UK Mobile Payment Adoption Reaches Two-Thirds of Adults as Cash Decline Slows
Two-thirds of UK adults now use mobile payment services, accelerating the shift to a digital economy while highlighting the need for retailers and banks to maintain physical cash infrastructure for lower-income consumers.
Two-thirds of adults in the UK registered for at least one mobile payment service last year, marking a major milestone in the country's transition to a digital economy. This surge in digital wallet adoption coincides with a deceleration in the decline of physical cash, indicating that notes and coins will remain a relevant payment mechanism for the foreseeable future.
For financial institutions and retailers, this data underscores the necessity of maintaining a dual-track payment infrastructure. While digital transaction volumes scale rapidly, the persistent demand for physical currency among specific demographics means companies cannot entirely abandon cash handling operations without risking alienation of lower-income consumers.
The annual UK Payments Market report from banking trade body UK Finance reveals that debit cards, including those loaded onto mobile devices, accounted for 54% of all payments in 2025. Contactless transactions made up 39% of the total. Nine in 10 mobile wallet users set their debit card as the default payment method, highlighting the use of smartphones for everyday consumer spending rather than just high-value purchases.
Adoption is heavily skewed by age, as more than 80% of consumers aged 16 to 34 make regular mobile payments compared to just 22% of individuals over 65. However, older age groups are steadily gaining ground. "Our latest data show that the UK is now a predominantly digital economy when it comes to making and receiving payments," said Adrian Buckle, head of research at UK Finance.
Despite the digital shift, physical cash remains deeply embedded in the financial habits of millions. Notes and coins were used in 3.9 billion transactions, representing 8% of all payments last year. UK Finance forecasts that this volume will halve to 4% of all payments, or two billion transactions, by 2035.
Nearly 50 million people utilized cash machines last year, demonstrating ongoing reliance on physical currency. Nick Quin from Link, which oversees the UK ATM network, emphasized that lower-income individuals depend heavily on physical money to manage their daily budgets. He noted that the network's objective is to maintain cash access for as long as these consumers require it.
The broader payment landscape also highlights the marginalization of legacy systems. Cheques were originally slated for a 2018 phase-out following parliamentary intervention but now account for a mere 0.2% of all UK payments. A total of 77 million cheques were written last year.
