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The United Kingdom

Payment methods in the United Kingdom

One of the biggest e-commerce markets in Europe is found in the United Kingdom. Exports and imports are both important and active in the British market. The compounded annual growth rate is expected to be of 9% until 2021. M-commerce should double within the next few years.

Brexit

As the Brits voted in 2016 favorably to the Brexit, the United Kingdom will withdraw from the European Union. It will be interesting to see what impact this will have on the country’s e-commerce. The decision, although not yet implemented, is predicted to have a negative impact on the domestic credit and debit card market through interest rates, increased difficulty to access credit and foreign exchange rates, all provoked by a collapse of the pound sterling. Only a the end of 2017 or in 2018 should this picture becomes clearer, with negotiations between the United Kingdom and the European Union coming to an end.

Growing number of card transactions

The methods customers choose when paying are expected to change drastically in the next few years, especially in everyday transactions. While consumers still tend to pay with cash more often than not, contactless payment is the payment method of the future. Card payments with credit and debit cards make up half (50%) of transactions in the UK that are not done with cash. 90% of British adults own debit cards while 60% own credit cards. On average, there are 19 card payments a month per capita in Britain and this number is expected to grow to 30 payments by 2025, mainly due to growing online transactions.

Contactless technology

Offline retailers are now beginning to accept contactless payments through newly developed technology. This method of payment is especially popular for small purchases. From 2014 to 2015, the popularity of the method tripled, with one billion contactless payment transactions in 2015. Technology developments in near-field communication (NFC) is leading now to mobile payment service possibilities. Customers who use Apple Pay, Android Pay or Samsung Pay no longer need their physical cards. According to Barclaycard, in London, 30% of all transactions below GBP 20.00 were made using contactless cards last year. A trend of cashless stores is gaining popularity in the UK, led by Waitrose and Tossed, where customers can pay only by card.

Mobile payment apps UK

Small and medium enterprises in the United Kingdom are increasingly modernizing their businesses to meet the demands of a growing digitally savvy crowd. As a result, 29% of them now accept payment apps at checkout. Here are two examples of the popular mobile payment apps in the UK.

Vodafone Pay allows users to pay using the SIM card itself. Therefore, payments can be made even when the phone is switched off, or when the NFC function is disabled. The service does not have a transaction limit, while purchases over £30 require a PIN, and can be linked to a Visa, MasterCard or to a PayPal account.

Tesco PayQwiq allows payments in the chain’s store by scanning a QR code at checkout. The company’s reward cards, the Clubcard, can be linked to the app and points are automatically added to the account for every purchase. PayQwiq has a set spending limit of £250.

E-wallet transactions in Great Britain

The number of online transactions through e-wallets - the most popular being PayPal - is high in the UK, at 23%. At POS, mobile wallets were used to pay for 5% of transaction in 2017. Alternative methods of payment such as bank transfers are also gaining popularity.

Neobanks

The popularity of mobile payment is encouraged by a new type of banks entering the British market, neobanks. This entirely mobile, digital banking experience provides a greater transparency on internal operations and the journey of the customer’s money. Introduced in 2013, this trend is only growing stronger, as more and more neobanks are opened.

Compare all Payment Providers

credit-card-alt

Debit card 32%

32

suitcase

E-wallet 23%

23

credit-card

Credit card 18%

18

bank

Bank transfer 9%

9

sign-in

Pay on delivery 7%

7

TOP 5 PAYMENT METHODS

desktop

Desktop 72%

72

mobile

Mobile 28%

28

 

225 Bil. USD

0

E-COMMERCE SALES IN 2017

users

Population: 66 Mil.

66

internet-explorer

Internet Usage: 99%

99

OTHERS

Sources:

Ecommerce News Europe – Ecommerce in the UK
Euromonitor – Financial cards and payments in the UK
The Paypers
Worldpay - Global payments report, Nov 2018