A financial technology company backed by billionaire Sir Richard Branson has become the first non-bank to gain access to a crucial part of the UK's payments infrastructure as it battles to compete with big banks.

Money transfer start-up TransferWise, which is also backed by PayPal co-founder Max Levchin and has protested against the "wrongness" of hidden bank fees in the past, was granted access to the Bank of England's real-time payment systems on Wednesday.

The move puts the seven-year-old company in direct competition with traditional lenders as it can now process payments in the UK without needing to go through a bank or third party first.

Its access to the 'Real Time Gross Settlement' system, which processes payments immediately, comes a year after Bank of England Governor Mark Carney warned that new entrants could damage the business model of traditional banks as people search for cheaper and more accessible options. He said on Wednesday that he hoped the increased competition would "reinforce financial stability" in the UK.

Founded in 2011 by Estonian friends Taavet Hinrikus and Kristo Käärmann, the British web start-up claims to "remove all the wrongness" of sending money abroad by removing millions of pounds worth of hidden bank fees. It transfers over £1.5bn overseas every month.