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The huge growth in digital wallets has raised the prospect of a cashless society. Particularly as just 3% of the UK population have not made any type of payment online. 

In fact, digital wallets such as PayPal and Amazon Pay are now challenging debit cards as the most popular form of online payments. 68% of people use debit cards to make online purchases, with 63% using digital payment services. 57% of the UK population now use direct debit payments, while 45% use credit cards. 

Between 2016 and 2021, mobile wallets and credit cards have been the big winners in the online payment sector, with both witnessing high levels of growth. The use of credit cards increased by 10% in this period, although one explanation for this could be due to higher demand for credit when ordering goods online. 

The explosion in digital payments

Globally, the total value of digital payment transactions is forecast to be worth almost £280 billion in 2022 and the growth projections are staggering. By 2027, the total is predicted to be worth over £750 billion, reflecting the seismic shift in online payment behaviour amongst consumers around the world. 

The increase in the use of single wallets as a payment option is also being felt in the iGaming industry with the news that technology provided by Playtech, the gambling software development company, has enabled Buzz Bingo, a major player in the live bingo industry, to offer its players a single wallet which encompasses its online and offline bingo operations. The advantage of the seamless wallet is that players can now deposit and withdraw funds via a single account when using retail or online services. This added convenience is one of the major arguments in favour of single wallets. 

The advantages of single wallets

Beyond convenience, there are manifold benefits of single digital wallets to the consumer. First and foremost, they offer a high level of security, not only because they negate the risk of losing a credit card, but also due to the full encryption and password-protected access. The Apple Wallet, also known simply as Wallet, takes advantage of the existing security of the iPhone. This has been tightened further with the advent of the iPhone 14, which gives users the highest level of security in the smartphone industry. It can also store boarding passes and even car keys for extra convenience.   

The change in consumer behaviour towards single wallets has raised the question of a cashless society dominated by the operators of digital wallets, amid fears that those who are unable or unwilling to go digital could be left behind. Although Sir Jon Cunliffe, Deputy Governor of the Bank of England for Financial Stability, told a House of Lords Economic Affairs Committee last year that “the Bank of England will continue to make cash available for as long as there is demand for it.” 

Nevertheless, as consumers increasingly use single digital wallets, there will become a time when cash is no longer king, in fact it could cease to exist at all as digital wallets continue their inexorable rise.