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Understanding the Shift in British Consumers’ Payment Preference

Understanding-the-Shift-in-British-Consumers-Payment-Preference

British consumers now use credit cards more than ever. A study conducted by Comparethemarket revealed that about 54% of UK adults use their credit cards over their debit cards when paying for shopping, food, clothing, household bills, and much more. Aside from using credit cards, 50% of adults also use alternative ways of paying for items and bills, such as ‘Buy Now Pay Later’ schemes and even personal loans.

British consumers have now changed their preferences for payment options, making it crucial for businesses to adjust accordingly. Cash is no longer king in the UK, now that people have experienced the convenience of other payment methods.

The Growing Preference for Contactless Payment Methods

The use of cash is declining in the UK, as more consumers leverage cards and contactless payment methods for their purchases. The UK Payment Markets 2022 Report revealed that debit and credit card payments decreased in 2020. However, the usage of cards rebounded in 2021, and they eventually became the preferred option for more than half of payments in the past two years.

The report also pointed out that cash payments started to decline, ever since contactless payment options, online banking solutions, and mobile wallet channels became popular in 2020-2021. These contactless payment options were used for almost a third of all transactions made in the UK during 2021, while cash payments have steadily declined.

How Can Businesses Adjust to This Shift?

Use machines that support card payments

As previously mentioned, about half of British consumers use their credit cards for purchases. To meet consumer demand, businesses need card reader machines that can process payments from Mastercard, Visa, and other major credit card companies. Businesses can even opt for portable or mobile card machines that can accept credit card payments, whether you’re on the shop floor or on the move for a delivery. By accepting consumer credit card payments, businesses can avoid turning down interested customers and even encourage people to purchase more items from their shops.

Implement buy now, pay later schemes

Businesses that plan to target younger consumers should consider offering “buy now pay later” schemes as a payment option. Equifax reveals that 15 million adults of all ages in the UK constantly utilise this form of credit, with 20 to 30-year-olds making up 30% of this consumer group. This financing option is supported by Klarna, Clearpay, Laybuy, and PayPal to give people the convenience of spreading the costs of their purchases over the span of a few months. While this payment option is more prevalent among online stores in the UK, brick-and-mortar retailers are slowly accommodating the payment option.

Support more flexible payment options

Aside from accommodating various lines of credit, businesses can also develop more flexible payment options to attract more consumers. Hampton already adopts this flexible payment scheme by Hilton Canterbury, which allows members to combine their Points and their cash to book a stay in the hotel. The renowned hotel offers a flexible payment slider, which makes it possible for members to use any amount of their Points and cover the rest through cash. Likewise, businesses can mix membership points or lines of credit with cash payments to accommodate more customers.

Cash payments may be convenient for most businesses. But now that consumers are exploring diverse methods, businesses must follow by supporting more payment options.

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