A recent survey has revealed changing preferences among UK consumers when it comes to online payment methods, highlighting a generational divide and the increasing popularity of mobile and digital wallets.
Preferred payment methods
The survey, conducted by takepayments and involving 2,000 British consumers aged between 16 and 86, found that debit and credit cards remain the most popular choice for online shopping. 63% of respondents identified cards as their preferred payment method. Despite the emergence of new technologies, trusted methods still dominate the market.
However, mobile and digital wallets are becoming more common, particularly with younger shoppers. The findings showed that 17% of respondents prefer mobile wallets - such as Apple Pay - when purchasing online with their phones, while 14% opt for digital wallets like PayPal or Amazon Pay. In total, 31% of those surveyed expressed a preference for digital wallet options. Buy Now Pay Later (BNPL) services are much less commonly preferred, with just 3% of respondents selecting them as their favoured method.
Generational trends
Preferences varied significantly across different age groups. Over-55s are the most dedicated users of debit and credit cards, with 77% in this age group choosing cards as their primary online payment method. In contrast, among 18-24-year-olds, mobile wallets have overtaken cards in popularity. 42% of respondents in this youngest bracket expressed a preference for mobile wallets, compared with 39% who favour cards.
Gender also played a role, though less pronounced than age. Men displayed a stronger preference for cards (67% versus 58% for women), while women were somewhat more likely to prefer mobile (19% compared to 14%) or digital wallets (15% compared to 13%). Women were also more likely to use BNPL services (4% versus 2% for men).
"These figures show there's still a clear divide in how different age groups approach paying online. While younger shoppers are driving the growth of mobile wallets, older generations still prefer traditional debit and credit cards, which means businesses need to cover both bases to keep everyone happy at checkout. Offering flexible payment choices is a simple way for small businesses to meet these varied expectations and make sure no sale is left behind."
Reasons for choosing mobile wallets
Among those preferring mobile wallets, convenience is the main motivator. 72% of mobile wallet users cite convenience as the deciding factor, while 52% appreciate faster transaction times. 21% of mobile wallet users believe these options are the safest way to pay online.
Rona Warne, Head of Marketing UK&I at Global Payments, said, "It's clear that speed and convenience still win over security for many online shoppers. People want a checkout that works quickly with as little friction as possible, which is why mobile wallets keep growing in popularity. But just as important is giving your customers a choice. Not everyone trusts or wants to use the same payment method every time."
Loyalty and payment options
The availability of preferred payment options also impacts consumer behaviour. 15% of shoppers stated they would abandon a purchase if their preferred mobile or digital wallet was not available. However, 46% said they had no strict preference, and 34% indicated they would still make a purchase at stores lacking wallet options but would consider it an inconvenience.
Security expectations
Security remains a significant concern, with 72% of respondents looking for symbols such as Verified by Visa or Mastercard SecureCode as indicators of a safe transaction. 40% of those surveyed valued secure payment gateways - evidenced by padlock symbols and "https" URLs - and 36% preferred retailers offering two-factor authentication. 25% expected strong password requirements.
"Consumers are more informed than many businesses might realise when it comes to online payment security, and all the IT outages in 2024 have only made consumers even more aware of where they're tapping, swiping, or entering their card details. For small businesses, displaying trusted security symbols and ensuring the checkout process uses secure payment gateways can help build customer trust, but they should also clearly communicate this to customers," John Clark, Product Manager at takepayments explains.
Shopping frustrations
The process of entering card details continues to be the most common frustration for online shoppers, with about 30% describing this as the biggest annoyance. Additional grievances include the requirement to create an account before making a purchase (20%) and undergoing extra security checks (19%).
Attitudes towards open banking
Opinions on open banking remain split. 52% of respondents are comfortable using open banking for online payments, while 23% are not. Among those wary of open banking, 38% cite security issues - such as the risk of hacking or data breaches - as primary concerns, while 29% are uneasy about sharing their bank details with third parties. Those in favour of open banking identified trust in its security (46%) and the convenience and speed compared to card entry (31%) as leading reasons.
Younger shoppers are more likely to embrace open banking, with only 16% of the 18-24 group expressing discomfort. By contrast, nearly one-third (33%) of those over 55 remain cautious.
Rona Warne, Head of Marketing UK&I at Global Payments, said, "While open banking is gaining traction, especially in the UK, where there are an estimated 7 million users, there is still a long way to go before it becomes a fully trusted payment method for the majority of consumers.
"Even though younger shoppers are more likely to embrace it, a significant portion of consumers remain cautious, particularly due to security concerns like data breaches or sharing sensitive banking details with third parties. For small businesses, there's an opportunity to lead the charge in educating your customers about the safety and benefits of open banking, but also to be mindful of customer hesitancy."
