Digital wallets: Why UK shoppers love Apple Pay, Google Pay & PayPal
A digital wallet (sometimes referred to as an e-wallet) is a software-based system that securely stores a user's payment information, such as credit/debit card details and bank account information. Users can make payments using their digital wallets, typically through a smartphone, computer, or smartwatch, without the need for their physical payment card.
The digital wallet appeal
Research by Finder revealed that 2 in 5 online purchases in the UK (40%) were made using a digital wallet in 2024. This is expected to rise to 3 in 5 (68%) by 2030. The popularity of digital wallets for e-commerce transactions comes as little surprise, given the myriad of benefits for consumers:
- Faster checkout experience: Digital wallets eliminate the need to manually enter card details and billing information, allowing consumers to complete their purchase using a face/fingerprint scan, or password. This convenience leads to a smoother shopping experience, especially on mobile.
- Mobile-first: Mobile sales are becoming increasingly dominant in the e-commerce landscape, accounting for approximately 56% of e-commerce retail sales in 2023, and are expected to rise to around 57.6% by 2027. Digital wallets streamline the checkout process on small device screens, where entering long card details can be tedious.
- Enhanced security: As concerns about online fraud continue to rise, UK consumers trust digital wallets to keep their financial information safe. Digital wallets use additonal security measures such as encryption and tokenization, combined with biometric authentication, which can help reduce the risk of fraud compared to manually entering card details.
- Flexibility: Some digital wallets integrate loyalty rewards, discounts, and payment flexibility into their service, making them an attractive option for budget-conscious consumers. PayPal, for example, offers eligible customers the option to spread purchases over three instalments with its ‘Pay in 3’ feature. This is a form of credit and may not be suitable for everyone. Credit is subject to status and terms apply. Representative APRs and eligibility criteria should be reviewed on PayPal’s official website.
Popular digital wallets
Finder’s research also determined the most relevant digital wallets for UK e-commerce SMEs: Apple Pay (used by 63% of consumers), Google Pay (37%), and PayPal (36%).
Apple Pay
Apple Pay is a digital wallet built into iOS devices (iPhone, iPad, Mac, Apple Watch, and Apple Vision Pro), and many shoppers who own devices in the Apple ecosystem enjoy the frictionless experience of making online payments with Apple Pay. Users can add multiple debit and/or credit cards to their wallet and pay instantly using Apple’s biometrics, Face ID or Touch ID, or with their device's passcode.
Personal data is protected using a device-specific number and unique transaction code, so the user’s card number is not stored on their device or Apple’s servers during the payment process.. Users can even request to hide their email address when paying online, sending the merchant a unique, random email address that automatically forwards communications to their personal inbox.
Google Pay
Google Pay is a digital wallet available on Android and Chrome devices, allowing users to securely pay with their saved card details online and in apps, using their fingerprint, number PIN, or pattern. With Google being a familiar and trusted name, many shoppers feel confident making purchases using a payment method tied to their Google account.
Similar to Apple Pay, Google Pay sends a virtual account number to the merchant, keeping the user’s payment information secure. All saved payment methods are securely stored on Google’s private servers, and the payment data is encrypted when making an online transaction, ensuring it stays safe in transit.
PayPal
PayPal is one of the most recognised online payment brands. Its digital wallet allows users to store debit and credit card information, and bank details, which can then be used to pay for online transactions. Unlike Apple Pay and Google Pay, which are somewhat limited to certain manufacturers’ devices, the PayPal app can be downloaded onto any smartphone, and users can also log into their PayPal account on any computer or tablet.
PayPal is a trusted provider, and its digital wallet transactions are equally as secure as Apple and Google’s offerings. All transactions are encrypted to keep financial information private, and full financial details are not shared with the merchant. Users can also benefit from PayPal Buyer Protection, a reimbursement scheme for eligible purchases that don’t arrive, or fail to match the seller’s description. This scheme is another reason that many consumers prefer to pay for online transactions with PayPal’s digital wallet.
Why SMEs should offer digital wallets
For SMEs, offering digital wallets at checkout is a low-effort, high-impact way to increase revenue and improve the overall shopping experience for customers:
- Reduce cart abandonment: One of the top reasons online shoppers abandon their carts is not seeing their preferred payment option at checkout, so neglecting digital wallets from your available payment methods could be costing you sales. With one in five UK card users (20%) now using a digital wallet for more than 50% of their card transactions, the demand is clearly present.
- Increase trust and loyalty: Big names like Apple, Google, and PayPal have strong brand recognition, and these familiar payment options signal trust and legitimacy to customers. This is especially important for lesser-known SMEs, bridging the trust gap between consumers and smaller e-commerce retailers. For this reason, offering digital wallets at checkout can not only increase conversion, but also boost customer loyalty.
- Converting mobile-first consumers: With mobile commerce rapidly growing in the UK, this demographic of shoppers expects fast, seamless payments. Providing mobile-friendly options like digital wallets can help capture more mobile sales.
- Reduce payment errors: Auto-filled payment details and the secure authorisation offered by digital wallets reduce failed payments and chargebacks.
Stay ahead of the curve with digital wallets
The use of digital wallets for e-commerce transactions in the UK is growing, and it shows no sign of slowing down! To stay competitive, SMEs should consider adopting digital wallets to enhance the checkout experience.
In a competitive market, enabling digital wallets is a powerful way to enhance the customer experience, and the right payment service provider can make the integration as simple as possible.
Apple Pay, Google Pay, and PayPal are registered trademarks of their respective owners. This content is not endorsed by or affiliated with these companies.