LONDON: Mcommerce will have become mainstream in the UK by 2016, as consumers use handsets to buy products and make payments in locations like shops and restaurants, a study has argued.

PayPal, a unit of eBay, and Forrester, the research firm, polled 550 mobile users to gauge their current habits and potential future usage of wireless devices.

It supplemented these findings with insights provided by ten senior executives from retailers and other businesses, together claiming annual revenues of £85bn.

Overall, 49% of subscribers, representing almost half of the UK's 45m mobile audience, now make purchases through their mobile phone at least once every three months.

By 2016, UK mobile retail sales alone are expected to hit £2.5bn annually, with 14m adults "regularly" shopping directly via this route, as the sector reaches a "tipping point".

Among the primary drivers of this trend will be the rising uptake of devices such as smartphones and tablets, with the study predicting digital loyalty cards, offers and receipts will become widespread.

Carl Scheible, PayPal UK's managing director said: "[This date 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 has 14m active accounts in the UK at present, and 1m people from this user base have already sent a payment from a wireless handset, according to the company.

More specifically, the firm expects mobile payments among its customers to reach $3.5bn this year, a figure which would be five times that recorded in 2010.

PayPal recently partnered with Pizza Express, the restaurant chain, to launch an app meaning diners can pay using their own smartphones without leaving their table, and suggested such services would become commonplace.

"Our vision of money is to enable you to pay for something from wherever you are, whatever device you're on - a PC, mobile phone, tablet, games console and a whole lot more," Scheible said.

Data sourced from PayPal; additional content by Warc staff