The UK Redefines Payment Service Ecosystem in the Region
The United Kingdom had an estimated population of 67,886,011 as of the middle of 2020, according to UN data. Based on Worldometer elaboration of the latest UN data, the country had a population of 68,083,438 as of January 20, 2021, with 83.2% living in urban areas, mainly in London, Birmingham, and Liverpool. The median age of the population was 40.5 years. The United Kingdom's online population grew to 62.9 million by the end of 2019 from 62.5 million in 2018, according to the PPRO WECE Report.
The high levels of internet and smartphone penetration make the United Kingdom a well-established market for e-commerce. According to JPMorgan, a key feature of UK e-commerce is sophisticated consumers who are well versed in online shopping. The average annual revenue per paying user grew to $4,516 by the end of 2019 from $4,183.03 in 2019, according to the PPRO WECE Report. JPMorgan reported that UK retail e-commerce sales rose to €212.9 billion ($238.50 billion) in 2020 from €178.5 billion ($216.66 billion) in 2019. Most cross-border e-commerce purchases by Britons are of products from China, the United States, and Germany.
Most British shoppers prefer to pay by card (56%), followed by e-wallets, bank transfers, cash, and other payment methods. For cashless payments, the big players are Visa, PayPal, Mastercard and American Express, while new players include Klarna, PayPal, Apple Pay, and Google Pay. According to JPMorgan, use of Klarna's “buy now, pay later” feature is becoming more popular in the UK e-commerce market.
According to IMF data, the United Kingdom had a gross domestic product of $2.83 trillion in 2019, which declined to $2.64 trillion in 2020 due to the pandemic. As the economy continues to recover, the country's GDP is expected to expand to around $2.86 trillion in 2021.
Internet & mobile phone trends
According to the UK Office for National Statistics, 99.2% of people aged 16-44 have internet access, while only 46.8% of those aged 75 years and above go online regularly. According to Datareportal, there were 65 million internet users in January 2020, which increased by about 290,000 (+0.24 percent) since 2019, bringing the internet penetration rate to 96%. Meanwhile, smartphone penetration stood at 85% at the end of 2019, according to the PPRO WECE Report.
According to data compiled by learnbonds.com, 57.74 million people in the UK had bank accounts in 2019, with a banking rate of 66.65%, based on the country’s current population. Meanwhile, 65% of the population had debit or credit cards.