The UK payments sector could add billions of pounds to the economy by 2030, but only if policymakers create enough room for new technologies to scale.
Research commissioned by Visa and produced by Public First estimates that a more innovation-friendly payments environment could generate up to £3.8bn in additional value by 2030.
Regulators and industry are currently debating the future of UK retail payments infrastructure, the growth of account-to-account payments and how technologies such as AI, stablecoins and tokenisation should be regulated.
The UK digital payments sector contributed an estimated £7.5bn to GDP in 2024 and modern payment systems supported around £88bn in additional sales for UK businesses between 2019 and 2024.
The report says the next phase of growth will depend on maintaining trust as new technologies are introduced, highlighting fraud and security concerns as factors that can slow adoption.
Innovation needs consumer trust
Greater adoption of digital payments among SMEs could add around £5.1bn to UK GDP each year, according to the report, and increased use of AI across payments could generate around £4bn in additional economic activity by 2030.
Payments and financial institutions already use AI across several parts of their operations, with fraud detection among the most notable use cases. However, the report links the success of AI, stablecoins and tokenisation to confidence in the payments system.
It found 89% of consumers have confidence in digital payments, but 53% would abandon a transaction if the payment didn’t feel secure.
That challenge may become more difficult as AI adoption grows and the technology becomes more sophisticated. Recent headlines have focused on warnings from AI researchers about the technology’s potential risks, including an Anthropic researcher who put the chance of AI causing human extinction within the next decade at more than 10%.
Notably, other researchers have disputed how likely such extreme outcomes are, but the claims have added to public debate around AI safety and regulation.
Payments firms may have to contend with such concerns more often as they introduce AI into areas involving people’s money and financial data.
The report shows how quickly a loss of confidence can affect adoption, with 36% of businesses surveyed experiencing fraud in the previous 12 months and almost a quarter saying they had paused at least one planned digital project.
Public First says this could equate to as many as 455,000 UK businesses delaying the adoption of new technology because of fraud.
Regulation will determine what comes next
The report emphasises the influence of the UK’s regulatory framework, recommending delivery of the National Payments Vision, consolidation of the Payment Systems Regulator into the Financial Conduct Authority (FCA), modernisation of retail payments infrastructure and a technology-neutral approach to areas such as AI and stablecoins.
Much of the work aforementioned is already underway, with the government confirming in April that it intends to transfer the PSR’s functions into the FCA, and the FCA has started to prepare for the consolidation.
The UK has also spent recent years pursuing a relatively pro-innovation approach to AI, which started under former Prime Minister Keir Starmer. The government backed an AI Opportunities Action Plan aiming to accelerate adoption while avoiding overly prescriptive rules.
However, it remains to be seen whether Prime Minister Andy Burnham will change the direction. His government has so far continued to discuss both the opportunities and risks of AI, including online safety, but hasn’t set out a major break from the previous approach.
Earlier this month, UK Minister for Artificial Intelligence Kanishka Narayan said financial services and fintech will be “a critical driver” of the government’s target to make the UK the fastest adopter of AI in the G7.
The National Payments Vision, first published in 2024, sits at the centre of the payments side of this agenda. It sets out the government’s ambition for a trusted, world-leading payments system built on next-generation technology, greater choice and resilient infrastructure.
However, turning the vision into reality has been anything but straightforward.
Previous Payment Expert reporting has shown that policymakers and industry figures are focused on creating more competition and resilience, including through greater use of account-to-account payments and the development of new retail infrastructure.
However, A2A is still some way off from replacing cards across areas such as in-store acceptance, international transactions, recurring payments and consumer protections.
Industry figures have also warned that building alternatives doesn’t automatically create resilience, with the bigger question being whether those alternatives can operate at scale if another part of the system becomes unavailable.
