Paym will allow consumers to send and receive payments directly to a current account with a mobile number at the same speeds as other money transfer methods.
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The Payments Council claims the industry-wide project is the first service capable of linking every current account in the UK with a mobile number.
Paym will be integrated into customers’ mobile banking and payment applications. Nine banks and building societies have signed up to offer the service, including Halifax Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, HSBC, Lloyds Bank, Santander and TSB Bank.
Customers of these brands will soon have the opportunity to register their mobile numbers and select the current account they want payments made into, before the service goes live.
Adrian Kamellard, chief executive of the Payments Council, said: “We’re all used to the idea of a ‘mobile update’ to improve our apps - Paym is a mobile update for payments that means you can pay securely using just a mobile number.”
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“Paym is a great example of industry-wide collaboration that delivers tangible benefits for customers.
"The service has the potential to link up every bank account in the country with a mobile number - millions of people will be able to use it this year and we look forward to expanding Paym even further, so everyone can benefit from this easy, secure new way to pay.”
Later in 2014 Clydesdale Bank, first direct, Isle of Man Bank, NatWest, RBS International trading as NatWest, The Royal Bank of Scotland, and Yorkshire Bank will also begin to offer the service, adding up to 90% of current accounts.
The Nationwide Building Society has confirmed its intention to join in early 2015, while Metro Bank and Ulster Bank are also considering the proposition.
The Payments Council said users will no longer need to ask for other people’s sort code or account number to transfer money.
“Paym will make it easier to repay a friend for cinema tickets, split a restaurant bill or settle up for a colleague’s birthday collection,” said Kamellard.
Paym is going through a final testing phase, the launch date to be announced in April 2014.