44% of UK consumers plan to use digital wallets

In recent years, digital wallets have become an essential tool for online payments, but their uses are rapidly expanding. In the UK, almost half of consumers (44%) expect to continue using digital wallets over the next three years, with Generation Z and Millennials leading the way.

According to a PYMNTS Intelligence report, “Digital Wallets Beyond Financial Transactions: UK Edition,” a collaboration with Google Wallet, British consumers are using digital wallets for much more than just simple transactions. The report examines the growing influence of digital wallets on 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 used for non-financial purposes. According to the report, 21% of UK 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 Generation Z and 27% of Millennials use their digital wallets while traveling.

Peer-to-Peer Transactions: The Change of Millennials and Generation Z

Peer-to-peer (P2P) transactions represent another area where digital wallets have gained significant traction. According to the report, 42% of UK consumers use digital wallets to pay online at retailers, while Millennials and Generation Z are leading the way in using wallets for P2P payments, including bill splitting at restaurants.

For example, the report shows that 19% of Generation Z and 12.5% ​​of Millennials regularly use digital wallets to split bills. As younger generations utilize this functionality, they are changing the way financial exchanges occur between their peers, making digital wallets essential for everyday financial management.

Digital wallets for identity verification

Another important development is the increasing use of digital wallets for identity verification, particularly among younger consumers. 88 percent of Generation Z respondents said they had to verify their identity in the past year – particularly when purchasing alcohol or tobacco.

Excluding younger users, 27% of UK consumers say they will use their digital wallets for identity verification in the next three years. This trend highlights 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 are becoming increasingly popular in the UK and are used for more than just payments. As adoption continues to increase, digital wallets are expected to become even more integrated into the consumer experience.