Five major UK financial services firms have committed to rolling out mobile payments technology from Zapp, enabling customers to make in-store and online purchases from within their banking apps.
HSBC, first direct, Nationwide, Santander and Metro Bank will embed Zapp within their phone and tablet apps, bringing the technology to their 18 million customers.
Steve Pateman, head, UK Banking, Santander, says: "Our customers want the choice to be able to pay on the go using mobile technology, and the Zapp proposition is second to none with its capabilities."
However, RBS, Lloyds and Barclays - which has its own Pingit mobile payments system - have not signed on.
Set up by VocaLink last year, Zapp is bypassing the card networks by integrating its system directly into bank apps and tapping into the Faster Payments rails for mobile payments - in store, online and through apps.
For purchases at participating retailers, customers who choose to pay by Zapp will be taken to their banking app, where they will log in, see their balance, and confirm the purchase.
Zapp argues that its system is both more convenient and secure than other options because customers do not need to hand over any card information. Instead a token that lasts only for a few minutes and has no intrinsic value but represents the request and authorisation of payment, is passed between the retailer, Zapp and customer's bank.
Zapp says that it is in talks with several major retailers about introducing the technology at the checkout and has already struck deals with major payment processors WorldPay Optimal Payments, Realex and SagePay.
Trials for the e- and m-commerce features and a bill payment option are slated for the summer ahead of a full launch by the end of 2014. In-store payments - which may prove a trickier problem - will follow in 2015.
VocaLink has invested heavily in Zapp, pumping £33 million into the business as it seeks to grab a share of a mobile payments market expected to explode. According to the Centre for Economic and Business Research, 20 million adults will use their mobiles to pay for goods and services by the end of the decade, with the value of purchases tripling from current levels to £14.2 billion in 2018.
Zapp will face stiff competition from the likes of PayPal, Google, the UK's telcos, and Visa and MasterCard but hopes that by working directly with banks, it will come out on top.
Peter Keenan, chief executive, Zapp, says: "I am truly excited to announce our lead financial institution partners: HSBC, first direct, Nationwide, Santander and Metro Bank. Together with our already announced acquirer partnerships, Zapp will go to market with real scale offering simpler, more secure and efficient payments to millions of customers and businesses."