Payment Trends in the UK
Payment modes have drastically evolved over the decades and tend to evolve slowly over time. However, in the last couple of years, payment modes have seen a significant change due to the COVID-19 pandemic. Significant changes in payment modes and patterns in the UK and Germany have been observed during the pandemic as many businesses shut down and halted operations and associated lockdowns in the UK and Germany. Moreover, with an increase in the work-from-home culture in many parts of the country, the spending and expenditure on travel and the city center have significantly reduced, which has resulted in a substantial fall in the number of payments made in the UK and Germany. However, as the economy reopened at the outset of 2020 and in 2021, the total number of payments gained pre-pandemic levels.
Major payment trends in the UK
Total payment volume in the UK stood at 40,352 million in 2021 which is forecast to reach 46,273 million by 2031, market report by RationalStat
- In 2021, 57% of all payments in the UK were made using cards.
- Debit cards are the most frequently used payment method responsible for 48% of all payments made in the UK.
- 97% of the population hold a debit card and the majority of people use them to make payments in 2021.
- Debit cards reached a total of 19.5 billion payments in 2021.
- Credit cards penetration among adults stands at nearly two-thirds (67%) in the UK.
- Nearly 3.5 billion payments were made using credit cards in 2021.
- By 2031, credit card payment volumes are forecast to reach 4.2 billion payments.
- Contactless payments have gained rapid traction in recent years and increased by 36% compared with 2020, to reach 13.1 billion payments in 2021.
- In 2021, 32% of all the payments made via contactless cards.
- At the end of 2021 there were 142 million contactless cards in circulation, with 91% of debit cards and 89% of credit/charge cards in the UK having contactless functionality.
- One-third of the adult population have at least one mobile payments service in 2021. Of these, 92% of people used the services to make payments during the year and 70% of these registered users made payments every month.
- Around 13% of the population used Buy Now Pay Later (BNPL) in 2021.
Payment Trends in Germany
Germany is the largest economy in Europe and a hefty number of transcastions create a plethora of opportunities for banks and financial companies. As per the RationalStat’s report 2022, cash continues to be the most prominent means of payment in Germany, although cashless payments are increasing their share. Cash payments account for 55% of the regional transcatsions, followed by cards and e-payment methods with 40% market share. Debit cards (primarily the girocard in Germany) were the second most frequently used means of payment, accounting for 23% of the number of transactions and 30% of turnover. However, in 2023, nearly 86% of German consumers paid with cash at the point of sale.
- Debit cards were the second most frequently used payment method, accounting for one-fourth of total transactions and over 30% of turnover.
- Credit cards transactions reached 1,725 million in 2021, with nearly 24 credit cards payments per capita.
- Germany has a significant online audience with nearly 80% of the population making online payments in 2022, this number is expected to reach 82% by the end of 2024.
- Germany has witnessed impressive growth in online commerce. The share of total turnover attributable to online commerce reached over 28% in 2023 from 6% in 2017.
E-commerce Payment Trends in Ireland
In Ireland, cards dominate e-commerce payments, mainly supported by consumer spending by young people, and willingness for cross-border spending that will attract international merchants. GDP growth in Ireland is growing, driven by multinational companies relocating intellectual property assets or patents to the country. Meanwhile, increased consumer spending, particularly among young people, is helping to drive online sales in Ireland.
- E-commerce Merchants and Prevalence of Social Media:
E-commerce merchants in Ireland are embracing the usage of social media, as this is Ireland’s preferred medium for shopping research, inspiration, and information. Consumers in the country believe that social media (42%) is the most influential channel along with individual retailer websites for consumer purchases.
Compared to other well-developed e-commerce markets, Ireland-based consumers are also increasingly engaging in Cyber Monday. The event launched in Ireland in 2007 and has risen in prominence over the past decade to generate an estimated US$ 50 million in sales every year. However, Irish consumers have spent US$ 30 million online during Black Friday, 30% more than on Cyber Monday in 2022, according to a data market report by RationalStat.
Preferred e-commerce methods
|E-commerce completed on a mobile device||US$ 3.2 billion|
|Mobile commerce completed in-app||US$ 1.5 billion|
|Mobile commerce completed on a browser||US$ 1.8 billion|
Growth in E-commerce Market
Shopping via smartphone and smart devices has become a normal trend in Ireland’s e-commerce market, driving 60% of the traffic on Irish websites accounting for nearly 50% of total online sales. E-commerce sales activity has experienced significant growth in the country with online spending estimated to have grown by 35-40% in recent years. According to a market report by RationalStat, the e-commerce market in Ireland is estimated at US$ 4 billion and is expected to reach US$ 8 billion by the end of 2028, primarily influenced by strong household internet access (92%) and smartphone usage (90%).
- Secure Payments Options
Majority of Ireland-based consumers are concerned about security while making online transactions and mobile-based payments. Thus, the need for strong security measures is important when designing and promoting mobile-enabled e-commerce sites for the market. Ireland-based shopping association Retail Excellence, in conjunction with EU partners Ecommerce Europe, launched the first Irish e-Commerce Trustmark in 2016.
Co-founder and Director at RationalStat
Ujjwal is a thought leader and recognized expert in the market research and consulting field. He is the co-founder at RationalStat, a leading global market research & procurement intelligence firm with 10+ years of industry expertise.