UK consumers will be able to transfer money as easily as texting from spring 2014, without needing to know sort codes and account numbers.
The Payments Council announced yesterday that eight financial institutions representing 90pc of UK current account holders have already signed up to the scheme.
The new service will allow users to make payments using a mobile phone number, without needing to know account details.
The Payments Council said that as a minimum a passcode or similar security feature will be needed to authorise payments. Banks will also be able to remotely disable an account if they suspect misuse.
The institutions already involved in the scheme are Barclays, Cumberland Building Society, Danske Bank, HSBC, Lloyds Banking Group, Metro Bank, Royal Bank of Scotland (RBS) and Santander.
Adrian Kamellard, chief executive of the Payments Council, said: “This new service will offer a simple, secure way to split a bill for dinner, receive money from a friend or pay a tradesman without needing to remember or share account details.”
Barclays already has a similar scheme in place called Pingit, which has been running since February last year and is available to customers of all UK banks and building societies.
However, the Payments Council said their scheme marks the first service in the country to potentially link accounts from every bank in the UK.
The body’s own research found that one in three smartphone users said they were definitely or extremely likely to sign up to the new service at launch.
Over the next year the Council will set rules defining minimum service standards and other technical requirements.
This marks the final phase of the project, following the on-time completion in December of a central database enabling banks to securely store customers' mobile phone numbers and link them to their account details.
The service will move money directly between accounts using established payment schemes.
These are the Faster Payments service, which processed more than 800 million online and phone banking payments last year, and the Link network, which dealt with 3.1 billion real-time ATM withdrawals in 2012.