United Kingdom Payment Market Size
| Study Period | 2018 - 2028 |
| Base Year For Estimation | 2022 |
| Forecast Data Period | 2023 - 2028 |
| Historical Data Period | 2018 - 2021 |
| CAGR | 12.56 % |
| Market Concentration | High |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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United Kingdom Payment Market Analysis
The United Kingdom Payment Market is anticipated to register a CAGR of 12.56% over the forecast period. The payment services in 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.
- As per the changes in customer behavior, buying trends, and needs, the payments market in the United Kingdom is witnessing significant changes. A few trends influencing the payments market in the United Kingdom are cashless economies, mobile banking, instant payments, digital commerce, and the growing impact of regulatory agencies. 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 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. 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.
- The market is witnessing mergers, acquisitions, and investments by key players as part of its strategy to improve business and their presence to reach customers and meet their requirements for various applications. For instance, In July 2022, British bank Virgin Money declared the launch of a new credit card that would enable customers to spread their payments over several months, entering the increasingly competitive buy now, pay later (BNPL) space. Also, in May 2022, Swedish buy now, pay later (BNPL) firm Treyd raised a sum of around USD 10.5 million in a Series A round. The funding would help the company expand to the U.K. and operate out of Stockholm and London.
- However, the lack of a standard legislative policy remains, especially in the case of cross-border transactions could be a major matter of concern that can limit the overall market's growth throughout the forecast period.
- The pandemic boosted the adoption of contactless payments in the U.K. With the closure of physical stores during lockdowns, consumers turned to online shopping, driving a significant increase in e-commerce transactions. This led to an increase in online payment volumes and a rise in the use of digital payment methods. Also, it has driven innovation in the payment industry, with new payment technologies and solutions being developed to meet the changing needs of consumers and businesses.
United Kingdom Payment Market Trends
Card Payments to Witness Significant Growth
- Debit and Credit cards are one of the primary payment methods used within the country. As per payments, card payments now account for nearly 90% of all retail transactions in the U.K. According to the findings from the British Retail Consortium's (BRC) 2022 Payments Survey, it has revealed that debit cards have continued to gain ground as the preferred payment method in the U.K., accounting for 67.28% of all retail transactions in 2021.
- Moreover, the market is witnessing various significant product launches, mergers, acquisitions, and investments by key players as part of its business strategy to improve its presence to reach customers and meet their requirements for various applications. For instance, in November 2022, IDEX Biometrics ASA initiated a biometric payment card program with a U.K. issuer and processor of EMV1-compliant payment cards. This issuer is a well-established provider of B2B solutions with a robust portfolio of fintechs and banks across the U.K., North America, and Europe.
- Also, in March 2022, Mastercard introduced a new business-to-business (B2B) payment solution in the U.K. - Mastercard Track Card to Account Transfer - which enables businesses to use their commercial card program to make payments to any kind of supplier, regardless of whether the supplier accepts card payments. The new solution can help businesses eliminate manual work, manage cash flow, and expand payment options since the suppliers receive card payments from buyers directly in their bank accounts. Mastercard issuers would thus be able to offer the solution to their corporate and business customers.
- According to U.K. Finance, as of July 2021, there were approximately 52.24 million credit card accounts in the U.K., whereas as of July 2022, there was approximately 53.12 million credit card accounts in the U.K., representing a steady increase in the overall count of credit card accounts. This rise in the overall number of credit card accounts within the country will provide the market with various growth opportunities throughout the forecast period.
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E-commerce and Rising Adoption of M-commerce is Expected to Drive the Payments Market
- In the age of the internet, and during a time when smartphone usage is reaching all-time highs, mobile commerce has gained traction and thus changed dynamics within e-commerce along the way. As per the Office for National Statistics (UK), as of December 2022, total internet sales accounted for almost 25% of all retail sales in Great Britain.
- The government regulations during the COVID-19 pandemic led to the shutdown of many industries worldwide. The major shutdown compelled 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.
- 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.
- 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.
- As per Airnow, as of September 2022, the leading shopping app in the Google Play Store in Great Britain (GB) was ASDA Rewards, with over 520 thousand downloads in the examined period. Vinted ranked second, with roughly 258 thousand downloads by Google Play users in Great Britain. Hence, with the rise in the total number of downloads of shopping apps in the Google Play Store in Great Britain, the market is expected to witness considerable growth opportunities throughout the forecast period.
United Kingdom Payment Industry Overview
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 November 2022, a new private sector-led body was launched in the United Kingdom to nurture the country's FinTech ecosystem. The Center for Finance, Innovation, and Technology (CFIT) announced that Charlotte Crosswell, who would soon be stepping down as chair of the Open Banking Implementation Entity (OBIE), would lead the new organization beginning January 2023. The center would bring together experts in finance and technology from across the UK to support FinTech businesses and foster innovation in the sector.
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.
United Kingdom Payment Market Leaders
PayPal Payments Private Limited
Stripe, Inc.
Worldpay, Inc.
Amazon Payments, Inc
Mastercard, Inc.
*Disclaimer: Major Players sorted in no particular order
United Kingdom Payment Market News
- February 2023: International payment provider ECOMMPAY launched a new BNPL payment solution for UK travel companies amid calls for tighter rules in the BNPL sector. Built with the company's proprietary technology, the new payment solution promises 24/7 customer support with a robust risk scoring system tailored to an individual's travel circumstances, offering higher credit limits for specific travel needs and credit return limits to protect booking agencies and travel agents.
- December 2022: Paysend, the UK-based fintech, launched a new Open Banking Payment Initiation partnership with Plaid, an open banking network that powers digital finance. Through the partnership, Paysend would provide an additional security solution for its business customers to receive payments, helping to improve their checkout conversion rates, reduce transaction processing fees and enhance their anti-fraud capabilities.
UK Payment Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definitions
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Stakeholder Analysis
4.3 Industry Attractiveness-Porter's Five Forces Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Bargaining Power of Buyers/Consumers
4.3.3 Threat of New Entrants
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
4.4 Evolution of the payments landscape in the country
4.5 Key market trends pertaining to the growth of cashless transaction in the country
4.6 Impact of COVID-19 on the payments market in the country
5. MARKET DYNAMICS
5.1 Market Drivers
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
5.1.2 Enablement Programs by Key Retailers and Government encouraging digitization of the market
5.1.3 Growth of Real-time Payments, especially Buy Now Pay Later in the country
5.2 Market Challenges
5.2.1 Lack of a standard legislative policy remains especially in the case of cross-border transactions
5.3 Market Opportunities
5.3.1 Move towards Cashless Society
5.3.2 New Entrants to Drive Innovation Leading to Higher Adoption
5.4 Key Regulations and Standards in the Digital Payments Industry
5.5 Analysis of major case studies and use-cases
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.)
5.7 Analysis of the increasing emphasis on customer satisfaction and convergence of global trends in the United Kingdom
5.8 Analysis of cash displacement and rise of contactless payment modes in the United Kingdom
6. Market Segmentation
6.1 By Mode of Payment
6.1.1 Point of Sale
6.1.1.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
6.1.1.2 Digital Wallet (includes Mobile Wallets)
6.1.1.3 Cash
6.1.1.4 Others
6.1.2 Online Sale
6.1.2.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
6.1.2.2 Digital Wallet (includes Mobile Wallets)
6.1.2.3 Others (includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)
6.2 By End-user Industry
6.2.1 Retail
6.2.2 Entertainment
6.2.3 Healthcare
6.2.4 Hospitality
6.2.5 Other End-user Industries
7. Competitive Landscape
7.1 Company Profiles
7.1.1 PayPal Payments Private Limited
7.1.2 Stripe, Inc.
7.1.3 Worldpay, Inc.
7.1.4 Amazon Payments, Inc
7.1.5 Mastercard, Inc.
7.1.6 PayPoint plc.
7.1.7 2Checkout.com, Inc.
7.1.8 Visa, Inc
7.1.9 Klarna Inc.
7.1.10 SumUp Inc.
- *List Not Exhaustive
8. Investment Analysis
9. Future Outlook of the Market
United Kingdom Payment Industry Segmentation
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).
The market sizes and forecasts are provided in terms of value (USD million) for all the above segments.
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UK Payment Market Research FAQs
What is the current United Kingdom Payment Market size?
The United Kingdom Payment Market is projected to register a CAGR of 12.56% during the forecast period (2023-2028).
Who are the key players in United Kingdom Payment Market?
PayPal Payments Private Limited, Stripe, Inc., Worldpay, Inc., Amazon Payments, Inc and Mastercard, Inc. are the major companies operating in the United Kingdom Payment Market.
United Kingdom Payment Industry Report
Statistics for the 2023 United Kingdom Payment market share, size and revenue growth rate, created by Mordor Intelligenceā¢ Industry Reports. United Kingdom Payment analysis includes a market forecast outlook to for 2023 to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.
United Kingdom Payment Report Snapshots
