Kingdom payments market are adopting acquisitions and partnerships to expand their reach to more regional consumers. Some major payment market companies are Paypal, Stripe, Amazon Pay, Mastercard Inc., and Sage pay.

  • In June 2022, Stripe announced the launch of delegated authentication to enhance European payment facilities. The delegated authentication feature allows Strong Customer Authentication and SCA-compliant transactions without customers being redirected to a banking app or having to enter a one-time passcode.
  • In September 2021, PayPal UK launched a new digital wallet for its users in the United Kingdom, which has an added charity function. Through this app, users get an option to create customized community fundraising campaigns.

Recent Developments

  • In December 2021, PollenPay, the British BNPL startup, announced the launch of its deferred payment services for consumers in the country. Unlike other BNPL firms, PollenPay offers consumers a responsible approach to BNPL transactions. It allows consumers to amend payment schedules if they fall into financial hardship. According to PollenPay, the new BNPL scheme has gained interest from various retailers across the country.
  • In June 2021, Blackhawk Network, a global leader in branded payments, partnered with Iceland Food to launch Iceland's gift card program in the United Kingdom.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definitions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Stakeholder Analysis

    3. 4.3 Industry Attractiveness-Porter's Five Forces Analysis

      1. 4.3.1 Bargaining Power of Suppliers

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

    4. 4.4 Evolution of the payments landscape in the country

    5. 4.5 Key market trends pertaining to the growth of cashless transaction in the country

    6. 4.6 Impact of COVID-19 on the payments market in the country

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 High Proliferation of E-commerce, including the rise of m-commerce and cross-border e-commerce supported by the increase in purchasing power

      2. 5.1.2 Enablement Programs by Key Retailers and Government encouraging digitization of the market

      3. 5.1.3 Growth of Real-time Payments, especially Buy Now Pay Later in the country

    2. 5.2 Market Challenges

      1. 5.2.1 Lack of a standard legislative policy remains especially in the case of cross-border transactions

    3. 5.3 Market Opportunities

      1. 5.3.1 Move towards Cashless Society

      2. 5.3.2 New Entrants to Drive Innovation Leading to Higher Adoption

    4. 5.4 Key Regulations and Standards in the Digital Payments Industry

    5. 5.5 Analysis of major case studies and use-cases

    6. 5.6 Analysis of key demographic trends and patterns related to payments industry in the United Kingdom (Coverage to include Population, Internet Penetration, Banking Penetration/Unbanking Population, Age & Income etc.)

    7. 5.7 Analysis of the increasing emphasis on customer satisfaction and convergence of global trends in the United Kingdom

    8. 5.8 Analysis of cash displacement and rise of contactless payment modes in the United Kingdom

  6. 6. Market Segmentation

    1. 6.1 By Mode of Payment

      1. 6.1.1 Point of Sale

        1. 6.1.1.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)

        2. 6.1.1.2 Digital Wallet (includes Mobile Wallets)

        3. 6.1.1.3 Cash

        4. 6.1.1.4 Others

      2. 6.1.2 Online Sale

        1. 6.1.2.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)

        2. 6.1.2.2 Digital Wallet (includes Mobile Wallets)

        3. 6.1.2.3 Others (includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)

    2. 6.2 By End-user Industry

      1. 6.2.1 Retail

      2. 6.2.2 Entertainment

      3. 6.2.3 Healthcare

      4. 6.2.4 Hospitality

      5. 6.2.5 Other End-user Industries

  7. 7. Competitive Landscape

    1. 7.1 Company Profiles

      1. 7.1.1 PayPal Payments Private Limited

      2. 7.1.2 Stripe, Inc.

      3. 7.1.3 Worldpay, Inc.

      4. 7.1.4 Amazon Payments, Inc

      5. 7.1.5 Mastercard, Inc.

      6. 7.1.6 PayPoint plc.

      7. 7.1.7 2Checkout.com, Inc.

      8. 7.1.8 Visa, Inc

      9. 7.1.9 Klarna Inc.

      10. 7.1.10 SumUp Inc.

    2. *List Not Exhaustive
  8. 8. Investment Analysis

  9. 9. Future Outlook of the Market

**Subject to Availability

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Frequently Asked Questions

The United Kingdom Payment Market market is studied from 2020 - 2027.

The United Kingdom Payment Market is growing at a CAGR of 12.56% over the next 5 years.

PayPal Payments Private Limited, Stripe, Inc., Worldpay, Inc., Amazon Payments, Inc, Mastercard, Inc. are the major companies operating in United Kingdom Payment Market .

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