UK Retail Payment Options Market Report 2021
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Providing the most comprehensive and up-to-date information and analysis of the UK Retail Payment Options market, including the behaviours, preferences and habits of the consumer.
61% of consumers used cash less, or stopped using it entirely, as a result of the COVID-19 pandemic, while just a third expect to increase the amount they use cash once pandemic restrictions are lifted.
COVID-19 has transformed the way we pay. The enormity of the event had a habit-busting effect on consumers who abandoned cash and adopted contactless alternatives. The raising of the contactless limit to £45 led to a surge in use, while the rapid growth in ecommerce accelerated interest in the BNPL space and other online payment options.
As pandemic restriction ease some consumers will return to pre-pandemic spending behaviours. Cash is likely to see a small uptick in use along with wider transactions – 27% of 18-24s say it is their preferred way to pay in bars and restaurants. However, the pandemic has changed the future direction of payments and the online retailing market is only going to grow further in years to come. Having embraced alternative payment methods, many have found these alternatives provide a much better solution to their needs and have little interest in going back.
Debit cards dominate the payments landscape, having overtaken cash payments in 2017. However, debit card use declined in absolute terms during 2020. By contrast, the number of payments going through the Faster Payments service surged 21%. As the availability of Open Banking payments increases, Faster Payments will take a greater share of payments. Indeed, Faster Payments have the potential to erode the current dominance of debit cards by offering a simpler, cheaper and faster way to send money directly between bank accounts.
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Brands: PayPal, Barclays, Amazon, John Lewis, Ikea, Klarna, LayBuy, Zilch, Bitcoin, Visa, Mastercard, Curve Credit, HSBC, Mode, Tomato Pay, American Express, GoCardless, Google Pay.
Written by Thomas Slide, a leading analyst in the Food & Drink sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.
It has been a transformative year for the payments sector with the pandemic acting as a catalyst to regulatory, technological and behavioural change. Cash use has plummeted, contactless payments have surged, and consumers have made use of ‘buy now, pay later’ (BNPL) as shopping moved online. While cards now dominate the payment experience, innovations in Open Banking technology helped grow Faster Payments far more rapidly and this could prove a threat to the humble debit card in the future.”
Thomas Slide
Associate Director – Financial Services
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