Telecoms provider O2 has launched a smartphone app which allows users to transfer up to £500 with a simple text message.
More than 100 retailers have signed up for the service, including Debenhams, Comet, Sainsbury’s Direct and Tesco Direct, which will be free initially but later incur a 15p charge per transaction.
O2 believe that consumers will be drawn to the service despite this however, owing to the convenience and versatility of being able to compare prices in real time and a ‘transaction history’ to keep track of spending.
James Le Brocq, managing director at O2 Money said: "We believe it will transform the way people manage their finances and spend money. O2 wallet has been trialled internally for months and has undergone extensive 'stress-testing' with security experts.
"This is, we believe, the safest and most secure way to deliver mobile payment services."
Designed to speed up purchases from online stores the release constitutes the next step on the road to contactless payments, end game for O2 and many others.
This will be dependent on near-field communication enabled devices but will allow shoppers to purchase goods without the need for a credit or debit card but is being held back until more retailers install the necessary.