Future Trends in Digital UK Payments

Pictured: Nicolai Chamizo.

In recent times, there has been a growing appetite for swift and seamless digital payment solutions. This surge in demand reflects current preferences and provides a tantalising preview of the forthcoming landscape of digital transactions. As we delve into this topic, we'll explore how emerging digital technologies are poised to further advance and shape the trajectory of this ever-evolving payment ecosystem.

Here are five digital payment trends to look out for.

Digital Currencies
Ignoring private-sector cryptocurrencies, we’re looking at a digital national currency called CBDCs. Up to 60% of central banks are considering releasing this currency, including the Bank of England. The BoE is considering issuing a country-wide digital currency in pound sterling.

Cross-Border Payment
The breakdown of extended global transfer times is among the top digital payments to watch. Such services as the Faster Payments network can see transfers between countries completed in close to real-time. The market rates are competitive, too.

QR Code Payments
Digital mobile payments have proven particularly popular, with shoppers turning to peer-to-peer apps and digital wallets. However, we’re also seeing an increase in QR code payments. Diners, for example, can view menus simply by scanning the restaurant’s QR code. They can also place their order and pay the final bill using that same method.

AI-Assisted Security
Whether we’re talking mobile wallets or smart speakers, such digital forms of payment call for a transference of sensitive financial information. Unfortunately, scammers are always looking to exploit this, which results in increased security.

Many card networks and banks already use machine learning and artificial intelligence to help keep financial details safe. Aided by machine learning, automated systems are improving when recognising unusual transactions.

Increased Use of Biometrics
Smartphones include such built-in biometric features as facial recognition and fingerprint scans. We expect other biometric features to be included in new smart devices, like heartbeat analysis and iris scanners.

Buy Now, Pay Later
Those who run e-commerce businesses will know of Klarna and Afterpay. These brands allow online shoppers checking out to divide their purchases into multiple instalments with either no or low interest. It’s been predicted that close to one in four e-commerce transactions will be paid for with Buy Now Pay Later by the year 2026, with a year-on-year growth.

Embedded Finance
Embedded finance is also seeing rapid growth. After all, this generation is used to invisible payments in video games. There should be some caution here, however, as some cohorts are at risk of financial exclusion. An approach that increases friction during checkout is countered by one that reduces it. How these two approaches will develop in the same space will be interesting to watch.

Home Assistants
Yes, people may already use such devices as Amazon's Alexa, Apple's Siri, and Google Assistant to play music or turn the temperature at home up and down. But they can also use them to buy things online or through a connected app. By connecting an online account to a smart speaker, users can make contactless and hands-free payments.

Digital Payments Are an Ongoing Conversation
Financial backing is more accessible than ever, largely thanks to VCs such as Nicolai Chamizo, whose belief in the mission of ambitious and innovative fintech startups is helping to shape our evolving financial ecosystem.

Conversations will continue as payment professionals seek to uncover new methods of payment they can deliver to their customers and clients while also considering innovations in the marketplace. Consider Brite Payments, a company that raised some $60 million in VC funding thanks to their payment method that involves no cards or sign-ups. The evolution of digital payments is set to continue through increased convenience and more high-tech security.