UK Consumers Are Shifting to Mobile Payments

Simply tapping your phone to make a payment is becoming a habit, not a fad. Half of UK consumers now routinely use mobile payments like Apple Pay and Google Pay, according to new banking data. Digital wallets are transforming how people shop, travel, and manage money for everyone from young adults to older adults, but also pose significant questions about the future of currency. UK Consumers Are Shifting to Mobile Payments, with more people choosing smartphones for quick, secure, and contactless transactions in everyday life.

Half of UK Adults Now Pay Using Their Phones

For many people in the UK, leaving home with just a phone is becoming commonplace. A significant milestone was reached last year; according to new data from UK Finance, 50% of adults used mobile payments at least once a month, up from 34% in 2023. According to UK Finance’s head of research, Adrian Buckle, this definitely demonstrates a change in customer behavior. Instead of carrying cash or credit cards, people are becoming more comfortable utilizing their phones to make payments using facial recognition, fingerprint scanning, and digital wallets.

Mobile Payments Are Growing Across All Age Groups

Young people are no longer the only ones using mobile payments.

• Last year, nearly 78% of individuals aged 16 to 24 routinely used mobile payments.

• Usage among people ages 35-44 increased from 38% to 59% in the previous year.

• Nearly one in five adults over 65 now frequently use their phones to make payments.

These numbers demonstrate that digital payments are increasingly common across all age groups, not just among tech-savvy young people.

What’s Taking Place with Cash and Cards?

Debit cards remain the most commonly used payment method; however, in-person contactless payments have declined as phone payments have increased. Meanwhile, cash is still going down. Although it now makes up fewer than 10% of all payments, the fact that about 50 million people still use ATMs indicates that cash hasn’t completely vanished.

It’s notable that more people used cash to control spending in 2023, when household finances were tight. As digital payments gained traction last year, that trend eased again.

Concerns About a Cashless Society

Despite the growth of digital payments, advocates caution against hastening the transition to a cashless future. Adrian Roberts of Link, which manages the UK’s ATM network, noted that cash users are often more vulnerable or have lower incomes. They can be left behind if funds are withdrawn too quickly. Concerns concerning resiliency also exist. A fully digital payment system may not function properly during power failures or network interruptions.

Is It Possible to Require Stores to Accept Cash?

Policymakers have taken notice of the problem. To safeguard those who rely on cash, MPs on the Treasury Committee have proposed that businesses and services may someday be required to accept it. The UK’s financial regulator has suggested allowing banks and card companies to set their own contactless limits or even removing the existing £100 cap. Entering a PIN may soon become even less common, as smartphones now have no contactless limit due to additional security features.

Conclusion 

In the UK, payment practices are rapidly evolving. Due to their speed and ease, mobile payments are quickly becoming the standard for all age groups. However, crucial discussions about inclusivity, resilience, and the role of cash persist as digital wallets gain traction. Even though digital payments are the way of the future, balance is still important in the meantime.

FAQ

1. What is the reason behind the growing popularity of mobile payments in the UK?

Mobile payments are quick, easy, and safe. Instead of using cash or PINs, people feel more at ease carrying just their phone and utilizing capabilities like fingerprint or facial recognition.

2. Does the UK still use cash?

Indeed, cash is still used, particularly by low-income individuals and vulnerable groups. Millions of people still rely on ATMs even though they currently make up less than 10% of payments.

3. Are young people the only ones that use mobile payments?

No. Even though younger folks use mobile payments the most, older age groups are also utilizing them more frequently, indicating that digital payments are becoming commonplace for people of all ages.

Written by [Ketan Borada / British Portal Team] – Founder of British Portal, dedicated to providing accurate and up-to-date information on UK public services and benefits.