Financial solutions becoming increasingly sophisticated, with consumers and small businesses leading the charge, signal growth potential for payment platforms, according to research by Marqeta.
Marcin Glogowski, the UK CEO of Marqeta, has revealed that consumers are strategically rethinking their payment methods. This shift is highlighted in Marqeta's sixth annual State of Payments Report, which surveyed a total of 1,000 Small and Medium-sized Businesses (SMBs) and 3,000 consumers across the US and UK.
The report indicates a move beyond merely choosing a payment method or processing a transaction, towards a desire for more convenience and value in real-time. In fact, 49% of UK consumers surveyed expressed a preference for a wallet that recommends which payment method, credit, Buy Now, Pay Later (BNPL), or debit, to use for each purchase.
This trend is not exclusive to consumers. UK SMBs are also seeking smarter payment solutions. More than half (52%) of SMBs surveyed want tools that act as strategic assets, helping them streamline expenses, boost operational efficiencies, and free up cash flow.
The report also reveals a growing interest in AI-powered wallets that automatically optimize payment choice based on spending habits and preferences. A significant 34% of UK consumers surveyed are interested in such wallets.
The evolution of BNPL from being used for big-ticket purchases to a tool for everyday spending is particularly notable. UK consumers have adopted BNPL solutions more widely than US consumers, with 54% of UK consumers having used BNPL, compared to 38% of US consumers.
However, many UK SMBs still struggle for credit without modern business card solutions and data-driven underwriting models that look beyond traditional credit scores. This is concerning given that UK SMBs generate £2.8 trillion in revenue, but account for only £62.1 billion in business loans - a deep mismatch between economic contribution and financial support.
Interestingly, 42% of UK SMB owners surveyed rely on personal cards to fund business expenses, citing higher credit limits and better rewards as reasons why. This suggests a need for more tailored business payment solutions.
The report also finds that UK SMBs are prepared to invest in new solutions with higher upfront costs if it means long-term savings and greater efficiency. 90% of SMBs surveyed are willing to make such investments.
In conclusion, consumers in the UK are driving a shift towards strategic payment usage, demanding smarter tools that optimize their transactions. UK SMBs, on the other hand, need smarter, more flexible payment solutions that not only support their day-to-day operations but also actively fuel their long-term growth. Payment providers that can deliver real-time and modern solutions that reward businesses will be best positioned to capture this growing demand from UK SMBs.
