HSBC, Nationwide, Santander, Metro Bank and First Direct have all partnered with UK payments infrastructure operator VocaLink to enable consumers to purchase products using their smartphone.
The mobile payment system, dubbed Zapp, allows customers to pay for goods or services in shops or online without the need for cash, debit or credit cards.
It will be built into banks' existing mobile apps, giving users the option to turn their bank account into a payment system instantly and transfer money directly to the business.
VocaLink believes that this method is more secure than using a debit or credit card because none of the personal information about the customer is handed over to the merchant.
Zapp is expected to launch in autumn 2014, and alongside the lenders, it has also partnered with payment processing firms WorldPay, Sage Pay, Real Ex Payments and Optimal Payments, who will pay VocaLink a fee each time the app is used.
If the consumer wants to pay online through a smartphone or tablet they can select "Zapp" as an option to pay; if they're online on a PC, they can download a Zapp icon which will send a notification to their mobile device. There is also the option of paying for bills - as long as the company provides a QR code in the paperwork that can be scanned using the smartphone's camera.
Consumers in a store will be able to pay using Zapp by tapping their phone on a near-field communication (NFC) terminal, scanning a QR code from a screen or by asking the retailer for a six-digit code.
This requires many retailers to invest in the necessary equipment, but VocaLink hopes that the big names it has as partners will convince stores that it is a worthwhile investment.
But the firm arguably faces a bigger challenge in convincing consumers that mobile payments is a more convenient way to pay than cash or cards. Several firms have dipped into the mobile payments market with moderate success. Telefonica's O2 Wallet was shut down after only 18 months, while Barclays, PayPal and Orange offer other alternatives.
Eden Zoller, an analyst at Ovum, said that Zapp has made a good start but that it needs the backing of even more financial institutions to become a single, industry-wide payments platform.
"Zapp will need to get the other major UK financial institutions behind it, such as Barclays, which has its own Pingit application that is proving popular in its own right," he said.
"Alongside this, with more countries and regions developing faster payments infrastructure, if Zapp proves successful in the long term, it could prove to be a model for other markets. Visa and MasterCard will likely be watching developments closely," he added.
Last year, research firm Gartner said that payments via smartphones would reach a value of over $235bn (£154bn) in 2013, with the number of mobile payment users worldwide reaching 245 million.
It expects global mobile transaction volume and value to average 35 per cent annual growth between 2012 and 2017, and predicts a market worth $721bn with more than 450 million users by 2017.