2023 Payment Landscape Outlook | UK

By Sophie Proctor, March 7, 2023 · 12 mins read

For the UK, 2023 may come with its own set of challenges for businesses and consumers. With a looming economic recession, tightened financial conditions and rising inflation showing businesses need to be nimbler when it comes to their financial infrastructure and adopting ways to be more efficient in terms of their time and costs. While on the surface it may appear negative, it gives way to businesses to show resilience with better technology, and a motivated labour market. Pairing these can help to mitigate headwinds and overall deliver greater efficiency and business growth in 2023. 

Reaching new customers

Inflation seems to be at the forefront with its impact on consumer spending and the cost of living crisis. According to the IMF, the economy will grow by just 1.2% in 2023. Looking at the upside, unemployment remains low and this can give businesses confidence in their workforce.

This stifled growth in the UK may offer a renewed opportunity for global penetration in emerging markets. Businesses may look to seek new payment rails for faster, real-time payments that open up opportunities for global transformation. Making plans for the year ahead for better technology that supports global growth may be a key element to overcoming 

Moving towards automation

There are also likely to be significant changes in the way that payments are processed in the UK and 2023 may be the year that automation reigns. In recent years, there has been a trend towards real-time payments, which allow transactions to be completed instantly rather than being processed overnight. This is likely to continue, with more and more payments being made in real-time as technology improves and becomes more widely available.

The payments landscape in the UK will be more favourable of adopting tools such as APIs for increased automation of treasury functions, risk management and reporting. COVID-19 brought with it a greater focus on the need for digital payments and freedom to make payments without the need of visiting a bank branch. 

Using an API offers better data which is beneficial for CFOs and treasury teams to map out what the year ahead looks like, as well as seeing transactions conducted without the need for manual intervention. An API can allow for automated currency conversion, tracking payments and exchange rate fluctuations in real-time, all essential for UK businesses wanting to do business overseas.

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Changing the way we pay

Financial inclusion may not be the same concern as with some African markets as the UK population is overwhelmingly banked with 97% of adults having a bank account. However, the rise of better technology and alternative payment methods give way for greater international growth and combatting market volatility. 

One key trend that is expected to continue is the shift towards digital and mobile payments. In recent years, there has been a rapid increase in the use of contactless payment methods, such as debit and credit cards, as well as mobile payment apps like Apple Pay and Google Pay. This trend is likely to accelerate in the coming years, as more and more consumers become comfortable with using their smartphones and other devices to make payments.

79% of adults in the UK use alternative payment methods to pay and transfer funds. Businesses introducing digital wallets where they can send and receive funds provides an alternative payment method with increased speed and security. This is especially beneficial when dealing with customers and other businesses outside of the UK, where having a bank account has its own challenges and restrictions. Businesses in the UK who deal with cross-border payments should explore digital wallets which allow for faster and safer overseas transfers.

It seems abundantly clear that the payments landscape in the UK for 2023 continues to be more digitally engineered, with businesses seeking more ways to make and receive payments in a faster, safer and more intuitive way. Keeping abreast of regulatory changes, the latest technology and speaking to the right people who can offer solutions is an effective way to combat any economic uncertainty and turbulence.

Explore Verto’s Solutions today to see how we can help your business grow and overcome common market challenges in 2023. Read our CEO and co-founder, Ola Oyetayo’s reflections on 2022 and what trends he expects to see going into 2023.

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