UK mobile users will be able to send and receive money by sharing only their phone number by the spring 2014 the Payments Council has announced.Account owners will be asked by their banks if they want to opt-in to a database that will allow the sending of money by text message.
The scheme is being backed by eight major financial institutions.
Its launch will bring the UK up to speed with technology which has been used for several years in the developing world.
Many African nations use systems such as M-Pesa, which is typically seen as a secure way to transfer funds quickly between individuals and businesses.
Mobiles in the UK are already being used for a variety of online banking tasks, with services such as Barclay’s PingIt simplifying sending money to and from accounts.
But this new set up will be the first to not require users to set-up a separate account with a mobile wallet service.
The scheme will be administered by the Faster Payments service – which processed more than 800 million online and phone banking transactions in 2012 – and the Link network, which processed 3.1 billion cash machine withdrawals last year.
The system will mean people can send and receive money to others by sharing just their mobile number – rather than having to swap other details such as sort code or account number.
However, the Payments Council said a passcode or similar security measure would ensure the system could not be abused.
Also, banks will have the ability to remotely disable accounts suspected of misuse.
Research would be conducted to make sure the limit represented a blend of “convenience and security”, the spokesman added.