UK consumers expect SMEs to offer digital payment methods
As digital payments continue to grow in popularity, the UK is experiencing a significant shift towards cashless transactions. With the rise in contactless payments and digital wallets, we’re witnessing how everyday consumers are relying less on cash and traditional payment methods.
To discover how payment preferences are evolving, SumUp conducted a nationwide survey, gathering insights from UK consumers about their payment habits. The findings offer valuable insights for SMEs, helping them to better understand shifting purchasing behaviours. Insights include the payment methods people prefer, their concerns around certain payment methods, alongside how they feel about businesses that don’t accept digital payments.
What are UK consumers’ preferred payment methods?
In recent years, the way people pay for goods and services has gone through a significant transformation. With a growing range of payment options available, from contactless cards to mobile wallets, and Buy Now, Pay Later services, consumers are increasingly looking for convenience, security, and flexibility in how they make purchases. But which methods are the most preferred?
Over half of people (62%) say that they prefer to pay with debit or credit cards, highlighting the continued dominance of traditional card-based transactions.
In addition, 18% of consumers find mobile payment options, such as Apple Pay and Google Pay to be the most convenient choice, reflecting the growing adoption of digital wallets. Furthermore, there are notable age-based differences that come with this method. Among younger generations, mobile payments are popular, with more than a third (36%) of those aged between 18 and 24 adopting mobile payment methods, alongside 28% of people aged between 25 and 34.
Interestingly, only 11% of people still favour paying in cash, highlighting the shift towards more streamlined and digital alternatives. Other emerging payment methods include Buy Now, Pay Later services (4%), alongside more innovative methods such as cryptocurrency and wearable technology like smartwatches and payment rings (1%).
The factors that have influenced changes in payment preferences over the past year
Over half (51%) of people said that they have changed the way they pay for goods and services over the past year. Among them, 22% have embraced digital payment methods, with the increased convenience of this method being a key factor in their decision.
Additionally, 15% of consumers have reduced their use of cash, largely due to merchants and transportation services adopting tap-to-pay, making physical cash less necessary. Meanwhile, 9% have turned to Buy Now, Pay Later services, appreciating the flexibility of spreading payments over time and taking advantage of special offers from retailers through these services.
Furthermore, 4% have started using subscription-based services for regular purchases such as groceries, pet food, or personal hygiene products, enjoying the ease of scheduled deliveries and fixed payment plans. These shifts all reflect the growing demands for convenience and flexibility in how consumers make purchases.
Are UK consumers still using cash?
A quarter (25%) of people express a dislike for paying with cash, and for many, businesses that don’t offer digital payment options can be a source of frustration. In fact, 19% find it inconvenient when a business doesn’t accept digital payments or cards, while 11% actively avoid such businesses, expecting all establishments to provide digital payment options as a standard.
Despite 8% of consumers preferring to shop at cash-only businesses, three quarters (75%) still consider cash as an option in certain situations. For 26%, using cash provides a greater sense of control over their spending, whilst 22% find it quicker and more convenient. Additionally, 17% of consumers simply prefer the tactile nature of cash transactions.
Furthermore, 22% of people only use cash when they receive it as a gift, such as during Christmas or birthdays, highlighting how certain occasions still drive cash usage.
Other reasons for continued cash usage include the desire to avoid digital payment fees or charges (12%), the lack of access to digital payment methods (12%), and concerns over the security of digital transactions, of which 8% of consumers expressed a mistrust.
How do consumers feel about businesses that don’t accept digital payments?
With most UK consumers now preferring digital payment methods, how do they feel about businesses that haven’t made the switch?
For 11% of consumers, they actively avoid businesses that don’t accept digital payments, stating that they expect all retailers to offer modern payment options. A further 19% described cash-only businesses as inconvenient, saying they prefer to shop with those that support contactless or digital wallet transactions.
However, the sentiment isn’t entirely one-sided. Nearly a quarter (24%) of people believe businesses should be accepting digital payment methods, but understand why some may not. Meanwhile, 39% of people said they don’t mind either way, often carrying cash as a backup in case digital payment isn’t available.
Interestingly, 8% of consumers actually prefer shopping at cash-only businesses for certain types of transactions, suggesting that while the majority are moving towards digital, there’s still a niche appreciation for traditional payment methods.
How are Londoners’ behaviours changing?
London has long been a trendsetter when it comes to consumer behaviour, with its thriving economy making it a key way to measure changes in the wider market. As payment preferences continue to evolve, Londoners are at the forefront of adopting new technologies and payment methods.
Similarly to Brits overall, 61% of Londoners prefer paying with debit or with credit cards. However, a slightly larger proportion of 20% opt for mobile payment methods, and a lower amount of people prefer cash (8%).
Two thirds of Londoners (66%) said that they have changed the way they make payments over the past year, with over a quarter (28%) switching to more digital payments including apps, contactless, or digital wallets, alongside 14% that have made the switch to Buy Now, Pay Later services. In addition, 14% said that they have started to use cash less frequently due to the increase in merchants in London offering digital payment options.
Whilst over a quarter (29%) of Londoners said that they don’t mind cash and still carry it for situations where digital payments aren’t an option, a growing number of people in the city are expressing that digital payments are more favourable. Although 26% of Londoners said that they think businesses should adapt to more modern payment methods, they understand why some may not due to certain charges. Furthermore, 19% said that they find it inconvenient and prefer to purchase from a business that offers digital payments, and for 15% of Londoners, they avoid cash-only businesses whenever possible and expect all businesses to offer digital payments.
Corin Camenisch, marketing & growth lead at SumUp commented on the report, saying “We ran this survey to gain a deeper understanding of UK consumers’ ever-evolving payment preferences and to offer valuable guidance to SMEs, helping them to adapt to changing consumer behaviours and better meet their customer needs.
“While debit and credit cards continue to dominate as the preferred payment method, it’s clear that cash is slowly declining in use, particularly among younger generations. That said, cash still holds its place for many. Looking ahead, we can anticipate a rise in innovative payment methods like digital wallets, especially as younger consumers increasingly embrace the convenience and flexibility they offer.”