Although digital wallets were first introduced in the late 1990s, the Covid-19 outbreak served as a catalyst for their widespread use, with services like Apple Pay and Google Pay quickly becoming the preferred method of payment for Britons, according to Worldpay.

Digital wallets are predicted to be valued £203.5 billion by 2027, accounting for half of all UK e-commerce spending. Additionally, projections indicate that throughout the next three years, digital wallet usage at UK point-of-sale would more than quadruple, from 14% to 29% of transaction value.

"The combined effect of the pandemic, along with digital wallet technology reaching a level of maturity and implementation in recent years has driven a monumental rise in adoption both globally and locally in the UK," says Pete Wickes, General Manager of Emea, Worldpay.

"Whether purchasing in-store or online, digital wallets offer a great deal of convenience and ease of use that cannot be disputed. Based on this, businesses now have a great chance to expand the range of payment options they offer in order to better serve their clientele."

However, the strong ties that Britons have to conventional payment methods—credit and debit cards, which 69% of users use to fund their wallets—underlie the UK's embrace of digital wallets.

Outside of digital wallets, credit and debit card usage is still very high; in 2023, they will make up 46% of e-commerce and 74% of the value of point-of-sale transactions.

Account-to-account (A2A) payments, on the other hand, have taken a while to catch on. In 2023, for instance, A2A only made up 7% of the value of e-commerce transactions in the UK—the lowest adoption rate in Europe—behind Poland (68%), the Netherlands (64%) and Finland (33%).

According to Worldpay, a notable distinction between these economies and the UK is the presence of government-backed programs aimed at fostering trust and acceptance, as well as aiding in the advancement of infrastructure such as real-time payment systems.

In the meantime, Buy Now, Pay Later made up 7% of the value of e-commerce transactions in 2023 and is predicted to increase at a CAGR of 4% through 2027. 10% of POS transaction value was made up of cash in 2023; by 2027, that percentage is predicted to fall to 6%.