Transactions across Europe are progressively changing to digital. This year, the documented value of transactions has reached a phenomenal £703.3 bn and BuyShare estimates the United Kingdom is responsible for at least 25% of this figure.
To further highlight the UK’s significant participation in the digital payment industries growth, it helps to see how other European countries compare. In second place, Germany is expected to accumulate $104.3 billion – 38% less than the UK. With France securing third place, with $75.2 billion. Beyond this, Spain and Italy are to achieve around the region of $40 billion.
Mobile POS Payments Increase
Mobile payments, in particular, are responsible for a large section of digital payments made in Britain, accounting for $30.9 billion in 2019.
Digital commerce was initially the most prominently used form of payment, with its value totalling to $123.9 billion. But, in the past years, there has been a shift away from digital commerce to mobile payments as digital commerce payments fell by £5.3 billion this year. In contrast, mobile POS payments rose to $14.8 billion.
In light of the above, it’s not surprising that a Fintech Report explained 81.8% of UK residents used digital payment methods to pay for a service or item online in 2019. With such a high devotion to digital payments, the UK maintains the largest share of digital payments in the world. In consideration of the stats, most Britons are confident and set on using cashless payment methods for transactions.
To find out more about how and why the UK has embraced digital payments, this article covers the undeniable influence of COVID, and the future of payments by looking at reputable digital payment platform PayPal.
COVID Accelerates Digital Payments in the UK
As expected, digital transactions continued to grow during the COVID-19 lockdown. Making purchases online, enabled people in the UK to follow government guidelines to remain indoors and only to leave their homes when necessary. From food shopping to homeware, the UK took full advantage of online shopping.
Furthermore, in-store cashless and contactless payments also increased. Square, for instance, detailed businesses using their payment system increased by 31% in April during the pandemics peak.
Amid the pandemic, alongside customers, businesses decided to enhance their payment methods, and incorporate cashless payment options. Square reported 8% of companies accepted cashless payments at the beginning of 2020, by July this increased to 31%.
As shops and restaurants gradually reopened, life after lockdown has seen a large portion of Brits continuing with payments either online or by phone and with intentions being to reduce the risk of physical contact. With consumers and businesses transitioning to alternative payment methods, some are intrigued by whether the trend will continue now as the impact of the pandemic starts to subside.
According to Felipe Chacon, an Economist at Square, over the years, businesses and customers have steadily moved towards cashless payments. However, the pandemic has accelerated this process.
Businesses have been forced to change in-store and online payment methods to facilitate safer payments. In doing so, companies can do their bit in promoting and protecting the business and customers. At the same time, customers seek to use cashless payments, to put the safety of themselves and others first.
Digital Payment Services
With a wealth of digital payment channels that cater to customers online and instore, the UK’s businesses and customers have plenty of digital payment methods to partner with and use. Some of the most notable payment methods are Apple Pay, Amazon Pay, Square, Payzone, Stripe, Skrill and of course, Paypal.
PayPal witnessed an increase in revenue during its second quarter this year. With PayPal’s plan to continue adapting and expanding its services and products, merchants have multiple ways with the assistance of PayPal to accept card payments, digital and mobile payments over the internet and in shops.
As Paypal’s ecosystem of payments progresses by acquiring new partners in the payment industry, the company is gradually monopolising the digital payment market. Some of the services, benefits and strides PayPal has taken recently include people pay using PayPal POS hardware in stores that accept card or digital wallet transactions and partnering with other POS providers to offer advanced digital payment solutions for retail and restaurants. But this is not the only industry you’ll be able to use Paypal, it’s also one of the main payment methods for online casinos. Allowing players to pay with PayPal on reputable gambling platforms has facilitate to indulge in a selection of their favourite games, such as slot, poker and roulette.
In May 2020, Paypal also introduced QR code payment software in 28 areas across the globe. With PayPal’s significance in brick and mortar businesses increasing, if PayPal catches on through America, it’s likely to become more popular than credit card payments in the next ten years. Lastly, by acquiring Honey – a rewards platform for online shoppers – PayPal increased engagement with its customers. With Honey, PayPal can sway purchasing decisions, in turn, increasing customer and merchant engagement.
PayPal rise in 2020
Paypal benefited greatly from its shift towards mobile and eCommerce payments, particularly during the pandemic. An acceleration, as mentioned above, in consumers and businesses altering their payment methods to digital, presented payment platforms such as PayPal with their strongest quarter in history this year. Paypal transactions, in particular, climbed by 26%.
Now that more businesses across the UK have altered their payment methods to accommodate digital and contactless transactions, it’s unlikely they’ll revert back exclusively to cash payments. Moreover, with more consumers familiar with using digital payments, it’s equally doubtful consumers shall return to making solely cash transactions.