More than half of adults in the UK are using mobile wallets as older generations increasingly adopt the technology, with cash payments falling below 10% of the total number of payments made in the UK.
In its latest report, which plots the advance of digital finance at the expense of traditional methods, banking industry body UK Finance said it expects cash to fall to 4% of payments and cheques to just 0.1%.
Its headline figure revealed that 57% of UK adults used mobile wallets on their smartphones to make payments in 2024, up from 42% in 2023. Mobile wallets are apps that enable customers to make payments using their mobile phones.
Three-quarters of adults also used smartphone-based banking apps to access their accounts last year, overtaking desktop banking for the first time.
UK Finance also reported a decline in the use of cash, which accounted for less than 10% of the 48.6 billion payments made in 2024. About 1.2 million people relied mainly on cash for everyday spending last year, down from 1.5 million in 2023.
Adrian Buckle, head of research at UK Finance, described 2024 as a year of firsts. “More than half of UK adults used mobile wallets, mobile banking overtook desktop as the main way people access their accounts, and cash fell below 10% of all payments,” he said.
Buckle added that mobile wallets are also being adopted across older age groups, highlighting “how digital payments are becoming more mainstream across the board”.
In 2024, contactless payments accounted for 39% of all payments, compared with 3% in 2015 and 21% in 2019. UK Finance expects contactless payments to account for 43% of all payments in the UK by 2034.
The banking industry body said mobile wallets are replacing contactless cards for many payments as users become converts.
“Users who register for a mobile wallet service quickly seem to become frequent users, and where contactless card payments replaced what were once low-value cash payments, now contactless mobile payments appear to be replacing contactless payments initiated using a physical card,” said the UK Finance report.
Young people still lead the use of mobile wallets, with 88% of 16- to 24-year-olds using them in 2024, although there was an increase in take-up among the 65 and over age group, with a 14% increase in registrations between 2023 and 2024. A quarter are now registered.
Fintechs offering buy now pay later (BNPL) services also saw increased adoption, with a quarter of UK adults using them in 2024, up from 14% in 2023.
The Covid-19 pandemic spurred the take-up of digital banking methods, such as contactless and the use of mobile wallets. When the pandemic took hold, people were told to limit physical contact, including reducing their use of cash. Contactless payment technology, as the name suggests, was an ideal replacement for cash because, unlike mobile phone payment apps, most people already used payment cards. This led groups of people such as the elderly, usually slow to adopt the latest technology, to take it up.
