The great tech payday

How websites and apps are transforming high streets

AQUIET revolution is taking place on the High Street. Instead of having customers fight over the best bargains in stores, retailers saw their websites crash on Black Friday last week as waves of shoppers headed online.

In recent days, digital payments firms including Worldpay have reported booming business from overseas markets such as China.

In contrast, bank note producer De La Rue revealed that it will be cutting production by a quarter as the world increasingly goes cashless.

Debenhams has been given a bleak prognosis by Wall Street giant Goldman Sachs over whether it can hold off the threat of online shopping.

And yesterday, former Barclays boss Antony Jenkins declared that banking may be about to have its ‘Uber moment’.

He was referring to the phenomenally popular low- cost mobile phone app for booking taxis.

A generational shift from older shoppers used to using cash in stores to younger ones who use the web and mobile phone apps is causing a rift on the High Street.

As ever, there will be winners and losers in the battle to keep up with the pace of change.

It’s already taking grip in the banking sector. Banks without branches are being established, notably Atom Bank, a service for those who only want to bank using an app on their smartphone.

This week Spanish lender BBVA took a 30pc stake in it – spending £45m to access retail customers in Britain for the first time.

George O’Connor, director at analysts Panmure Gordon, said: ‘We are living in a golden age. Technology has become part of the fabric of our lives. If I want food, if I want to find love, I just pick up my phone. It’s a digital revolution.’

Worldpay is one of those to benefit. It processed 11.5billion payments in the year to June – some 16pc more than the year before.

It reflects what’s happening on the High Street. For example, on Black Friday, shoppers spent £1.1bn online in the day – a rise of 36pc compared with last year.

Meanwhile, footfall in High Street stores was down by 5pc. Colin McLean, managing director at fund managers SVM Asset Management, said: ‘The way people live, work and travel is changing and it is clear that some industries face disruption and might not survive in their present form.’

He names former High Street stalwarts Woolworths, Comet and Phones 4u as just some of the most recent casualties of the changing habits of shoppers.

New firms are able to start with a clean sheet of paper, focusing on the security and functionality of their apps and websites.

BEING online-only lets firms cut their prices, while focusing on distribution and providing a good customer experience. One example is Eagle Eye, an app which lets shoppers redeem coupons at the till and build up rewards for using vouchers.

But more established firms are set to benefit from the trend too.

Jeremy Gleeson, manager of the Axa Framlington Global Technology fund, has a big investment in payments firm Visa, which has boomed during the growth in online payments. He said: ‘Once upon a time you might only use a card for a substantial purchase but today they are the most convenient, quick and safe way to pay.’

With security of prime importance to shoppers, PayPal could also benefit from the rise in online shopping. A growing number of retailers have websites which allow customers to check out using their PayPal account rather than having to enter their credit card details.

And the growth and security of Apple Pay has allowed firms such as NXP Semiconductors, a Dutch company which makes the chips that provide the secure identification in iPhones, to soar. The Nasdaq-listed company has seen its share price jump from 16cents to 92cents over the past five years.

For many though, today’s tech boom will bear a worrying resemblance to the 90s bubble which burst so painfully. Major investment firm Fidelity recently cut its stake in photo-sharing app Snapchat by a quarter.

Mobile payments technology business Monitise has endured a spectacular fall from grace, as competitors including Apple have muscled into the sector. Its share price is down from 81p at the start of 2014 to just 3.14p today. But for the firms who do succeed, there is a fortune to be made.

Tom Becket, chief investment officer at Psigma, says giants such as Apple, Alphabet (formerly Google) and Amazon will benefit.

He said: ‘These are classic examples of wonderfully innovative companies which have spotted their opportunity and exploited it superbly.’