United Kingdom
The United Kingdom (UK) is the 5th largest economy in the world and 2nd largest in Europe. The country ranks as the 14th largest exporter of goods and the 2nd largest importer of services worldwide, while also being the 7th largest importer of goods and 6th largest importer of services.
On 31 January 2020, the UK officially left the European Union (Brexit) after 47 years of membership, with a Trade and Cooperation Agreement implemented from 1 January 2021. Post-Brexit trade, alongside COVID-19 economic recovery, posed major challenges for the country.
After a severe GDP contraction in 2020 (-9.7%), the UK recorded a 7.4% GDP growth in 2021, driven by fiscal and monetary policy measures, easing restrictions, and recovering economic activity. The Russia-Ukraine conflict, rising energy prices, political instability, and Northern Ireland protocol issues may influence economic performance, with a 3.6% GDP growth forecast for 2022 (EIU, OECD).
Population: 68.2 million (2021 estimate).
The banking sector in the United Kingdom (UK) is the largest in Europe and the fourth largest globally. UK banking is highly developed, driven by financial technology (fintech), innovation, and advanced digital banking services. The UK is also recognized as a global financial center for cross-border lending.
Nearly the entire UK population uses debit cards, while about two-thirds hold credit cards, reflecting strong financial inclusion. The UK banking industry is categorized into four main types:
The UK is home to some of Europe’s largest banks. HSBC is the largest bank in Europe with a market capitalization exceeding $124 billion, while Lloyds Banking Group exceeds $30 billion. NatWest, Barclays, and Standard Chartered are other notable UK banks with significant influence in European and global financial markets.
Digital banking in the UK is rapidly growing. Monzo Bank and Starling Bank are leading digital-only banks, with Monzo reaching over five million UK customers by 2022. Starling Bank, founded in 2014, continues to attract a growing customer base, reflecting the rising trend of online banking and mobile banking adoption in the UK.
Top banks
HSBC
HSBC was born from one simple idea – a local bank serving international needs. In March 1865, HSBC opened its doors for business in Hong Kong, helping to finance trade between Europe and Asia. Our purpose – Opening up a world of opportunity – explains why we exist. We’re here to use our unique expertise, capabilities, breadth and perspectives to open up new kinds of opportunity for our customers. We’re bringing together the people, ideas and capital that nurture progress and growth, helping to create a better world – for our customers, our people, our investors, our communities and the planet we all share.
Monzo
Monzo is mobile banking that puts you in control of your money. With our intuitive spending and saving account and no overdraft fees you can optimize your budget, manage payments and subscriptions, and save money. Sutton Bank helps us hold our users’ deposits and protect your money with Federal Deposit Insurance Corporation (FDIC) insurance.
Lloyds Banking
Lloyds Banking Group is a leading UK-based financial services group. We provide a wide range of banking and financial services, focused primarily on retail and commercial customers.
Santander Bank
As a global leader in financial services, we’re transforming businesses and empowering communities with product, services, and contributions, but more importantly, we’re enriching the lives of our clients. See the work we’ve done and how we’re building a better world for everyone around us.
Starling Bank
Starling Bank is a British bank, occasionally referred to as a digital challenger bank or neobank, providing current and business bank accounts in the United Kingdom. Starling Bank is a licensed and regulated bank, founded by former Allied Irish Banks COO, Anne Boden, in January 2014.
Metro Bank
It offers a full range of banking and other financial products and services, including corporate, commercial and consumer banking, as well as credit card, remittances, leasing, investment banking and trust banking.
First Direct
Current accounts, savings, credit cards, mortgages, personal loans and insurance. We offer the same things most banks do. We just offer them in a different way. A way that works best for you. And we’re constantly reviewing our products to make sure they’re flexible enough to support our customers’ lives.
Barclays
Our vision is to be the UK-centred leader in global finance. We are a diversified bank with comprehensive UK consumer, corporate and wealth and private banking franchises, a leading investment bank and a strong, specialist US consumer bank. Through these five divisions, we are working together for a better financial future for our customers, clients and communities.
NatWest
NatWest Group is a UK-focused banking organisation, serving over 19 million customers, with business operations stretching across retail, commercial and private banking markets.
Bank of Scotland
At Bank of Scotland, we’ve proudly been by the side of Scottish families, communities and businesses since our foundation in 1695. As Scotland’s oldest bank our expertise has helped customers plan their finances for over 300 years. We are the Bank of Scotland, and we are by your side.
Top payment methods
Open banking UK allows shoppers to pay directly from their bank accounts through account-to-account payments, providing a secure, user-friendly, and cost-effective payment solution. This innovative UK fintech payment method enhances digital payments and online banking experiences.
A Direct Debit UK is an instruction from a customer to their bank, authorizing a business to collect agreed payments automatically. BACS payments UK are a simple and reliable way for companies to receive regular or occasional payments from UK consumers and businesses, supporting efficient payment processing, business banking, and digital transaction management.
BACS
When making a BACS Direct Debit payment, the shopper needs to enter their name, bank account number, sort code, and email address. Before they continue to pay, the shopper confirms that the account is in their name and that they agree with the payment. After the payment is received, they are given the option to download a copy of the Direct Debit Instruction (DDI) or 'mandate'. Taking the BACS processing cycle into account, it can take four to six before payment is cleared and settled.
Diners Club
Diners Club, was the world's first independent credit card company, and is synonymous with premium quality travel, leisure, and entertainment. Diners Club is now part of the Discover network, combining to create a network spanning over 185 countries. This card is particularly suited to verticals such as airlines, hotels and other premium hospitality services.
American Express (AMEX)
American Express (AMEX) is a widely accepted global payment method, used in over 130 countries with more than 100 million cards in circulation. AMEX cardholders spend on average 3-4 times more than Visa and Mastercard users, making it a top choice for premium businesses, luxury brands, and high-value e-commerce transactions.
Visa
Visa is the world’s largest global card network by transaction value, accepted almost everywhere. It’s known for secure, fast, and reliable payments, positioning itself as “the best way to pay and get paid by everyone.”
Paypal
PayPal, a leading online payment solution, serves over 400 million active users worldwide in 200 countries and supports 100+ currencies. In France, PayPal is one of the most popular digital payment methods for online shopping, trusted for secure, fast, and convenient online payments.
Mastercard
Mastercard is a global payments leader, dominating the co-branded card market in Europe and key countries like Brazil, Canada, and Germany. Known for secure, contactless, mobile, and digital payment solutions, Mastercard drives e-commerce, fintech, and online banking innovation worldwide.
Clearpay
Clearpay is a popular buy now, pay later service in France, Italy, Spain, and the United Kingdom. With Clearpay, the shopper can pay for the goods in four installments. Before approving the payment, Clearpay performs risk checks on the shopper. If successful, Clearpay takes on the full fraud risk for the payment, and pays you up front.
Discover
Discover Financial Services operates Discover Bank, offering online banking, credit cards, personal loans, student loans, and home equity loans. The Discover Card, third-largest in the US, is widely accepted in the UK, supporting digital payments, secure online transactions, global payment processing, and international banking solutions.
Paybybank
At checkout, when you choose Pay by Bank as your online payment method, you will be asked to select your bank, which then creates a secure payment link to authorize your transaction. Once the payment is authorised, you are redirected back to the checkout page. No card details are needed, there’s no need to create an account, and no personal financial information is shared.
This digital banking payment solution is offered by PayOp, covering almost all of Europe and competing with top online payment providers in the e-commerce and fintech market.
ApplePay
Concluding remarks
In the United Kingdom, there are various payment methods available for individuals and businesses. These payment methods include:
Cash
Cash remains a widely used payment method in the UK, especially for small transactions, local shops, and informal businesses. While digital payments are growing, cash payments remain relevant in rural areas and traditional markets.
Cards:
Debit and credit cards dominate UK payments, with Visa, Mastercard, American Express, and Discover being the most popular. Cards are used for online shopping, in-store payments, contactless payments, and mobile wallet transactions. UK banks like Barclays, HSBC, Lloyds, and NatWest support secure card processing.
APM's:
APMs such as PayPal, Apple Pay, Google Pay, and Open Banking solutions are gaining popularity for e-commerce, peer-to-peer transfers, and subscription payments. APMs offer secure, fast, and convenient payment options for UK consumers.
Bank Transfers
Direct Debits and BACS payments are widely used for payroll, utility bills, and business-to-business payments. UK banks provide online banking platforms for domestic and international transfers, ensuring fast and secure payments.
Cryptocurrrency
Bitcoin, Ethereum, and other cryptocurrencies are slowly adopted in the UK, primarily by tech-savvy consumers, investors, and fintech startups. Some UK merchants are starting to accept crypto for digital transactions.
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