Paying for your shopping using cash or cards could be a thing of the past in just five years, according to a new report by online payments service PayPal.
Instead, making payments via your mobile phone will be commonplace by 2016.
This is the view of major UK retailers and business interviewed as part of PayPal’s research into future payment methods.
By 2016, UK mobile retail sales will hit £2.5 billion as around 14 million adults will regularly shop via their mobiles, the Money: The Digital Tipping Point report says.
The digital wallet
PayPal says that in the future a whole range of devices - including PCs, mobile phones, tablets and games consoles - will be used to make in-store and online retail payments.
Carl Scheible, managing director of PayPal UK said: “2016 will mark the real start of money’s digital switchover in the UK.
“We’re not saying cash will disappear entirely, but we’ll increasingly use our phones and other devices rather than our wallets to pay in-store as well as online.
“The lines between the online world and high street will soon disappear altogether.
“Children born today will become the UK’s first cashless generation. It will be completely natural for them to pay by mobile."
PayPal’s report also reveals shoppers can look forward to being able to carry digital loyalty cards, promotional offers and receipts on their phones - keeping everything in one place creating a virtual shopping hub.
Some retailers are already ahead of the game when it comes to smartphone payments.
In June this year restaurant chain Pizza Express launched an iPhone app that allows diners to pay their bill on their phone via PayPal.
And in the New Year high-street chain Starbucks will launch a free smartphone app that will allow customers to pay for their coffee with one touch using their iPhone or iPod.
From 5 January 2012, customers who have a registered Starbucks Card will be able to link the app to their card balance and make payments for their in-store purchases by scanning their unique barcode at the till.
Brian Waring of Starbucks UK and Ireland: “Customers want to be served quickly, but fewer want to use cash. We wanted to find a way for them to pay in the quickest way possible.
“We have created our own custom-built mobile payment technology rather than waiting for the near-field communication technology which is currently not widely available.”
Will cash go the same way as cheques?
Cash will make up less than half of all transactions in just five years’ time, says technology expert Stuart Miles of gadget news and reviews website Pocket-lint.com.
“We are seeing a trend where retail customers want to be served quickly, but fewer want to use cash. Mobile payment technology enables this and for that reason is set to be the future of shopping.”
What do you think? Can you see yourself paying for goods by mobile phone in the near future? Or are you doing so already? Leave your views on the comments board below.