Half (51%) of people in the UK think physical wallets will become less relevant as digital ways to pay become more popular, according to new research from Mastercard.
The data points to a decline in physical wallets, as 21% saying they don’t expect to carry a wallet or purse within the next five years - rising to 38% among Millennials.
The findings come as data points to a global increase in the adoption of digital payment methods. 93% of consumers will consider using alternative means of payment, including contactless, QR code, biometric payments, and cryptocurrency transactions in the next year. This uptick in digital coincides with the continuing downward trajectory of cash usage in the UK - a decade ago around 60% of payments were made in cash, and UK Finance estimates that this figure will fall to 6% by 2031.
The Mastercard research shows that this is particularly the case among young people. A third (31%) of 18-24 year olds say that the digital wallet on their phone is their preferred way to pay, compared to just 5% of those aged 55+, more than half (55%) of 18-34 year olds would rather just carry their phone in place of a wallet or purse, and 41% of Gen Z say they don’t expect to ever buy a physical wallet or purse again.
Across the population more broadly, half (49%) only carry their wallet or purse because it’s helpful to have their other cards, for example loyalty cards and driver’s licence, and a third (33%) of UK adults say they don’t need to carry a wallet or purse at all.
This decline in cash is reflected in the reduction of size in wallets and purses. A third (30%) of Brits say that the wallet or purse they have now is smaller than the one they had five years ago, and 33% say they would no longer look for a coin compartment when buying a wallet or purse. 40% of people would want the smallest wallet or purse possible as they don’t have space to carry a big one in their pocket.
Mastercard partnered with Central Saint Martins on the research to track how wallets have changed over the last 100 years and how they might look in the future. The BA Fashion Communication graduates said: “Our research produced some interesting and perhaps unexpected results. Before this project, we associated wallets with an older generation, but quickly learnt that they still occupy space today, just not how you might expect them to.
“Wallets, purses, and pouches have evolved immensely over the last 100 years - firstly, as things to hold money and now as something that stores memories. The need to carry a wallet with you every time you leave the house has evolved as mobile payments have become more convenient and commonplace. Nowadays, wallets are so much more than just a money receptacle; they hold memories, photos, lucky charms, hand scribbled notes and once forgotten loyalty cards that are yet to be transported into the digital space.”
Kelly Devine, President UK & Ireland at Mastercard: “We don’t often consider the impact that changing payment preferences have on the accessories we choose to buy and use. In contrast to a decade ago, many who still carry wallets are now seeing them more as a site of personal archive rather than a vessel for physical cash and cards. As technology continues to evolve, wallets shrink, and people increasingly embrace digital methods of payment, our focus remains on delivering choice, convenience, and speed for people around the country.”