Banks are facing a serious threat from internet payment systems such as Paypal, Nutmeg and even Bitcoin, warns top accountant EY.

Almost a third of Britons (31.8 per cent) – including many of the youngest and wealthiest customers of banks – have made use of some kind of online payments service.

The figure is almost double the average rate of use across the world’s developed economies – suggesting that British banks have most to fear from internet upstarts.

Clash: Almost a third of Britons have ditched traditional payment methods for an internet alternative

The findings emerged from research by EY’s financial technology division which has been commissioned by Chancellor George Osborne to study how Britain compares to other countries for new technology and finance.

Imran Gulamhuseinwala, head of the EY Fintech division, said: ‘The people most open to this kind of service are young and they have high incomes. Even if this is a short-term trend this is a significant threat to the banks.’

EY also researches use in the US, Canada, Australia, Hong Kong and Singapore. The average proportion using alternative internet payment systems in those countries was just over 17 per cent.

The far higher use in the UK is partly due to the huge popularity of online shopping in Britain.

Gulamhuseinwala said another significant factor is that distrust of traditional banks in the wake of the financial crisis and a series of scandals is far higher in the UK than elsewhere.

EY global banking analyst Steven Lewis warned that banks would have to improve their online services – or do deals with internet finance companies.