Marqeta Study: UK Consumers Embracing Embedded Finance As New Payment Solutions Reach Mainstream Adoption

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06/06/2023 - 03:00 AM

Survey reveals that 72% of UK mobile wallet users surveyed have now made a purchase via a retailer’s embedded mobile app.
Almost half of UK respondents would consider getting financial services from non-financial providers including tech companies, social networks or retailers.
77% of UK respondents have no intention of leaving their primary bank provider, but balance loyalty with desire for superior user experience.

LONDON--(BUSINESS WIRE)-- Embedded finance has become increasingly mainstream in the UK, with consumers craving convenience in ever-greater numbers when it comes to payments, according to a new study from Marqeta (NASDAQ: MQ), the global modern card issuing platform. The company’s 2023 State of Payments report released today - surveying 4,000 consumers across three continents, including 1,000 in the UK - reveals how consumers are no longer treating embedded finance and digital financial services as a novelty, but are instead embracing the value that they can bring to their lives.

The digital technology blending both the physical and virtual worlds is changing everything from how people interact with one another to the businesses consumers frequent, but nowhere is the pace of change currently so rapid as in the world of financial services. One way businesses, banks, and fintechs are meeting changing consumer financial demands is through embedded finance with capabilities such as in-app payments or buy-now-pay-later (BNPL) services being integrated into the purchasing experience.

Marqeta’s 2023 State of Payments report, an annual survey of consumers about their purchase preferences, shows the confidence that consumers have in new digital payment technology and embedded finance. The study reveals that 72% of UK mobile wallet users surveyed have made a purchase via a retailer’s embedded mobile app owing to the enhanced experience. Almost three-quarters (73%) of UK mobile wallet users surveyed went on to share that they would feel confident enough to leave their wallet at home, and only rely on their phone for making payments.

Confidence extends to digital payment processes with 76% of UK respondents stating that they will always add a new card to their mobile wallet, and 89% believing this to be a “simple” process, up from 81% in 2022. As a result, 93% of UK mobile wallet users surveyed reported having one or more cards loaded into their mobile wallet. Beyond this, mobile payment methods continued to rise in popularity as convenient, frictionless payments took precedence:

73% of UK consumers surveyed reported using peer-to-peer (P2P) payment transactions at least once
95% of UK consumers surveyed reported using contactless payments in the past 12 months
68% of UK consumers surveyed reported using a mobile wallet in the last 12 months
65% of UK consumers surveyed believe cash will disappear completely, with a further 44% believing this will happen within the next 10 years.

“Embedded finance is enabling brands to become financial service providers, offering consumers more streamlined payment experiences,” said Jeff Parker, SVP and Managing Director, International at Marqeta. “What our report shows is that after years of massive digital innovation, consumer confidence in modern, embedded payment methods is high and companies who don’t offer these can miss out on future adoption.”

Marqeta’s study goes on to show that, while demand for digital and embedded finance services is moving into mainstream adoption, when it comes to banking preferences, UK consumers remain resolutely committed to their primary or traditional banks. Eighty-four percent of respondents said they used traditional banks as their primary providers, with 41% stating that they had remained with their bank for over 10 years. A further 77% of those surveyed said they had no intention of changing their primary banking provider. The vast majority of respondents use their primary bank provider for debit card (77%) or savings account (53%) services.

Notably, however, UK consumers are balancing their loyalty to their primary banking providers with their desire for superior user experiences for certain capabilities. The Marqeta study reveals that 43% of UK respondents would now consider getting financial services from non-financial providers including tech companies, social networks or retailers.

Parker continues, “We’re at an inflection point when it comes to legacy providers coexisting with new-age payment services. While our report shows a current balance between traditional and digital-first, embedded finance is challenging companies to think about how they build payment solutions into their offerings. Long-term consumer loyalty will depend on who can provide the most exceptional end-to-end user experiences.”

Download the full report here.

About the research
The survey was performed on behalf of Marqeta by Propeller Insights, in February 2023. Marqeta surveyed 4,091 consumers (2,013 in the United States, 1,013 in Australia, 1,065 in the UK) between the ages of 18 and 64.

About Marqeta
Marqeta’s modern card issuing platform empowers its customers to create customized and innovative payment cards. Marqeta’s platform, powered by open APIs, gives its customers the ability to build more configurable and flexible payment experiences, accelerating product development and democratizing access to card issuing technology. Its modern architecture provides instant access to highly scalable, cloud-based payment infrastructure that enables customers to launch and manage their own card programs, issue cards and authorize and settle transactions. Marqeta is headquartered in Oakland, California and is certified to operate in 40 countries globally. For more information, visit www.marqeta.com, Twitter and LinkedIn.

Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements expressed or implied in this press release include, but are not limited to, quotations and statements relating to changing consumer preferences; increasing consumer adoption of certain digital payment methods, products, and solutions; which payment, banking, and financial services products and solutions may succeed; technological and market trends; Marqeta’s business; Marqeta’s products and services; and statements made by Marqeta’s senior leadership. Actual results may differ materially from the expectations contained in these statements due to risks and uncertainties, including, but not limited to, the following: any factors creating issues with changes in domestic business, market, financial, political and legal conditions; the effect of and uncertainties related to the global COVID-19 pandemic on U.S. and global economies and demand for Marqeta’s services and products; the uncertainties and direct and indirect effects of the significant military action against Ukraine launched by Russia, including threats of attacks against U.S. financial institutions as retaliation against financial institutions for sanctions imposed against Russia; the risk that Marqeta is unable to further attract and grow its customer base; the risk that consumers will not perceive the benefits of Marqeta’s products and services, including digital payment and banking products and services; the risk that Marqeta's products and services do not operate as intended, including digital payment and banking products and services; the risk that Marqeta’s products and solutions will not achieve the expected market acceptance, including digital payment and banking products and services; and the risk that competition could reduce expected demand for Marqeta’s products and services, including digital payment and banking products and services. Detailed information about these risks and other factors that could potentially affect Marqeta’s business, financial condition and results of operations are included in the “Risk Factors” disclosed in Marqeta's Annual Report on Form 10-K for the year ended December 31, 2022, as such risk factors may be updated from time to time in Marqeta’s periodic filings with the SEC, available at www.sec.gov and Marqeta’s website at http://investors.marqeta.com. The forward-looking statements in this press release are based on information available to Marqeta as of the date hereof. Marqeta disclaims any obligation to update any forward-looking statements, except as required by law.