A new mobile payment service with the potential to link up every current account in the country with a phone number is set to be used more than one billion times in the next five years, the UK's payment body forecasts.
The new Paym service to enable more people to transfer money just by using mobile phone numbers will be made available to 40 million current account holders by the end of the year, the Payments Council said.
The Payments Council predicts that the number of payments made through Paym will have reached around one billion by the end of 2018, taking into account factors like levels of mobile phone ownership and payment patterns.
It said Paym, which is pronounced as "pay em", is the first industry-wide collaboration in the UK which could link up every bank account with a mobile number.
Paym will launch later this spring and the exact date will be confirmed next month. Customers of Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, Halifax, HSBC, Lloyds Bank, Santander and TSB Bank will be able to use the service from spring, meaning it will initially be available to 30 million people.
The service will expand its reach later in 2014 to be available to 40 million people, when Clydesdale Bank, first direct, Isle of Man Bank, NatWest, Royal Bank of Scotland and Yorkshire Bank come on board. By this point, Paym will be available on more than nine out of 10 current accounts.
Nationwide Building Society has confirmed its intention to join in early 2015, while Metro Bank and Ulster Bank are also finalising their launch plans.
The service will allow people to transfer cash payments on their mobile by using the recipient's phone number rather than needing to know their bank account number and sort code.
People will need to register with their bank or building society to send and receive money through the service, which will be integrated into their existing mobile banking or payment app.
To make a payment, you can either select the contact you wish to pay from your phone or key in their mobile number. The app will ask you to confirm the name of the recipient and the amount before the money is sent.
A payment made through Paym will travel as quickly as transferring money online from a current account.
The Payments Council said the UK is one of the first countries in the world to launch such a cross-industry scheme but some countries, like Sweden, have similar services in place.
Consumer research carried out by the Payments Council among over 2,000 people found that people would be most likely to use Paym to ask friends or family to pay them back for items such as dinner and cinema tickets.
The research also indicated people are likely to use the service to ask work colleagues to pay them back or to transfer money around birthdays and Christmas.
Although it is anticipated that many people will use Paym to make small payments, they will be able to transfer at least £250 a day under the scheme if they want to and it will be up to individual banks and building societies where they want to place caps above this amount.
By 2012, over 28 million people were using online banking in the UK and more than nine in 10 adults now owns a mobile phone.
Mobile payments technology is already making it easier for people to ditch their wallets.
Barclays' Pingit app, which launched just before the 2012 Olympic Games, has picked up 2.5 million regular users in the last 18 months alone.
Pingit, which is available to both Barclays and non-Barclays customers, also allows people to make payments using just mobile phone numbers.
Another mobile payments scheme, called Zapp, is set for launch this autumn , which among its uses will enable people to pay bills sent through the post by scanning a code into their handset.
Zapp is a subsidiary of payments provider VocaLink, the company behind Link cash machines.
Adrian Kamellard, chief executive of the Payments Council, said: "As more and more services become available via mobile phones, it makes sense that there is plenty of demand to improve the way we can use them to pay.
"Paym will enable millions of people to pay securely using just a mobile number from spring this year. In a world where many of us are inseparable from our phones, it's readily believable that more than one billion of these payments could be made in the next five years."