UK Payments Industry Statistics 2024

The UK payments landscape has evolved rapidly, with digital transactions soaring and cash use declining. For small business owners, understanding these trends is crucial – it helps in aligning payment options with customer preferences and staying competitive. Below we break down 20+ key statistics from 2023 (the latest full year of data) covering online and card payments, contactless usage, consumer habits, business adoption, and fraud/security. Each stat is backed by reputable sources, and we’ll explain why it matters for your business.

The Shift to Digital and Online Payments

Total Payment Volume
UK consumers and businesses made 48.1 billion payments in 2023, a 5% increase from 45.7 billion in 2022​.
More transactions overall indicate growing economic activity and more opportunities for sales – but also more competition. Small businesses should be ready to handle higher transaction volumes efficiently.

E-commerce Share
About 25.3% of all retail sales in 2023 were online, slightly down from 26.7% in 2022 as in-store shopping rebounded​.
Online sales still comprise a quarter of retail – a huge chunk. If your business isn’t selling online yet, you could be missing out on a significant market.

Online Sales Rebound
After a dip post-pandemic, UK e-commerce sales grew by ~4.8% in 2023, recovering from a 7.2% decline in 2022​.
This growth suggests consumers remain enthusiastic about online shopping. Investing in a user-friendly web store or online ordering system can capture this ongoing demand.

Remote Banking Use
Digital banking is now mainstream. 87% of UK adults used remote banking in 2023, with 62% using online banking and 60% using mobile banking apps​.
Consumers are comfortable managing money digitally, which translates to comfort with digital payments. Expect customers to favor businesses that offer smooth online and in-app payment experiences.

Open Banking Adoption
New fintech innovations like Open Banking are gaining traction. By early 2024, 13% of digitally-active consumers and 18% of small businesses were using Open Banking services, up from about 11% mid-2023​. Notably, in late 2023 payment initiation via Open Banking (account-to-account payments) overtook data access as the primary use​.
This means more people are starting to pay merchants directly from their bank accounts (via apps like Trustly, GoCardless, etc.). Small businesses should watch this trend – offering “Pay by Bank” as an option could reduce card fees and attract customers who prefer it.

Card Payments Dominate In-Store Transactions

Card vs Cash
Card payments accounted for 61% of all payments in the UK in 2023, up from 59% in 2022​. By contrast, cash made up only 12% of payments (about 6 billion transactions), down from 14% a year earlier​. Cash is still the second most frequently used method, but its share is steadily shrinking.
For small businesses, this reinforces the need to accept card payments – the majority of customers simply prefer cards or digital methods now.

Debit Cards Lead 
Debit cards are the nation’s favourite payment method. In 2023, debit cards were used for 24.5 billion payments – about half of all UK payments​. In fact, 51% of all payments were made by debit card​.
Customers love the convenience of paying directly from their bank funds. Ensure your card machine or online checkout definitely accepts debit (and that you aren’t cash-only, or you risk alienating half of all payments!).

Retail Transactions ~90% Cards 
In the retail sector specifically, card usage is even more pronounced. Nearly 90% of all retail transactions in the UK are now made with cards, according to the British Retail Consortium. In 2021, debit cards alone were 67% of retail transactions by count, with credit cards adding ~15%​.
Shoppers expect to “tap or swipe” for purchases – cash registers ringing less often with coins/notes. Small shops that adopt card terminals (including mobile card readers for market stalls or service providers) tap into the dominant payment preference of shoppers.

Decline of Cash Use
39% of UK adults (22.1 million people) in 2023 lived “largely cashless” lives, meaning they used cash only once a month or not at all​. Meanwhile, the number of people who mainly use cash day-to-day is very small (just 1.5 million, or 2.6% of adults)​.
This highlights a generational and behavioural shift – many people simply don’t carry cash often. If your business is cash-only, you may be invisible to a large segment of customers. Offering card or mobile payments isn’t just modern – it’s becoming expected.

Contactless Payments
Nearly Everyone’s Tapping

Contactless Usage Soaring
Almost 4 in 10 of all payments (38%) in the UK were made via contactless in 2023, up from ~35% in 2022​. This includes both tapping a physical card and using contactless on phones or watches. In raw numbers, 18.3 billion contactless payments were made, a 7% increase year-on-year​.
Contactless has become a way of life for consumers – it’s ultra-convenient. Businesses should ensure their card readers are contactless-enabled and encourage tap payments to speed up service.

Population Adoption 
The majority of Brits – 85% – use contactless regularly (at least once a month)​, including 83% of those over 65​. Even among the oldest seniors (age 85-95), four out of five are now contactless users​. Young adults are almost universal in tapping (91% of ages 25–34)​.
No longer just a youth trend, contactless is embraced across all ages. Small businesses can be confident that providing a contactless option will meet customers’ expectations – from Gen Z to retirees.

Ubiquitous for Small Purchases 
93.4% of all in-store card transactions under £100 are now contactless “tap and pay” rather than inserting a card or using PIN, according to Barclays’ 2023 data​.
This means virtually all customers will tap their card or phone for everyday purchases – it’s second nature. Long gone are the days of signatures or PINs for most routine transactions.

Mobile Wallets on the Rise
Not only cards, but phones are being tapped. One-third of UK adults (34%) used a mobile wallet (Apple Pay, Google Pay, etc.) for contactless payments monthly in 2023​. This share is rapidly growing (42% of adults are now registered for mobile pay, up from 30% in 2022)​.
Younger consumers especially are going “phone-only”: about 1 in 5 young adults now regularly leave the house without a wallet, relying on their phone to pay​. Small businesses should check that their payment systems accept mobile wallet payments – most card terminals do by default if they accept contactless, but staff should be familiar with handling phone/watch payments.

Cards in Circulation
At the end of 2023, there were 149 million contactless-enabled cards in circulation in the UK (debit and credit). That’s nearly 93–94% of all cards now having contactless functionality​.
Consumers are armed with tap-and-go cards as the norm. If you still see customers hesitating or asking “Do you take contactless?”, it might be time to upgrade your reader or point-of-sale – virtually all new cards can tap, and nearly all merchants can accept it.

Where People Tap 
Supermarkets are the #1 location – 39% of all contactless payments in 2023 were at supermarkets, and in total 62% of contactless payments were in retail stores (incl. grocery, clothing, etc.)​. Hospitality (pubs, fast food) and transit are other common uses.
This indicates consumers expect to tap for everyday shopping and errands. Even if you run a small boutique or café, customers will likely reach for contactless – ensure your business isn’t the exception where they have to insert a card or (heaven forbid) find cash.

Consumer Preferences & Habits

“Cashless Lives” 
The trend toward cash-free living is accelerating. 22.1 million Britons used cash only once a month or not at all in 2023​. That’s 39% of the adult population essentially living cashless – up from 21.6 million (~38%) in 2022​.
Many consumers now view cash as optional. For small businesses, this means offering digital payment choices isn’t just about convenience – it’s about inclusion. You might lose nearly 2 in 5 potential customers if you don’t cater to those who rarely carry cash.

People Still Carry Cash (Just in Case) 
On the other hand, most people haven’t ditched cash entirely – about 73% of UK adults carried some cash in their wallet in 2023, often “for emergencies”​. And 1.5 million consumers still mainly use cash for day-to-day shopping (though even most of them use other methods for bills)​. Notably, this “cash-preferring” group grew from under 1 million in 2022, likely due to some reverting to cash to budget amidst the cost-of-living crisis​.
Small businesses should thus maintain the ability to handle cash – some customers, especially those budgeting tightly, feel more in control with notes and coins. The key is to balance by accepting cash and digital methods, so all customers feel comfortable.

Average Transaction Values 
As contactless limits increased (£100 limit for cards), consumers are using digital payments for higher amounts. The average contactless purchase in 2023 was £15.69, up 3.8% from the previous year​. And the average contactless user made 231 transactions in the year, spending a total of £3,623 via contactless – an 8.9% increase in spend vs 2022​.
People are comfortable tapping for bigger ticket items now, not just coffee or bus fare. For businesses, this can speed up even medium-sized sales and potentially increase impulse buys (since tapping £30 or £50 “feels” easier than handing over cash).

Buy Now, Pay Later (BNPL)
Shoppers are also embracing alternative payment models. 14% of UK people used a “Buy Now, Pay Later” service in 2023, up from 12% in 2022​. Services like Klarna and Clearpay have become common for spreading payments on online purchases.
This trend is mostly in e-commerce and some larger point-of-sale contexts. Small retailers (especially online) might consider offering BNPL options to boost conversion – but also be mindful of upcoming regulations around these services (more on that in the next blog).

Faster Payments & Bank Transfers 
Direct account-to-account payments are now the third most used payment type. In 2023, Faster Payments (instant bank transfers) overtook Direct Debit for the first time, with nearly 4.9 billion Faster Payments (10% of all payments) vs 4.8 billion Direct Debits​. Consumers use Faster Payments for things like transferring money to friends or paying contractors.
For businesses, this indicates a rise in customers paying via bank transfer – for example, settling invoices or paying deposits directly. Ensuring your banking details are easily available for customers who prefer online bank transfers can speed up payments to you.

Business Adoption of Digital Payments

Small Biz Card Acceptance 
Despite the consumer shift, not all small businesses have caught up. A government study found that just over half of small businesses (52%) accepted card payments as of a couple years ago​. Larger small firms (10–19 employees) had much higher adoption (72%), while sole traders and those selling B2B were less likely to take cards​.
If you’re among the half of small businesses still not taking cards, consider the competitive disadvantage – customers may opt for a competitor that offers card payments. The good news is that mobile card reader technology (from Square, SumUp, etc.) has made it easier and cheaper than ever for the smallest businesses to accept cards anywhere.

Contactless Everywhere 
Thanks to industry initiatives, virtually all merchants are now equipped for contactless. Since January 2020, 100% of bank-issued card terminals in the UK are contactless-capable​. This widespread infrastructure, plus the proliferation of smartphone-based card readers, has dramatically increased the locations where consumers can tap to pay​ – including market stalls, food trucks, and mobile tradespeople.
In practice, this means any business can enable quick “tap” payments with minimal setup. Customers have grown to expect it even at the smallest vendors (think farm shops, craft fairs). If you haven’t yet enabled contactless, you may actually already have the equipment – it’s often just a matter of activating it with your provider.

Online Payment Options for SMEs 
On the e-commerce front, many small firms have embraced online payment gateways (PayPal, Stripe, etc.). 92% of small businesses accept online bank transfers and 80% accept “other methods” like PayPal or digital invoices when selling to customers.
Offering multiple ways to pay online – card, PayPal, bank transfer – can reduce abandoned carts and appeal to customer preferences. Importantly, newer methods like Open Banking payments can be integrated via some providers, often with lower fees than cards.

Cash Still Welcome (for Now) 
Interestingly, 100% of surveyed mid-size businesses (50-249 employees) had the ability to accept cash, though only ~73% actively do so in practice​. Among small businesses, many still accept cash for customer choice reasons.
For community-minded small shops, continuing to accept cash can be a differentiator (serving elderly or unbanked customers, for example). But as digital grows, businesses should evaluate the costs and security of handling cash versus the volume of cash sales.

Fraud and Security Trends

Fraud Losses in Perspective 
With more digital payments, fraud is a concern – but industry efforts are helping. Fraudsters stole an estimated £1.17 billion through UK payments scams in 2023 (across both authorised scams and unauthorised fraud)​. This is actually 4% lower than in 2022 as banks and regulators ramped up anti-fraud measures​.
While the number is large, it shows progress in keeping fraud in check even as digital transactions grow. For small businesses, being vigilant (e.g., using card terminals with PIN for higher amounts, adopting fraud screening on online sales) remains essential – but you can also reassure customers that banking industry measures are reducing fraud risk overall.

Card Fraud and Contactless
Contactless payments remain very safe relative to volume. In 2022, losses from contactless card fraud were £34.9 million. That was an 82% jump vs 2021 (partly due to post-lockdown activity), yet contactless fraud still represented only 6% of overall card fraud losses​. Meanwhile, 57% of all card transactions were contactless that year​. In other words, more than half of card swipes/taps were contactless, but those accounted for only a tiny fraction of fraud.
This should give comfort to small merchants and their customers – tapping a card or phone isn’t introducing outsized fraud risk. Built-in security features (like occasional PIN prompts and biometric ID on phones) keep contactless crime low​.

Rise of Scams 
Authorised Push Payment (APP) scams (where consumers are tricked into sending money) have been a major focus. In 2023, purchase scams spiked – cases up 34% and losses up 28% – as fraudsters targeted people with fake goods and services​. By contrast, high-value scams like investment and impersonation cons saw losses drop ~5–28% due to better controls​.
For small businesses, this trend means customers are more wary of scams. It’s good practice to reassure customers of your legitimacy – e.g., having a verified payments provider, clear refund policies, and communication channels – so they feel safe doing business with you. On the flip side, be on guard for scammers impersonating your business or targeting your own accounts.

Mandatory Reimbursements
A big change in fraud policy: from October 2024, UK banks must reimburse victims of authorised push payment scams in most cases (except customer gross negligence)​. This banking regulation means by 2024/25 customers have more protection if they are tricked into paying a fraudster.
Indirectly, this could boost confidence in digital payments further – though banks will be extra cautious to spot fraud. Small businesses might experience more routine checks or warnings on bank transfers, but overall it builds trust in the payments ecosystem.

Security Tools 
The industry is doubling down on tech like AI to fight fraud. Visa, for instance, invested $3.3B in AI and rolled out new AI-powered fraud prevention tools in 2023 to cut fraud in real-time for both card payments and instant bank payments​.
Smaller merchants benefit from these upstream protections – many fraud attempts are stopped before they reach your door. Still, staying informed about common scams (phishing, fake invoices) and using available security features (card verification, two-factor authentication for online admin access) is key to keeping your business safe.

Why These Stats Matter 
As a small business owner, the numbers tell a clear story – UK consumers are embracing faster, easier digital payments en masse. Card and contactless payments are now the norm, online shopping is huge, and even newer methods like mobile wallets and bank-to-bank payments are quickly gaining users. Adapting to these preferences (by accepting cards/contactless, offering online checkout options, maybe exploring emerging payment apps) can directly impact your sales and customer satisfaction. At the same time, knowing about fraud trends and security measures helps you safeguard your business and reassure customers that paying you is safe. The UK payment landscape in 2024 rewards businesses that are flexible, tech-friendly, and customer-centric in how they accept money. Use these insights to check your own operations – are you keeping up with how your customers want to pay?