UK consumers are increasingly embracing digital financial services, leading the charge towards a cashless society, according to the 2024 State of Payments Report by Marqeta, a global modern card issuing platform. The report, which surveyed 4,000 consumers across the UK, US, and Australia, including over 1,000 in the UK, highlights the UK’s significant progress in adopting contactless payments and other digital banking innovations.
In the past week, 80% of UK respondents reported using contactless payments, nearly double the 46% reported by their US counterparts. This marks a significant shift as UK consumers grow more comfortable with the idea of a cashless society. Half of those surveyed in the UK confirmed that their use of cash has decreased over the past year, a stark contrast to the 31% of US respondents who reported a similar trend.
The survey also reveals a growing comfort among UK consumers with digital wallets, as nearly three-quarters (74%) automatically add new cards to their mobile wallets. Additionally, 40% reported using a mobile wallet in the last week, and over two-thirds (68%) now feel confident enough to leave their physical wallets at home, underscoring the nation’s increasing reliance on digital payments.
However, while digital payments are advancing rapidly, the UK’s payment infrastructure has not kept pace with consumer demand for faster transactions. Despite 88% of UK respondents agreeing that earlier access to wages would improve their financial well-being, 82% still only receive their pay at the end of the month. This delay is particularly challenging for the 36% of respondents who rely on credit between paychecks and the 76% who live paycheck-to-paycheck.
Marcin Glogowski, SVP, Managing Director Europe, and UK CEO at Marqeta, commented on the findings: “There is intense competition in payments, with significant pressure on providers to innovate. UK consumers are eager to explore new payment and banking options, including those from non-financial services companies. This presents a substantial opportunity for brands that can meet evolving consumer preferences for how they want to pay and be paid.”
Despite the rapid adoption of digital payments, UK consumers have been slower to fully embrace digital banking. Over half (53%) of those surveyed have remained loyal to the same bank for a decade or more. However, the winds of change are evident, as 20% of UK respondents expressed a willingness to switch entirely to a digital-only bank, and 39% would consider using financial services from non-traditional providers. Trust remains a crucial factor in these decisions, with 52% citing it as a primary reason for choosing a non-financial services provider.
As embedded finance solutions gain traction and non-traditional providers become more established, the landscape of banking and payments in the UK is poised for further transformation.