UK SMBs Fall Behind as In-Store Digital Wallet Use Jumps 549% YoY

Digital wallets are gaining popularity due to flexibility and convenience they offer, leading to an increasing number of consumers using them to pay for purchases in-store.

In fact, according to the 2023 Global Digital Shopping Index on “How Digital Can Help SMBs Punch Above Their Weight,” 48% more consumers across six countries — Brazil, India, Mexico, United Arab Emirates, the U.K. and the U.S. — paid in-store via digital wallet in 2022 than in 2021.

The U.K. recorded the most significant increase in in-store digital wallet use, with the share of in-store shoppers paying via digital wallet increasing 549% year over year. This growth was mainly driven by Apple Pay, which saw a 397% growth in use in the U.K. between 2021 and 2022.

But despite digital wallets’ increasing popularity and use, it appears not all small and medium-sized businesses (SMBs) are keen to cash in on the trend or tap into the opportunities they offer for business growth.

According to the PYMNTS-Cybersource report, which examines the four key reasons smaller merchants fall behind their larger competitors, almost 15% of SMBs across the six countries surveyed neither accept digital wallets in-store nor plan to begin doing so in the near future. And only 4.7% of small merchants who are not currently accepting them in-store plan to do so within the next three years.

The U.K. had the highest share of small businesses that do not accept digital wallets and have no intention of investing in digital wallet innovation anytime soon (24.8%), among all the countries studied.

And this is not the only area where British retailers have some catching up to do. A previous PYMNTS study revealed that U.K. eCommerce shoppers had the strongest preference for at-home delivery among all the shoppers surveyed, with nearly 80% of them having their purchases sent to their homes in 2021.

But here, too, the data shows that merchants are not doing enough to raise awareness about the options they provide, with only 39% of consumers saying they knew they could pick up an order at an in-store kiosk.

In an interview with Denise Burkett-Stus, head of Cybersource Europe, she suggested British retailers take a cue from Amazon and how it has mastered the art of last-mile delivery.

“Amazon will tell me exactly when I can have [a product] delivered and there’s no friction in my payment experience. My card details are stored there, and it just goes through. It’s perfect,” Burkett-Stus said.

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