As cross-border commerce accelerates, digital wallets are emerging as a key driver of innovation — but in the UK, a gulf remains between merchant enthusiasm and consumer hesitancy.
A new data brief, Global Money Movement: UK Edition, produced by TerraPay, sheds light on the current state of digital wallet adoption and reveals the challenges and opportunities shaping the landscape.
Merchants Are Ready. Consumers Are Not — Yet
The research paints a tale of two user bases.
Among UK businesses making cross-border payments, 85% report being highly familiar with digital wallets, with over half actively using them.
In contrast, just 58% of consumers report similar familiarity.
UK consumers’ familiarity with cross-border payment methods
Even more striking is that debit cards remain the most recognised cross-border payment tool among consumers — far ahead of digital wallets.
This knowledge gap is more than academic.
Familiarity is a strong predictor of usage: consumers who understand digital wallets are 30% more likely to use them.
The implication is clear — without greater public awareness, the digital wallet revolution risks stalling at the gates of the retail mainstream.
Generational Divide: Gen Z and Millennials Lead the Way
Younger consumers are driving early adoption. Among Generation Z users who make cross-border payments, 58% use digital wallets, closely followed by millennials at 55%.
In contrast, fewer than half of Gen X and baby boomer consumers have taken the plunge.
Importantly, usage does not appear to be confined to high-income earners.
Adoption rates are consistent across income brackets, with 49% of consumers earning under $50,000 having used digital wallets for cross-border payments.
This underscores the broader appeal of the technology — but also points to untapped potential if awareness barriers are broken down.
Businesses See Efficiency Gains
For merchants, the appeal is largely functional. Digital wallets offer speed and operational efficiency in processing payments.
Among businesses not yet using them, 65% cite faster transactions as a key incentive to adopt, while 41% are attracted by their growing acceptance.
Cost efficiency is another draw, with 37% citing lower fees as a motivator.
Adoption is also widespread across business sizes.
Whether a small firm earning under $500,000 or a larger entity exceeding $2.5 million in annual revenue, usage rates hover around the same level.
Digital wallets are not a tool solely for fintech-savvy start-ups; they are increasingly viewed as a standard payment rail.
Security and Ubiquity Still Matter
Despite positive momentum, significant barriers remain.
For UK consumers not using digital wallets for cross-border payments, the primary obstacle is simply not knowing they exist — cited by nearly one-third of respondents.
Security concerns follow close behind, particularly for older users and business leaders.
Among businesses that have yet to adopt digital wallets, 39% cite security as their chief concern, and 27% are discouraged by the lack of standardisation across the industry.
Meanwhile, 22% of consumers refrain from using digital wallets because either the sender or the recipient cannot access them — a reminder that ubiquity is as vital as innovation.
Bridging the Gap
The opportunity for digital wallets in the UK is undeniable, but fully realising their potential hinges on consumer education and ecosystem consistency.
Closing the knowledge gap must be a priority for financial institutions, fintechs, and regulators alike.
User awareness campaigns, transparent security protocols, and interoperability across providers can help accelerate adoption.
Equally, merchants can play a catalytic role.
By offering digital wallet options at checkout and highlighting the benefits — such as speed, convenience, and potential cost savings — businesses can help normalise their use among customers.
Looking Ahead
Digital wallets have the capacity to redefine the nature of cross-border payments in the UK.
With broad merchant uptake already in motion and younger generations embracing the technology, the groundwork is laid.
What’s needed now is a concerted effort to build consumer trust and awareness.
If executed effectively, this transformation could render international money movement not only faster and cheaper but fundamentally more inclusive — marking a step-change in how Britain engages with the global digital economy.
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