A Close Look At The Evolution of UK Merchant Payments

The way people pay in the UK has changed dramatically in recent years. From the dominance of contactless “tap-and-go” spending to the continued rise of e-commerce and mobile wallets, merchants have had to adapt rapidly. At the same time, new point-of-sale technologies and regulatory requirements are reshaping how businesses accept payments. In this update, we explore the latest data and trends in UK merchant payments – covering contactless usage, booming online and mobile payments, adoption of new payment tech like smart terminals and Buy Now, Pay Later (BNPL), and key regulatory changes (such as Strong Customer Authentication and PCI DSS updates). The goal: to provide a fresh, insightful look at how UK merchant payments are evolving, backed by the most recent 2025 statistics and analysis.

Contactless Payments Now Dominant In-Store

Contactless card payments – tapping a card or phone to pay – have become the norm for in-person transactions in Britain. In 2024, there were 18.3 billion contactless payments in the UK, up from 17.0 billion in 2023. This represented 38% of all payments made in the country. In early 2025, 93% of all payment cards in circulation were contactless-enabled.

In March 2025 alone, Brits made 1.59 billion contactless card transactions – 76% of all debit card swipes and 63% of credit card swipes that month were via contactless. The value of spending via contactless has also surged, with £25.1 billion spent in that single month.

Mobile contactless (via Apple Pay, Google Pay, etc.) is increasingly used for high-value transactions. In 2024, 42% of UK adults were registered for mobile wallet services, and about one-third used them at least once a month.

E-Commerce and Online Payments Remain Strong

Digital commerce continues to thrive. As of early 2025, e-commerce accounts for over 26% of total UK retail sales, up from around 19% in 2019. Retail e-commerce revenue is projected to exceed £125 billion in 2025, with the majority of online purchases now made via smartphones.

UK consumers continue to shift toward mobile-first shopping, and merchants are responding with optimized mobile sites and app checkout experiences. PayPal, Apple Pay, and Google Pay remain the leading online payment options, valued for speed and security.

Mobile Wallets Are Now Mainstream

As of 2025, mobile wallets are a staple of everyday spending in the UK. Services like Apple Pay and Google Pay have widespread adoption, with smartphone usage at over 90% among UK adults. Nearly two in five adults now use mobile wallets regularly, and over two-thirds feel comfortable leaving their physical wallet at home.

This adoption extends beyond tap-to-pay. In-app and browser-based wallet checkouts are now expected by shoppers and often help reduce cart abandonment for merchants.

New Merchant Tech: Smart POS, SoftPOS, and BNPL

Merchants across the UK have embraced new tools:

• Smart POS & Tap to Phone – In 2024, Visa reported 320% growth in UK adoption of Tap to Phone. This lets merchants take contactless payments on their phones without dedicated hardware.

• BNPL Integration – Services like Klarna and PayPal Pay in 3 are now standard checkout options. During the 2024 holiday season, BNPL accounted for 13.9% of all online spending, with 50% of UK adults having used a BNPL option.

Regulations and Compliance: What’s Changed for 2025?

• PCI DSS 4.0 – Deadline for implementation is March 2025. Merchants must comply with new password rules, encryption requirements, and monitoring protocols.

• SCA (Strong Customer Authentication) – Fully enforced since 2022, SCA is now standard for UK e-commerce. Merchants have adopted 3-D Secure 2 and biometric exemptions.

• BNPL Regulation – Set to go live in 2025, BNPL will soon be treated as regulated consumer credit. Providers must assess affordability and ensure customer protections.

Final Thought

The UK payments landscape in 2025 is fast, digital, and evolving. With over 90% of adults using smartphones, 38% of payments made via contactless, and e-commerce maintaining a 26% market share, the way people pay is fundamentally different than just five years ago.

At Bright Edge, we help merchants stay competitive by offering modern payment solutions, smart terminal integrations, and the guidance needed to navigate regulation. Whether it’s tapping, swiping, or splitting with BNPL—payment innovation isn’t optional. It’s expected.

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