To Pay Now, or to Pay Later: Consumers Divided on How Best to Manage Their Spending

Overall spending:

• Digital payments have surged in the UK, largely driven by the rise of digital wallets. From 2014 to 2024, the value of e-commerce transactions conducted via digital wallets quadrupled, accounting for £108 billion in spending last year.

This rapid adoption has positioned the UK as the third, behind Denmark and Norway in Europe for online digital wallet use.

Debit and prepaid cards:

• Despite the rise of digital alternatives, UK consumers remain loyal to cards. £1 trillion of total in-store and online spending was conducted using cards in 2024.

In 2024, the share of in-store spending via debit and prepaid cards was almost double that of credit cards, at 46% compared to 24% at POS.

63% of digital wallets in the UK are funded by cards, underscoring their continued role in the UK’s payment infrastructure, despite the growth of digital methods.

• Consumers in the UK are increasingly spending within their means, as at point of sale (POS) spending, debit and prepaid cards accounted for 22% of total transaction value in 2024, up from 15% in 2014*.
• Almost a quarter of UK consumers indicating that budgeting was a motivator for using debit cards in store, rising to almost a third for online use**

BNPL:

• There has been a rapid expansion of BNPL, which has grown from under 1% of online spend in 2014 to account for 7% of online spend in 2024.

It is projected that by 2030 £33bn of UK online spend will be made via BNPL, reflecting a broader shift in consumer purchasing behaviour towards more flexible and digital payment solutions.

Cash:

• Despite a significant decline in cash use, the rate of decline has stabilised and it remains a vital part of the UK payments landscape. It is projected to account for £109 billion (8%) of in-store spending by 2030.