UK Consumers Trail Merchants in Digital Wallet Know-How

Trust and familiarity are central to the payments experience. At the end of the day, consumers won’t pay with methods they don’t know much about or aren’t used to.

And that’s fine, or it used to be, when the primary options available were card or cash.

But as merchants increasingly embrace innovative payment advances, particularly for cross-border transactions, the growing disconnect between consumer awareness and merchant adoption of next-generation payment mechanisms is becoming a pain point across the ecosystem.

PYMNTS Intelligence data in the report “Global Money Movement: U.K. Edition,” a collaboration with TerraPay, finds that, in the U.K. at least, while merchants have broadly adopted digital wallets for cross-border transactions, consumer uptake lags.

According to data, 85% of U.K. merchants are familiar with digital wallets, compared to only 58% of consumers. This discrepancy is not just a matter of preference. It’s a challenge that could slow the technology’s overall growth and one that the payments industry must address if digital wallets are to reach their full potential as the future of international payments.

Businesses in the U.K. have rapidly adopted digital wallets as a preferred payment method for cross-border transactions. Their high level of awareness and usage can be attributed to several factors.

First, digital wallets offer a streamlined, efficient way to process payments, minimizing the friction traditionally associated with international transactions. They eliminate many of the cumbersome steps involved in traditional methods like bank transfers or checks sent via mail. Additionally, digital wallets present a reliable solution for merchants dealing with customers in geographically diverse markets.

Another driving force behind merchant adoption is the appeal of lower transaction fees compared to traditional banking systems. The seamless integration of digital wallets into existing eCommerce platforms also contributes to their attractiveness. As more businesses pursue cross-border growth, embracing digital wallets becomes a strategic necessity rather than a mere convenience.

Yet, while businesses are sprinting ahead, the story on the consumer side is strikingly different.

See also: Digital Wallets Poised to Become the SMS of Global Money Movement

The discrepancy between merchant and consumer familiarity with digital wallets is particularly concerning because familiarity is often a precursor to adoption.

Traditional payment methods continue to dominate consumer preference. Debit cards, for example, remain the most recognized cross-border payment option, with 74% of consumers reporting high familiarity. Credit cards and bank accounts also rank high in consumer awareness, overshadowing the emerging digital wallet trend.

So, why aren’t consumers adopting digital wallets at the same rate as businesses? The answer, according to the PYMNTS Intelligence data, seems to lie in a combination of awareness gaps, generational differences and entrenched habits.

One of the most intriguing findings from the report is the clear generational divide in digital wallet adoption. Younger consumers, particularly Generation Z and millennials, are driving the shift toward digital wallet usage for cross-border payments. Among Gen Z consumers who make cross-border payments, 58% use digital wallets, while 55% of millennials do the same.

To close the adoption gap, building consumer confidence through transparency and clear communication will be essential. Digital wallet providers can work to address concerns about security and accessibility, particularly among older generations who may be less tech-savvy or more skeptical of digital payments.

 The future of digital wallets in the U.K. will likely depend on efforts to educate consumers about their benefits while addressing the specific concerns that have held back broader adoption. As younger generations continue to drive the shift toward digital payments, it will be crucial for providers to ensure their solutions are accessible, secure and user-friendly.

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