Financial news

Embedded finance continues to grow in the UK, and consumers appear to be wanting more of the convenience offered by it in ever-greater numbers when it comes to payments, according to a new study from Marqeta, the card issuing platform.

2023’s edition of the annual ‘State of Payments‘ report by Marqeta has revealed that consumers are now fully embracing the value that embedded finance can bring to their lives. The findings come from a survey of 4,000 consumers across three continents, 1,000 of which are from the UK.

Seventy-two per cent of UK mobile wallet users surveyed have now made a purchase via a retailer’s embedded mobile app owing to the enhanced experience. Meanwhile, 73 per cent of UK mobile wallet users also revealed that they now feel confident enough to leave their wallet at home, and only rely on their phone for making payments.

Digital payment processes are also growing in popularity, in part thanks to growing confidence surrounding them. Seventy-six per cent of UK respondents explained they will always add new cards to their mobile wallet. Eighty-nine per cent also believe this to be a “simple” process, rising from 81 per cent in 2022. As a result, 93 per cent of UK mobile wallet users surveyed reported having one or more cards loaded into their mobile wallet.

UK payment statistics 

Marqeta also revealed a range of other payment trends, hinting at what the future of payments may look like in the UK:

• 73 per cent of UK consumers had used peer-to-peer (P2P) payment transactions at least once
• 95 per cent of UK consumers surveyed reported using contactless payments in the past 12 months
• 68 per cent of UK consumers surveyed had used a mobile wallet in the last 12 months
• 65 per cent of UK consumers surveyed believe cash will disappear completely – with a further 44 per cent believing this will happen within the next 10 years.

Although demand for digital and embedded finance services is still increasing, UK consumers remain committed to their traditional banks. Eighty-four per cent use a traditional bank as their primary provider. Forty-one per cent also stated they had remained loyal to their current bank for over ten years.

A further 77 per cent of UK respondents said they had no intention of changing their primary banking provider. The majority of respondents use their primary bank provider for debit card (77 per cent) or savings account (53 per cent) services.

‘We’re at an inflexion point’

Jeff Parker, SVP and managing director of international at Marqeta, said: “Embedded finance is enabling brands to become financial service providers, offering consumers more streamlined payment experiences. What our report shows is that after years of massive digital innovation, consumer confidence in modern, embedded payment methods is high and companies who don’t offer these can miss out on future adoption.

“We’re at an inflexion point when it comes to legacy providers coexisting with new-age payment services. While our report shows a current balance between traditional and digital-first, embedded finance is challenging companies to think about how they build payment solutions into their offerings. Long-term consumer loyalty will depend on who can provide the most exceptional end-to-end user experiences.”