Update: 2 April 2014: The Payments Council has announced today that the Paym service will go live on Tuesday 29 April – meaning consumers will soon be able to transfer cash using just a mobile phone number. Customers of certain banks can register now ahead of the launch (see a full list on the Paym website).
Smartphone users will soon be able to pay for goods and services simply by using the recipient's mobile phone number.
The service, called Paym, is expected to be launched in April for customers with current accounts at nine of the UK's biggest banks and building societies (see our Best Bank Accounts guide for the best buys).
The Payments Council, which is behind the scheme, says the service can be used to split a restaurant bill with friends or pay traders without having to know sort codes and account numbers.
It adds that the industry-wide project is the first service with the potential to link up every current account in the country with a mobile number, although Barclays' Pingit app, which launched in 2012, already allows customers of any bank to send and receive payments using just a mobile phone number.
How will it work?
Paym – pronounced "pay 'em" – won't have its own smartphone app or website. Instead, it will be part of each participating bank's online and mobile banking facilities.
Once the service is live, you'll be able to register with the service through your bank's app by entering your mobile phone number and selecting the account you want to link it to. Then you'll be able to receive money into this account and make payments from it using your number.
To make a payment, you just select the person you want to pay from your mobile phone contacts, or enter a mobile phone number.
Which banks will be using it?
Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, Halifax, HSBC, Lloyds, Santander and TSB will be part of Paym when it launches.
First Direct, Clydesdale Bank, Royal Bank of Scotland and Yorkshire Bank will join later this year, while Metro Bank, Nationwide and Ulster Bank will be part of the scheme in 2015.
I don't have a smartphone. Can I still use this service?
If you don't have a smartphone you won't be able to make payments. But people can still pay into your bank account using your mobile phone number. You'll need to call your bank to set it up.
What if I accidentally type in the wrong mobile number?
When you enter a number to make a payment, the service will check whether the recipient is registered and then display their account name.
So if you've mistyped a number, the wrong name will appear and you'll be able to cancel the request.
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How long will payments take?
Although there may be some slight variation depending on who you bank with, the Payments Council says most transfers will be completed "almost immediately".
Is it secure?
The Payments Council says as users need to log into mobile banking to use the service, and have to confirm the name of each person they send money to, the service will be secure.
'Millions' could use it
Payments Council chief executive Adrian Kamellard says: "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.
"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."