New research from FreedomPay and Retail Economics shows that the UK is on the brink of a digital payments transformation, with digital wallet purchases set to surpass card transactions within 10 years.
In the next five years, the value of digital wallet use is set to surge by 76.3% – well ahead of other payment methods including transactions through loyalty points and Buy Now Pay Later (BNPL) services, while more traditional payment methods of cash and card are predicted to decline.
In the next five years, the emerging connected shopper will expect seamless omnichannel experiences and place increasing value on integrated loyalty schemes and personalised offers – with almost a third (31.7%) wanting both features in the future – as well as BNPL options.
However, digital wallets risk excluding some of the most vulnerable. One in six respondents stated they have no intentions of using digital wallets over the next five years – half of these customers are in the bottom two affluence groups, aged over 55, with a quarter having no (or unreliable) mobile data access when shopping.
FreedomPay president, Chris Kronenthal, said: “This research is a clear indication that the world of payments is changing rapidly, and the merchant needs to adapt to meet the needs of the evolving payment tech landscape.
“It’s no surprise that physical forms of payments such as cash and plastic will be surpassed by digital wallets in the years to come, and it’s imperative that businesses re-evaluate their commerce capabilities.”
Retail Economics chief executive, Richard Lim, said: “Digital wallets are poised to become the primary mode of payments, eclipsing the use of physical cards and cash.
“Shoppers love the convenience they offer, helping to provide a more seamless journey that blends physical and digital together while incorporating the benefits of more personalised offers and loyalty schemes.”
