November 28, 2011 - The mobile wallet will be the preferred method of payment for consumers by 2016, a new report has revealed. PayPal's findings, which are based on a report by Forrester undertaken on the payment provider's behalf, suggested that 2016 will be the year of mainstream adoption for digital payments.

According to the firm, consumers will no longer need their wallets or cash in the future as the smartphone becomes the payment device of choice. 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."

Figures from Forrester showed that 45 million Brits use a mobile device with half of the mobile buyers questioned making a purchase on their phone once every three months. More than 14 million Brits are active users of PayPal with a million having made a payment on the platform using their mobile.