UK digital wallet transactions across retail, leisure and hospitality are set to rise to £210 billion by 2033, while cash usage halves, according to research from FreedomPay and Retail Economics, supported by a UK consumer survey across 2,000 households.
The nearly £138 billion shift to digital wallets over the next decade comes as 46.3% of shoppers look for easier payments, 27.3% want integrated loyalty schemes and 26% seek buy now, pay later options in future digital wallets – while retailers look to unlock new levels of personalisation across channels, putting smartphones at the heart.
However, not all Brits are equipped for this shift, with one in five reporting that they don’t trust using smartphones and wearable devices to pay for goods and services.
A key barrier to widespread adoption is the sizeable knowledge gap, as 49% of UK shoppers say they understand how digital wallets work.
How can #digitalwallets increase competitive advantage, #market share, and stimulate overall #growth? @freedompay and @RetailEconomics analyze, quantify, and forecast #payment methods’ trajectory across #UK #Retail, #Hospitality and #Leisure
Download: https://t.co/C0iDlyVwX0 pic.twitter.com/KNFXj4dS3O
— FreedomPay (@freedompay) October 19, 2023
The research shows that trust in digital wallets varies between different age demographics.
A fifth of those aged under 35 stated that they trust BNPL providers and smartphone manufacturers to store their payment details in a digital wallet, compared to just 6.5% and 8.7% respectively among the over 55s, who predominantly remain faithful to cards and cash.
Although the older respondents represent a relatively small cohort of shoppers, there is arguably a social responsibility for providers to build trust and bridge knowledge gaps regarding digital wallet use to help avoid potential financial exclusion of this demographic.
FreedomPay President, Chris Kronenthal, says: “This report clearly shows that the future is digital and it’s just a matter of time before mass adoption of digital payments and embracing of the power of data is here.”
“Every merchant has a huge opportunity to invest in omnichannel and create a much smarter flexible payments technology to get ahead of the change curve, enabling them to scale, grow and create jobs for the future.”
Retail Economics Chief Executive, Richard Lim, says: “As we stand on the cusp of a transformative era for payments, it’s vital to acknowledge both the incredible promise and the inherent challenges digital wallets present.”
“These technologies are not just a payment mechanism, they’re an integrated part of the retail experience that can offer unprecedented levels of personalisation and convenience.”
“However, they also surface critical questions around trust and inclusivity. We must ensure this technology serves all consumers, not just the digitally savvy or the financially well off. The industry has a duty to educate their customers along the way to ensure trust is built as these new payment solutions become more widespread.”
View Original Article
