PayPal, the eBay-owned online payments firm, has teamed with Aurora Fashions Group (owner of the Coast, Oasis and Warehouse chains) and Karen Millen to launch Pay By Mobile in 230 UK stores visited by around 15m customers.
Available for Android and Apple iOS devices, the PayPal inStore app allows customers to scan unique barcodes and transaction numbers on the items they want with their phone.
The shop cashier then simply scans the code shown on the phone screen to take payment directly from the customer's PayPal account.
Alongside payments, refunds and discounts are all managed by the app, which works even when there is no mobile data or WiFi signal.
Cameron McLean, the managing director of PayPal UK, said that the app marks the start of a "quiet revolution in the way we shop on the high street".
"We've created a simple, secure way to use a mobile phone to pay in your favourite stores. The revolution starts at Oasis, Warehouse, Karen Millen and Coast," he said.
"The lines between the online world and high street will soon disappear altogether; research we carried out last year amongst major retailers suggested that 2016 will be the year you won't need a wallet to shop on the British high street. A phone will be enough."
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McLean feels that PayPal's payments app shows that people "don't need" Near Field Communications (NFC), a mobile technology that enables contactless transfers of information between devices and points.
"PayPal was created back in 1998 to let people send money by mobile, so [the app] announcement is a natural step for us," he continued.
"It builds on the success of our partnership with PizzaExpress, which enables people to pay by mobile at over 400 restaurants across Britain.
"It's part of a global move for PayPal, with major in-store partnerships in the United States with The Home Depot and 15 other national US retailers. We handled $4 billion in mobile payments globally in 2011, and expect this to rise to $7 billion this year."
Aurora Fashions Group's Ish Patel said that customers now want "more" from physical retail stores, including a "more personalised experience enabled by new technology".
"Catering for payment flexibility is a now a crucial part of ensuring we are providing customers with a seamless experience by merging digital commerce with physical retailing.
"Our partnership with PayPal allows us to take the next step in our omnichannel journey, ensuring customers can safely and securely purchase items using their own mobile phones. We're proud to be innovating on the UK high street and continuing to lead the way in providing a new kind of shopping experience."
Customers can download the app at www.paypal.co.uk/instore.
Watch a video created by PayPal and Oasis showcasing how the app works below: