2022
9
UK Money Market Report 2022
2022-09-06T04:05:03+01:00
OX1101811
2195
155452
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Report
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“Although contactless and mobile payments continue to grow, consumer sentiment towards a cashless society is more negative than positive. There is strong interest in payment innovations amongst younger people, including…

UK Money Market Report 2022

£ 2,195 (Excl.Tax)

Description

The UK Money Market Report identifies consumers’ attitudes towards the future of the pound including a cashless society, purchasing habits of cryptocurrency, and payment innovations in the UK money market. This report covers the UK money market size, market forecast, market segmentation and future trends of money.

Current Money Market Landscape 

The rising cost of living could lead some people to turn back to cash as a primary payment method as it can be easier to keep track of spending due to the tangible nature of notes and coins. While there has been a general shift towards digital payments in the money market, exacerbated by the need for hygiene during the COVID-19 pandemic, cash continues to play an important role in the future of money.

Indeed, consumers are more pessimistic than positive about the idea of an entirely cashless society, with people citing over-reliance on technology, a reduced meaning of money and a lack of privacy.

 

The Future of Money: Key Industry Trends

There has been a surge of consumers researching the cryptocurrency market. Its usage is high among 16-25-year-old males, of whom 30% bought cryptocurrency between 2021-22.

The biggest threat to the cryptocurrency market is the complexity leading to a lack of understanding for the average consumer. It is difficult for most people to identify the scams, with several high-profile examples having caught out experienced investors.

  • 11% of UK consumers have researched cryptocurrency.
  • 41% of the UK public are pessimistic about a cashless society in the future.
  • 37% of UK consumers agree that the biggest benefit of a cashless society would be faster transactions.
  • 40% of UK public are concerned that a cashless society places over-reliance on technology.

 

Future Innovation in the UK Money Market

There are opportunities for innovation in the future of money and expenditure, with younger demographics particularly keen to embrace change and a cashless society. This will include the expansion of wearable technology payments, including smartwatches and smart rings, while in-app payments with QR codes will also grow.

Checkout-less stores are expanding, largely driven by Amazon, with the company even trialling palm scan payments in the US. Long term, there are opportunities for the cryptocurrency market to provide faster, free cross-border payments if prices stabilize and regulation is brought in to boost consumer trust.

Read on to discover more about the UK Money Market, read our UK Consumer Payment Preferences Market Report or take a look at our other Financial Services Market Research Reports.

 

Quickly Understand

  • Consumer attitudes towards a cashless society.
  • Purchasing habits and use of cryptocurrency and NFTs in the last year.
  • Barriers to buying and using cryptocurrency.
  • Future expansion of the cryptocurrency market.
  • Attitudes towards payment innovations such as checkout-less stores and wearable device payments.
  • Factors that would drive the use of bank branches.
  • Attitudes towards the future of money and the future of the pound.

 

Covered in this Report

Brands:  Apple (Apple Pay, Apple Watch), Google Pay, Klarna, Clearpay, Paypal, Bitcoin, Britcoin, Facebook, Digital Euro, e-euro, Crypto-Dollar, Digital Yuan, Ethereum, Litecoin, Barclays, Natwest, Amazon (Amazon Go, Amazon Fresh), Tesco, Get Go, Ringpay, Sainsbury’s, Tapster, K Ring, Quontic, Cash App, Revolut, MoonPay, MasterCard, ApeCoin, Visa, Zumo, Coinbase, Post Office, HSBC, Lloyds, Santander, TSB, Danske.

 

Expert Analysis from a Specialist in the Field

This report, written by Adrian Reynolds, a leading senior analyst in the Financial Services sector, delivers in-depth commentary and analysis to highlight current trends in the money market and add expert context to the numbers.

“Although contactless and mobile payments continue to grow, consumer sentiment towards a cashless society is more negative than positive. There is strong interest in payment innovations amongst younger people, including checkoutless stores and in-app payments through QR codes. Despite the recent market crash, cryptocurrency remains of great interest to many consumers, and younger males in particular. The market will continue to grow as more cryptocurrency payment options become available, but mainstream adoption will be limited by the lack of regulation and price volatility.”

Adrian Reynolds
Senior Finance Analyst – Financial Services

Table of Contents

  1. Overview

      • Key issues covered in this Report
        • Definitions
          • Market context
          • Executive Summary

              • The market
                • Growing concern over finances could delay payment innovation
                  • Figure 1: Consumer financial sentiment, 2021 and 2022
                • Cash is here to stay for some time yet
                  • Figure 2: Payment method frequency, 2021
                • Latest cryptocurrency crash could increase consumer caution
                  • Figure 3: Bitcoin price, 2016-22
                • The consumer
                  • A third of consumers are positive about a cashless society
                    • Figure 4: Cashless society sentiment, 2022
                  • Speed is key when it comes to payments
                    • Figure 5: Benefits of a cashless society, 2022
                  • A technological step too far?
                    • Figure 6: Drawbacks of a cashless society, 2022
                  • Only one in 10 people bought cryptocurrency in the last year
                    • Figure 7: Use of cryptocurrency and NFTs, by gender, 2022
                  • Cryptocurrency brands must boost consumer understanding of a complex market
                    • Figure 8: Barriers to cryptocurrency, 2022
                  • Bitcoin leads the way but consumers are sceptical
                    • Figure 9: Preferred cryptocurrency, 2022
                  • Central bank has the most trust if independent from government
                    • Figure 10: Trust in managing UK finance, 2022
                  • Strong interest in checkoutless stores as supermarkets innovate
                    • Older demographics have far greater affinity to the pound
                      • Figure 11: Attitudes towards the future of money and payment innovation, 2022
                  • Issues and Insights

                    • A cashless society is some way off with consumers demanding choice
                      • Cryptocurrency will struggle for mainstream adoption without regulation and price stability
                        • Use payment innovations to help consumers through the cost-of-living crisis
                        • Market Drivers

                          • Cash is here to stay for some time yet
                            • Figure 12: Payment method frequency, 2021
                          • Growing concern over finances could delay payment innovation
                            • Figure 13: Consumer financial sentiment, 2021 and 2022
                          • Consumers are comfortable with payment options but there is an appetite for innovations
                            • Figure 14: Attitudes towards payment methods, 2021
                        • Market Background – Cryptocurrency and NFTs

                          • What is cryptocurrency?
                            • A brief history of Bitcoin
                              • Concerns over carbon footprint will make sustainability key for cryptocurrency
                                • Bitcoin continues to dominate but there are over 10,000 cryptocurrencies
                                  • Dogecoin highlights the confusion over valid projects
                                    • Figure 15: The 10 most valuable cryptocurrencies, by market capitalisation, 2022
                                  • Latest cryptocurrency crash could increase consumer caution
                                    • Popular Terra Luna coin loses nearly all of its value
                                      • Figure 16: Bitcoin price, 2016-22
                                    • What are NFTs?
                                      • Figure 17: Example of Bored Ape Yacht Club NFT #8817
                                    • NFTs are also creating environmental concerns
                                      • The NFT market has experienced high-profile price crashes
                                      • Regulatory and Legislative Changes

                                        • FCA given expanded powers on access to cash as branches close
                                          • The FCA’s Consumer Duty could have implications for cryptocurrency
                                            • Cryptocurrency exchanges coming under scrutiny of Advertising Standards Authority
                                              • ASA takes action on NFT promotion
                                                • Figure 18: Michael Owen’s NFT tweet
                                              • National cryptocurrency plans on hold as House of Lords says no to Britcoin
                                                • Bitcoin tipping app Bottlepay receives approval from the FCA
                                                  • Binance fined in Netherlands and warned in the UK
                                                  • Launch Activity and Innovation

                                                    • App payments could drive checkoutless shopping
                                                      • Figure 19: Sainsbury’s SmartShop Pick & Go
                                                    • Smart jewellery and payment rings could disrupt in-store purchasing
                                                      • London café becomes the first to offer cryptocurrency payments
                                                        • Revolut looks to boost customer cryptocurrency understanding
                                                          • Block’s Cash App adopts Lightning Network for free Bitcoin payments
                                                            • Cryptocurrency wallet Zumo launches card payments
                                                              • MoonPay and MasterCard expand card payment options for NFTs
                                                                • Coinbase launches NFT marketplace
                                                                  • Popular NFT communities are driving creation of new cryptocurrencies
                                                                    • Tiffany & Co utilises NFTs to sell unique pendants
                                                                      • Figure 20: Tiffany & Co’s NFT campaign
                                                                    • Banks and the Post Office move to protect consumer access to cash
                                                                    • Attitudes towards a Cashless Society

                                                                      • A third of consumers are positive about a cashless society
                                                                        • Figure 21: Cashless society sentiment, 2022
                                                                      • Younger demographics are more positive but there is still caution
                                                                        • Figure 22: Cashless society sentiment, by gender and age, 2022
                                                                      • Speed is key when it comes to payments
                                                                        • Record of transactions is a double-edged sword for many consumers…
                                                                          • …but could play a key role in driving Open Banking
                                                                            • Figure 23: Benefits of a cashless society, 2022
                                                                          • A technological step too far?
                                                                            • Figure 24: Drawbacks of a cashless society, 2022
                                                                        • Cryptoasset Activity

                                                                          • Only one in 10 people bought cryptocurrency in the last year
                                                                            • Men are far more likely to be attracted to cryptocurrency investments
                                                                              • The reliance on cryptocurrency has limited NFT purchasing to 3%
                                                                                • Figure 25: Use of cryptocurrency and NFTs, by gender, 2022
                                                                              • Nearly half of 16-34 year olds are active in the cryptoasset market
                                                                                • Cryptocurrency market must engage women to become a viable payment option
                                                                                  • Figure 26: Use of cryptocurrency and NFTs, by age, 2022
                                                                              • Barriers to Cryptocurrency

                                                                                • Cryptocurrency brands must boost consumer understanding of a complex market
                                                                                  • Difficulty in identifying scams will continue to put people off
                                                                                    • Price volatility continues to be a major issue
                                                                                      • Regulation will be vital for mainstream adoption
                                                                                        • Figure 27: Barriers to cryptocurrency, 2022
                                                                                      • Regulation is a far greater concern for older demographics
                                                                                        • Figure 28: Barriers to cryptocurrency, by age, 2022
                                                                                    • Preferred Cryptocurrency Options

                                                                                      • Bitcoin leads the way but consumers are sceptical
                                                                                        • There is potential for a national cryptocurrency
                                                                                          • Figure 29: Preferred cryptocurrency, 2022
                                                                                        • The majority of 16-34 year olds would use cryptocurrency in the future
                                                                                          • Figure 30: Preferred cryptocurrency, by age, 2022
                                                                                      • Trust in Managing Currency

                                                                                        • Central bank has the most trust if independent from government
                                                                                          • Trust in retail banks puts them in a strong position to facilitate new forms of money
                                                                                            • Trust in private companies will vary from brand to brand…
                                                                                              • …but Amazon is well placed to impact the cryptocurrency market
                                                                                                • Figure 31: Trust in managing UK finance, 2022
                                                                                              • Young people trust retail banks more than the central bank
                                                                                                • Figure 32: Trust in managing UK finance, by age, 2022
                                                                                              • Strong desire for decentralisation highlights potential for cryptocurrency
                                                                                                • Figure 33: Attitudes towards decentralised currency, by age, 2022
                                                                                            • Attitudes towards Payment Innovations

                                                                                              • Strong interest in checkoutless stores as supermarkets innovate
                                                                                                • Amazon could bring palm payments to the UK with Amazon One
                                                                                                  • Figure 34: Attitudes towards checkoutless stores, by age, 2022
                                                                                                • Encourage customers to rethink the need for plastic cards
                                                                                                  • Figure 35: Relying on virtual cards – CHAID – Tree output, 2022
                                                                                                  • Figure 36: Attitudes towards smartphone payments, by age, 2022
                                                                                                • Smartwatch and smart jewellery payments are popular among the young
                                                                                                  • Figure 37: Attitudes towards wearable technology payments, by age, 2022
                                                                                              • Attitudes towards the Future of Money

                                                                                                • The cost-of-living crisis could drive Open Banking take-up
                                                                                                  • Figure 38: Attitudes towards sharing financial data, by age, 2022
                                                                                                • Utilise QR code payments and discounts to drive brand app use
                                                                                                  • Figure 39: Attitudes towards brand app payments, by age, 2022
                                                                                                • Older demographics have far greater affinity to the pound
                                                                                                  • Figure 40: Attitudes towards the future of the pound, by age, 2022
                                                                                                • Employers could look to offer younger workers cryptocurrency options
                                                                                                  • Figure 41: Attitudes towards cryptocurrency income, by age, 2022
                                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                  • Abbreviations
                                                                                                    • Consumer research methodology
                                                                                                    • Appendix – CHAID

                                                                                                      • Methodology
                                                                                                        • Figure 42: The Future of Money – CHAID – Table output, 2022

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