Credit unions are to be offered access to the technology behind Barclays' pioneering Pingit mobile payment service so they can operate similar payment schemes without the expense of investing.
Barclays made the announcement as it unveiled a new £1 million cash injection for credit unions, which will be able to bid for the money which they can use to help them modernise and expand, which could involve them taking on new staff or new premises.
The bank said its package of support for credit unions will also include offering them space within UK branches which they can use free of charge. Eventually, potentially hundreds of its branches could be used by credit unions who are ready to grow but need more of a high street presence.
Credit unions will be offered free access to the infrastructure behind the mobile payment service Pingit, which was described as "revolutionary" when it was launched in February 2012 and allows people to send and receive money as easily as texting, using just a mobile phone number. Pingit is already open to non-Barclays customers.
Over 2.5 million people have downloaded Pingit and more than £350 million has been sent through the service since its launch.
Credit unions are mutual financial co-operatives that take deposits and give loans to members. The sector is still relatively small compared with countries such as the United States and Canada. Credit unions in the US serve almost one third of the country's population.
Lord Freud, Minister for Welfare Reform, said he "especially applauds" Barclays' sharing of its expertise and technology with credit unions.
He said: "With this kind of support and investment, and also more people joining their local credit union, we will help the industry modernise and grow."
The Government recently awarded a £38 million grant to credit unions, which are hoping to double their combined existing membership to around two million people in the next five years.
It is hoped that credit unions' beefed-up presence will help them to become a genuine alternative to more expensive forms of borrowing such as payday lenders.
People on low incomes are often said to pay a "poverty premium" for loans because they tend to have limited choice, but it has been predicted that credit unions' expansion drive could save consumers up to £1 billion in loan interest repayments in the coming years.
In March, Lloyds also announced plans to boost credit unions by providing £1 million of funding a year to help the sector grow.
Mark Lyonette, chief executive at the Association of British Credit Unions (Abcul) said: "I look forward to continuing to work closely with Barclays to assist credit unions to provide responsible and attractive financial services to many more people, while doing this in a sustainable and cost effective way."
The use of mobile payments is set for further rapid growth in the coming months. Yesterday, a new mobile payments service called Paym was launched, which has initially been made available to 30 million customers, with more banks planning to come on board by the end of the year. Paym is incorporated into people's existing mobile banking apps.
Ashok Vaswani, chief executive of Barclays Retail and Business Banking said: "We recognise that credit unions provide a vital service to over a million people all across the country.
"That's why we're committed to continuing to support them, not only financially but also by sharing our skills, technology and expertise."