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UK payments – your exclusive look into the future

Paying for goods and services has become increasingly intangible and remote. Over the past few decades, credit cards, debit cards, contactless, online banking, mobile banking, and digital wallets have accelerated the rate of change. As innovations continue, money is becoming increasingly digital and less physical. 

Over the last decade, how we authorise, understand, and control payments has changed exponentially: in 2022, 86% of UK payments were digital, compared to 44% in 2012. Fraud in payments is on the rise, representing 41% of all crimes committed in the UK. Open Banking is one of the UK’s leading innovations for faster payments. However, it lacks consumer protection.

To prepare for the future, the HM Treasury commissioned a “Future of Payments Review” report authored by Joe Garner, offering several recommendations for ensuring the UK is set to deliver a world-class retail payments ecosystem.

3 key payment questions and predictions

To prepare this report, the government conducted roundtables and gathered opinions from various financial institutions, Fintechs, Big Tech, Telcos, Consumer Groups, Regulators, Retailers, Merchants, and Trade Associations. In addition, they received more than 60 submissions to their Call for Input. 

Trust Payments was one of the Fintechs invited to contribute to the report and was asked to respond to three main questions about the future of payments:

What are the most important consumer retail payment journeys both today and in the next 5 years?

For these journeys today, how does the UK consumer experience for individuals and businesses compare versus other leading countries?

Looking at the in-flight plans and initiatives across the payments landscape, how likely are they to deliver world-leading payment journeys for UK consumers?

Here are our main predictions for the upcoming year:

The most important consumer retail payment journeys are influenced by the UK’s payment landscape shift from cash to digital and contactless methods, driven by open banking and technological advancements. 

This change is evident in consumer behaviour, with increased use of mobile wallets and account-to-account transfers, and in business practices, such as accepting diverse local payment methods. Additionally, emerging trends like Buy Now Pay Later (BNPL) schemes are gaining traction, suggesting a future with more regulatory oversight.

In the ecommerce sector, for online payments, there is a notable shift towards mobile-based loyalty programs and digital remittances, moving away from physical cards and vouchers. 

We believe the next five years are expected to accelerate these trends significantly. Businesses will need to adapt by offering varied payment options to enhance consumer trust and by integrating new payment methods, including digital currencies, to address evolving payment friction points.

Our prediction was backed by supporting data in the report:

UK consumers have changed their payment habits at an incredible pace during the coronavirus pandemic and have embraced digitisation, as cash became a hygiene risk and contactless became the norm. 

There has been a strong focus on security, and UK directives have made authentication a crucial step before remote payments can be made. The legislation of more risk-prone payment methods like Bitcoin and central bank digital currencies still needs to be addressed.

Trust Payments also has offices in Malta and Cyprus, and the differences in digitisation uptake between our island and theirs are stark.

Lastly, regarding the UK’s in-flight plans and initiatives across the payments landscape, we believe that the introduction of Consumer Duty standards marks a significant advancement in consumer protection within financial services, emphasising the importance of prioritising customer needs. 

As the payment landscape evolves, providing consumers with clear guidance and trust-building measures is crucial for seamlessly adopting new payment options. In the UK, consumers demand fast, effortless online transactions, prioritising speed, convenience, and simplicity, with a preference for one-click processes. These expectations underline the need to continuously enhance the payment user experience, highlighting the value of established standards for optimal performance.

UK payment system challenges and opportunities for improvement

The main challenges of the UK payments ecosystem, as highlighted in the report, are:

Businesses should streamline and align their payment systems to make the most of this opportunity as they look to grow their payment volume and align with the regulatory requirements. 

Having a partner who can support you with the practical implementations from this report is more important than ever so you can realise your business’ payment potential as a primary growth enabler. 

Trust Payments combines technology and financial services to create a leading-edge fintech platform. Our payments and commerce businesses are at the heart of our vision to build award-winning payment solutions. Get in touch to learn more.

Security statement

Security is our top priority at Trust Payments and we strive to ensure that all data is kept secure at all times We keep all customer data safe with AES256 encryption, SSL Certificates, and a minimum of TLS1.2, between your website and our datacentres.

Our systems are scanned quarterly using the Qualys PCI Platform, an independent Qualified Security Assessor (QSA) and approved vendors – Omnicybersecurity (UK) & Forgenix (US) – to ensure compliance with the security requirements of the card schemes.

We follow a number of rigorous security procedures on a daily basis including, but not limited to, continuous monitoring of our perimeter, dark web monitoring, and internal checks to ensure that CIA triad is maintained at all times.

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