The availability and use of digital and contactless payments increased during the 2020 pandemic, driven by the need for more hygienic contactless payment options and a large proportion of retail being forced online amidst lockdowns. After reviewing 102 UK retailers across several product categories, we found that 92% of UK retailers offered at least one digital payment option, and 51% also included deferred payments options (e.g., Klarna). More details of the evaluation can be found here, and key takeaways include:

  • PayPal is still the most widely adopted alternative payment method in UK retail. More than half of UK online adults have used PayPal in the past three months, and more than 80% of the retailers we evaluated accept PayPal.
  • Deferred payment usage remains low but is growing among retailers and consumers. The adoption of deferred payments has grown slightly among UK consumers since 2019, and there was a small uptick in adoption amid the pandemic in 2020. Retailers have noticed the trend, and half of UK retailers we reviewed offer a deferred payment on their site.
  • Young consumers use digital payments more often than their older counterparts. Apart from PayPal, the adoption of digital and deferred payments is higher among consumers under 35 years of age.

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