A new mobile payment service with the potential to link up every current account in the country with a phone number is set to be used more than one billion times in the next five years, the UK's payment body forecasts.

The new Paym service, to enable more people to transfer money just by using mobile phone numbers, will be made available to 40 million current account holders by the end of the year, the Payments Council said.

It predicts the number of payments made through Paym will have reached around one billion by the end of 2018, taking into account factors such as levels of mobile phone ownership and payment patterns.

It said Paym, pronounced "pay em", was the first industry-wide collaboration in the UK that could link up every bank account with a mobile number. It will launch later this spring.

The service will allow people to transfer cash payments on their mobile by using the recipient's phone number rather than needing to know their bank account number and sort code.