Mobile phones could replace cash by 2016

Consumers will be able to pay for everything on the high street with their mobile phones in five years time, a new survey says. 

Cash could be redundant by 2016 thanks to mobile phones

 

Research by Forrester, commissioned by PayPal, found that “2016 will be the year when UK shoppers will be able to use their mobile phones to pay for things on the high street with digital money rather than cash, cheques or cards”.

The findings are based on interviews with 10 senior executives from major UK businesses, representing a combined 2010 turnover of £85 billion.

Almost half of all mobile users purchase something via the device every three months, the study suggested, and more devices will be in circulation over the coming years.

Increasing numbers of online retailers are offering PayPal alongside credit cards, and eBay is to open a shop which encourages visitors to pay for goods with their mobile phones rather than at a conventional till.

Other incentives for customers to pay by mobile include location-based offers, digital loyalty cards and apps. PizzaExpress recently launched an app allowing users to pay their bill via their mobile, and Starbucks has recently announced a UK app that allows users to scan a code corresponding to their account and choice of drink.

Carl Scheible, Managing Director of PayPal UK, claimed, “We’ll see a huge change over the next few years in the way we shop and pay for things. By 2016, you’ll be able to leave your wallet at home and use your mobile as the 21st century digital wallet. 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.”


Scheible added that the “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 said it expects to process more than $3.5 billion in mobile payment volume in 2011 – five times the volume it processed in 2010. By 2016, UK mobile retail sales will hit £2.5 billion, PayPal claims, as just over 14 million adults will regularly shop via their mobiles.