Market Trends of United Kingdom Payment Industry
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.
- Further, according to UK Finance's Payment Markets Report, forecasted debit card payment volumes will increase to over 27 billion by 2032, likely driven by contactless payments, online shopping, and the ever-increasing levels of card acceptance among businesses of all sizes. Such developments are analyzed to positively influence the market growth over the forecast period.
- 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 February 2023, ASOS, the global online fashion firm, and Capital One UK announced a new and exclusive credit card partnership. The partnership will launch a new ASOS credit card for eligible shoppers, available later in 2023. It will provide a range of benefits and features that only come with using a credit card when they shop at ASOS and elsewhere.
- 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.
- 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.
