Consumers are increasingly using smartphone apps to pay for goods according to the latest data.
Research by Worldpay has found that the number of in-store contactless transactions made via a mobile device totalled 126 million last year, with the amount spent topping £975 million. This marks a 328% year-on-year rise in in-store mobile spending.
Almost one third of consumers have already used the payment capabilities offered by their mobile phones; Worldpay is now predicting "exponential" growth in "tap and go" payments in the coming year.
Accounting for 59% of all in-store mobile transactions, the supermarket sector has been a key driver in the uptake of digital wallets such as Apple Pay, Google Pay and Samsung Pay. Pubs, bars and restaurants make up a further 12.5% of the total spend.
Now, according to Worldpay's analysis, shoppers are starting to purchase higher value items via their smartphones. In the second half of 2017, the average spend per transaction increased by 11%. Luxury department stores and high-end boutiques are now one of the fastest growing sectors for mobile payments.
James Frost, cmo of Worldpay said: "Digital wallets are growing in popularity every day, but what's interesting is the shift in the way people are shopping with their smartphone. No longer just restricted to light bites and post-work pints, mobile contactless payments are becoming increasingly popular for higher-end purchases too, as manufacturers integrate more sophisticated security features into handset designs."
According to Worldpay's findings, more than half of consumers can now see a future where mobile replaces their card within the next five years. This number rises to 65% for Gen Z (16-20 year-olds), suggesting that digital transactions could spell the death of the traditional wallet.
"Contactless cards have paved the way for mobile payment adoption, but there is still work to be done before mobile 'tap and go' becomes ubiquitous," said Frost. "We know that three-quarters of consumers still prefer plastic when it comes to making a contactless payment, which may stem from our reliance on a physical wallet for other aspects of the checkout process, such as collecting loyalty points, or showing ID.
"But that is all set to change over the next 12 months. The DVLA is set to launch a digital version of the traditional driving license later this year, and with more businesses looking to integrate their loyalty programs with mobile wallets, we can expect the ease of carrying just one device to win out for consumers very soon."