44% of UK Consumers Plan to Use Digital Wallets Beyond Payments

In recent years, digital wallets have become an essential tool for making online payments, but their uses are quickly expanding. In the U.K., nearly half of consumers (44%) expect to continue using digital wallets in the next three years, with Gen Z and millennials leading the charge.

According to a PYMNTS Intelligence report, “Digital Wallets Beyond Financial Transactions: U.K. Edition,” a collaboration with Google Wallet, U.K. consumers use digital wallets for far more than simple transactions. The report explores the growing influence of digital wallets across various aspects of their daily lives.

Beyond Transactions: New Uses for Digital Wallets

While online payments remain the most common use for digital wallets, the technology is also being leveraged for non-financial purposes. According to the report, 21% of U.K. consumers have used their digital wallets for travel-related activities, such as presenting boarding passes or public transport tickets. This trend is popular among younger users: 37% of Gen Z and 27% of millennials use their digital wallets while traveling.

Peer-to-Peer Transactions: The Millennial and Gen Z Shift

Peer-to-peer (P2P) transactions represent another area where digital wallets have gained substantial traction. According to the report, 42% of U.K. consumers use digital wallets to pay merchants online, while millennials and Gen Z have pioneered the use of wallets for P2P payments, including splitting bills at restaurants.

For example, the report shows 19% of Gen Z and 12.5% of millennials regularly use digital wallets for bill-splitting. As younger generations embrace this functionality, they’re changing how financial exchanges happen among peers, making digital wallets indispensable for everyday financial management.

Digital Wallets for Identity Verification

Another key development is the rising use of digital wallets for identity verification, especially among younger consumers. Eighty-eight percent of Gen Z respondents reported needing to verify their identity in the past year — particularly for purchasing alcohol or tobacco.

Beyond younger users, 27% of all U.K. consumers say they will use their digital wallets for identity verification in the next three years. This trend underscores the potential for digital wallets to replace traditional physical IDs for a variety of uses, from banking transactions to entry into restricted venues.

Digital wallets in the U.K. are gaining traction and are being used for more than just payments. As adoption continues to grow, digital wallets are expected to become even more integral to consumer experiences.