Britons will be able to send anf receive payments via SMS text messages in 2014, after a database that links people's phone numbers with their bank accounts has been set up by banks and building societies.
The BBC reports that eight major financial institutions are backing the service which is simple to set up and use as it doesn't need separate accounts with mobile wallets and only requires people and companies to know each other's phone numbers to conduct transactions such as paying bills.
Safeguards will be put into place to stop abuse of the system, such as limits on amounts transferred and fraud detection, a spokesperson for the UK Payments Council told the BBC.
The service is also entirely opt-in - users will not have to link their mobile number to their bank account unless they wish to.
The Payments Council did not reveal which mobile providers if any had signed up for the payments service.
Similar systems have become wildly popular in developing countries such as Kenya, where mobile provider Safaricom's M-PESA service was launched in 2009 and now has 17 million account holders in that country alone.
M-PESA has since opened in Tanzania through provider Vodacom, as well as South Africa, Afghanistan, and India where Vodafone is rolling out the service.
In Australia, mHITs Ltd has been active since 2010 with its mobile micro payments service that allows customers to transfer a maximum of $100 a day or remit up to $500 overseas from their bank accounts.
The Commonwealth Bank also offers similar services via its Kaching app - which enables payments via email, social network connections or mobiles. This week the CBA announced the app is now available on Android phones.