THANKS to your smartphone, this will be the new face of shopping ... literally.

Forget about fumbling for coins or even a credit card when you are buying a coffee, selecting clothes or dining out all you need is a smartphone and a mug shot.

Simply show up, "check in" at a store on your handset via the web, place an order, and have a sales assistant confirm your photo ID when it flashes up on their terminal.

The technology tipped to explode over the next three years as Australians increasingly become inseparable from their phones and more comfortable using them to shop will be unveiled today by online payment provider PayPal.

Nielsen figures, to be released today, estimate annual purchases of goods and services using smartphones in Australia have rocketed from $155 million to $5.6 billion in just two years.

PayPal's innovation will be unfurled by the end of the week at Sydney fashion outlet Glue Store's Pitt St flagship site ahead of a rollout at other locations in Victoria, NSW and Queensland by the end of the year.

It will soon also be adopted at Sydney's Sonoma Bakery sites.

Guzman Y Gomez Mexican restaurants in NSW, Queensland, Victoria, the ACT and Western Australia are expected to be on board next year.

The cashless and cardless mobile transactions within physical stores are automatically charged to customers' PayPal accounts linked to their bank or credit card funds without the need to touch a point of sale terminal.

"We see this as becoming commonplace, particularly in cafes and fast food restaurants, in the next two to three years," PayPal Australia director of product and new business Andrew Rechtman said.

The initiative follows the steady spread of "contactless" card readers allowing consumers to wave or tap credit cards or mobile phones at registers to pay.

Westpac announced a smartphone scan and pay pilot earlier this year, while the Commonwealth Bank last year launched an iPhone case that can be waved in front of card readers for credit card payments.

PayPal, which first launched its development in the US last year, expects to roll out at many more stores.

"This is the first time we've enabled people to use their digital wallet physically in store. The boundaries between online and offline disappear when you have a smartphone in your hand."

Originally published as Forget money, use your mug shot