The United Kingdom is one of the world’s most dynamic payment markets, and a European leader in Open Banking, instant payments and other areas.
Despite much hype around new payment forms, cards continue to play an important role in Britain’s payment mix – with evidence suggesting their use will continue to grow over the next decade.
UK Market Trends
Multi-currency cards, primarily driven by neobank Revolut and currency transfer specialists Wise, have grown to account for a high proportion of cross-border payments as most UK citizens travel outside the GBP area.
And while the UK remains Europe’s most dynamic credit market, fintechs have emerged that combine debit and credit functions in a “flex” product designed to help millennials manage their budgets.
In such a competitive market, the growth of such “flex” products to become “top of wallet” choice for millennials represents a major threat to traditional banks which have chosen either to develop their own products, or take over neobank/fintech players such as Virgin or Curve.
Finally, many issuers are now offering debit cards based on crypto-currency deposits, which are attractive to customers holding crypto either as a hedge against inflation or as a means of deriving added value from their crypto holdings.
The Continued Prevalence of Cards
Cards were used in almost 30 billion transactions (29,095 million) in 2024, an increase of 7.35% per year over a five year period.
Debit card payments grew at more than double the rate of credit payments (8.1% vs. 3.9%) last year, with consumers eight times more likely to use debit than credit for any given transaction.
On average, consumers are using their cards more often, too, with the average number of payments per card each year increasing by 7.15% over the past five years.
This evidence for strong growth in the card market runs against much current thinking, which would see digital wallets as the payment method of choice.
While digital wallets are projected to handle up to 61% of online transactions in the UK by 2028 (up from 50% in 2023), around one-third of these online digital wallet transactions are run through cards.
Likewise, the argument that Buy Now, Pay Later (BNPL) transactions could displace credit cards – especially for Millennials and Gen Z – has some merit, although regulatory headwinds are appearing for this industry and are likely to dampen the current impressive growth rates of 25% per annum in the future.
“While the UK is a global leader in Open Banking, 2024 Open Banking transactions account for just 0.01% of the total.”
And while the UK is a global leader in Open Banking and Account-to-Account (A2A) transactions, last year’s impressive total of 264 million Open Banking transactions accounts for just 0.01% of all transactions in Britain.
No doubt, the introduction of Pay.UK’s New Payments Architecture (NPA) later this year will enhance growth in A2A transactions – but on current evidence, there’s a long way to go before Open Banking competes with cash – let alone cards.
What it Means For Issuers
For UK issuers, these trends imply that they should continue to innovate in the card space – especially when it comes to debit products, which are growing faster than wallets when measured in terms of pounds spent on these two payment methods.
Issuers should also be aware of competitors for their card business from non-financial entities with one late 2024 report from the IDC estimating that three-quarters of transactions could be processed by non-bank entities by 2030.
As a partner helping banks to improve their leadership in the card industry while also helping fintechs to establish and grow their presence, Worldline provides both banks and fintechs with the ability to innovate and differentiate their products for clients.
Worldline offers services across the card value chain, from issuing to management, processing and fraud protection, enabling issuers to manage the entire value chain off one platform.
Worldline’s card issuing services include prepaid cards, debit and credit cards, commercial cards, digital and virtual issuing, plus card tokenisation services as part of a suite of next-level fraud protections which includes industry-leading 3DS security and full compliance with the latest Strong Customer Authentication (SCA) standards.
Worldline’s transaction processing can support all the above functionalities thanks to a unified platform able to manage both debit and credit cards, whatever their currency.
Worldline provides issuers with a comprehensive suite of value-added services, including card activation, full compliance with scheme rules, a rich API catalogue, instalment payments and BNPL.
The company’s deep experience across Europe enables issuers to get products to market rapidly, with pricing that’s easy to understand and leverages the economies of scale available to one of Europe’s largest card services companies.
Learn more about partnering with Worldline for card issuing services
Source: Payments Card and Mobile
