Leader: Web brands take the battle to the high street

PayPal is one of a number of companies that is looking to extend its reach from the internet into bricks and mortar.

A few years ago it was high street brands fighting their way onto the internet - but now the invasion is the other way round.

Lastminute.com now has travel agency shops in train stations and around cities. Amazon, the online retailer, has partnered with Borders, the book shop.

Online bookie bluesqure.com is building its own casinos. And now you can walk into a high street shop and buy an easymobile.com SIM card.

How the world of retail is changing. But what does this mean for the banks?

It's probably fair to say people will for a long time still want to have a bank branch to visit. There is no substitute for face-to-face contact.

But there are those goods and services, such as holidays, books and gambling, for which it makes no difference how you buy your product and who you buy it from - so you might as well go for the cheapest.

The smart thing about the companies moving offline is they have already established themselves in one of the hardest and most competitive markets that exists: the internet.

Now PayPal looks like it has cornered a healthy portion of the online payments market, it can start to compete for the big business, safe in the knowledge it has conquered one of the toughest territories.

It's already looking at credit cards, and other payment methods are likely to follow - the banks had better watch out.