A new report, Making UK Payments Work for Everyone, carried out by Professor Alistair Milne of Loughborough University’s Business School and Professor Markos Zachariadis of the University of Manchester, says rapid technological change and the decline of cash are reshaping how people pay for goods and services – bank cards, crypto and digital apps.
Sponsored by the ATM network, LINK, the study argues that the country needs a clearer plan for the future and calls for leadership, smart design and inclusion to make sure ‘cashless’ works for everyone.
“The UK has been quick to adopt things like contactless cards, but it has fallen behind other countries, like Sweden or Brazil, in building new, widely available digital payment systems,” said Prof Milne.
“The UK government’s National Payments Vision (2024) set out ambitions for the future, but it isn’t clear enough about how to get there.
“If the UK doesn’t act soon with a joined-up plan, it risks falling further behind other countries in payment innovation, while also leaving vulnerable groups excluded.”
Prof Zachariadis, added: “Digital payments must be designed with inclusion and customer convenience at their core – only then can we build a system that truly serves the economy and respects the diversity of users across the UK.”
The report spells out four key drivers which could affect the future of cash and digital currencies in the UK:
- Cash is in decline: Only about 12% of payments in 2023 were made in cash, and businesses are increasingly reluctant to accept it. Politicians and regulators still say access to cash is important, but many shops and services now push people toward digital-only payments.
- Digital wallets are booming: In 2019, only 8% of card transactions used digital wallets like Apple Pay or Google Pay. By 2023, it was nearly a third. That shows how quickly people are embracing new technology.
- Fraud and security are big concerns: Fraud losses from scams where people are tricked into authorising payments peaked at over £500 million in 2021. Making digital systems secure is now a top policy priority.
- Inclusion worries remain: About 1.1 million UK adults don’t have a bank account, and many more rely on cash because they don’t have smartphones, good internet access, or confidence in digital systems.
The authors say the UK is now at a ‘decision point’. It can either keep muddling along with small, piecemeal changes, or it can create a ‘strategic roadmap’ to make payments better, safer and more inclusive.
The report sets three principles for the UK to follow:
- Leadership – Clear roles and responsibilities for government, banks, and regulators. Without leadership, innovation fails.
- Architecture – Building payment systems with shared standards, good governance, and sustainable business models. This means making sure systems work together (interoperability) and aren’t just left to chance.
- Inclusion – Ensuring digital systems are designed for everyone, including people who are financially vulnerable, unbanked, or digitally excluded.
The report also recommends making it easier for people to open basic bank accounts with less paperwork; providing simple digital alternatives to coins and notes – like stored-value cards; and developing public communication strategies to build trust in digital payments.
John Howells, the CEO of LINK, said: “To secure the UK’s future as a global leader in payments, we must move beyond fragmented fixes and commit to a long-term, inclusive strategy – one that puts consumers first, embraces innovation, and ensures no one is left behind.”
ENDS