The future of payments in the UK

The UK’s payment landscape is changing, with consumers now preferring fast, cashless transactions over traditional payment methods. Contactless payments, mobile wallets, and digital payment solutions are growing in popularity, while use of cash is becoming far less frequent.

In light of these shifting habits, we surveyed 1,500 people in the UK to further explore their purchasing behaviours. What are people’s preferred methods of payment? How do they feel about businesses that don’t accept digital payments? And are there any concerns surrounding newer payment technologies? Dive into a full rundown of our results below!

Preferred payment methods in the UK

First up, what payment methods are UK consumers most likely to choose? Well, a huge 62% of our participants said that they prefer to pay with a debit or credit card, while only 11% favour cash.

Mobile payments like Apple Pay and Google Pay are becoming increasingly popular too, with 18% of respondents regularly using them. Additionally, 4% of our participants mentioned that they prefer mobile-only apps like PayPal, with 1% preferring wearable payment methods which allow for quick, hands-free transactions.

But do payment preferences vary by age and location? In the 18-24 age group, 43% prefer paying with debit or credit cards, 36% use mobile payments, and just 8% rely on cash. The inclination towards cash rises in the 45-54 age group (15%) and in the 65+ age group, there’s a strong preference towards debit and credit cards (79%).  

When it comes to location, credit card payments remain popular, especially in the South West (69%) and Eastern England (68%). Mobile payments are prevalent in areas like London (20%) and the South East (24%), but less so in Northern Ireland (11%). And in terms of traditional cash payments, London and the South East show some of the lowest usage (coming in at 8% and 9%).

 Interestingly, buy-now-pay-later services are gaining traction in regions like the North East, with 8% of participants revealing that they’re now leaning towards more flexible payment methods.

How have payment preferences changed in the last year?

We also asked participants whether their payment habits have shifted in the past year, and if so, what factors influenced this change. A notable 22% of people confirmed that they’ve switched to digital payment methods (including apps and contactless services) with 15% revealing that they now use cash far less frequently.

On top of this, 4% mentioned adopting subscription-based payment methods for services like groceries, pet food, and personal hygiene, with 9% also using buy-now-pay-later services.

Despite these trends, 49% of our participants did say that their payment methods haven’t changed, with 17% still preferring cash. So why is this? Well, 26% said that cash helps them feel in control, while 22% simply find it more convenient.

Some participants also expressed scepticism around the safety of digital payments (8%) with 12% worrying about connection issues when trying to pay.

How do people in the UK feel about businesses that don’t accept digital payments?

So, for those who prefer digital payments, how do they feel about businesses that still only accept cash? For many people (39%) this isn’t a big issue, with 8% revealing that they actually prefer shopping at cash-only businesses for certain transactions.

Still, 24% of participants believe that all businesses should now cater for modern payment methods, with a further 19% finding cash-only businesses inconvenient. Additionally, 11% avoid cash-only businesses altogether, favouring shops, cafes, and restaurants that offer digital options.

The biggest concerns when it comes to payment methods

Although cashless payments are on the rise, there are still some lingering concerns around modern payment methods. For instance, 36% of respondents worry about security issues like fraud, hacking, and stolen data, while 34% have concerns about their phones failing to connect when trying to pay. Data privacy was also a concern for 25% of participants, with many wary of potential tracking from banks and tech companies.

 Cash payments aren’t without their downsides either, with 28% mentioning how locating an ATM can often be a hassle, and 23% raising the point that cash makes spending much more difficult to track.

Despite these concerns, 13% of participants expressed full trust in all of the above payment methods.

Do people trust AI to make payments?

With the rise of AI technologies, we also asked our participants whether they would trust AI to make small, automated payments on their behalf, and we got a mixed bag of responses…

Most people (38%) said that they would not trust AI with their finances, with a further 33% stating that they prefer to review all their transactions themselves. 12% said that they would be happy to use AI, but only for small, everyday purchases like coffee and transportation, with 12% being happy to extend this to subscriptions and bills too.

Finally, 11% place full trust in AI, revealing that they’d be happy to use it for payments of all kinds.

Are digital wallets making people forgetful?

With the rise of convenient digital payments like tap-to-pay, are people in the UK becoming more forgetful when it comes to remembering important banking information? Well, 7% admitted that they frequently forget their PIN, with 24% revealing that while they haven’t fully forgotten it, they have had trouble remembering it once or twice. 44% however have never had trouble remembering, even though they are now mainly reliant on mobile payments.

Younger participants, particularly those aged 18-24, are more likely to forget their PIN (15%) compared to just 3% of those 55-64. Interestingly, 10% of participants in the 35-44 age group also admitted to forgetting theirs, likely due to their infrequent use of cards.

What are Londoners’ payment preferences?

Debit and credit card payments are the most popular in London (61%), followed by mobile payments (20%), and cash (8%). Interestingly, cash usage in the capital is lower than the national average of just 11%. Wearable payment methods are also slightly more popular in London, with 2% favouring them compared to 1% nationwide.

28% of our participants said that they’ve switched to using more digital payment methods in the past year, topping the national average of 22%. Buy-now-pay-later services are also gaining traction in the city, with 9% of respondents using them compared to just 4% nationally.

 But how do Londoners feel about cash-only businesses? Well, it turns out that 15% avoid them altogether, with 26% revealing that they believe all businesses should now offer modern payment options.

When it comes to concerns about specific payment methods, security tops the list, with most people worrying about fraud or stolen card details. However, Londoners are slightly more trusting of AI payments, with 16% trusting AI to handle transactions compared to 11% overall.

So, while there’s a clear shift towards digital payment solutions nationally, Londoners in particular appear to be leading the way.  

What can UK businesses do to support evolving payment preferences?

 So, with the above insights in mind, what can small businesses do to support changing customer demands? Here are a few top tips:

1. Embrace contactless payments and digital wallets

Many consumers are leaning towards the convenience of digital wallets (like Google and Apple Pay), opting for payment methods that are both quick and efficient. So, if you’re a small business owner, consider setting up POS systems for speedy and secure transactions.

This is an investment that can go a long way in providing people with the modern, seamless shopping experience they’re craving.

2. Offer flexibility where possible

While digital payments are on the rise, there’s still an evident demand for cash and card payments (especially amongst older generations). The landscape is constantly changing, and buy-now-pay-later methods are also growing in popularity with younger consumers.

Today’s customers require flexibility, so it’s necessary to offer multiple payment options to avoid alienating certain demographics. With this in mind, business owners should aim, where possible, to allow customers to pay in a way that works for them.  

3. Stay up to date with trends

 Over half of our participants said that their payment habits have changed in the past year, so who knows what the next twelve months will bring? The landscape is constantly evolving, and if you want to keep up, you’ll need to evolve with it.

Regularly reviewing emerging trends—such as new technologies like wearable payment methods—will help you stay ahead and maintain a competitive edge. Commit to continuous learning so that you’re ready for any shifts in consumer behaviour.

Corin Camenisch, Marketing & Growth Lead at SumUp commented on the report, saying “We ran this survey to gain a deeper understanding of the ever-evolving payment preferences in the UK, 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.” 

And there you have it, our insights on how payment preferences in the UK are evolving, and how small business owners can best keep up. It’s clear that there’s a shift towards digital and contactless payments, with many favouring the ease and convenience they offer.

 By embracing contactless and digital wallets, offering flexibility, and staying informed, UK small business owners will be able to meet customer demands and prepare for the future of payments.

Whether it’s installing portable and easy-to-use card readers or Tap-to-Pay machines, here at SumUp, we have everything you need to streamline the payment process. And if it’s more insights you’re after, why not check out our guide on the best payment options for small businesses in the UK?

Methodology

 We ran a survey across the UK, asking 1,500 adults across all regions in the UK about their behaviours when it comes to payment options, their concerns about different payment methods, and whether they would embrace AI to make automated payments on their behalf. The survey was conducted in March 2025.