The big five bus operators - Stagecoach, First Bus, Go-Ahead, Arriva and National Express - are working together to formulate a plan to support cashless payment on every UK bus by 2022.
They will be producing a business case which is expected later this year. The multimillion pound scheme will be mostly funded by the private sector.
Buses in London already support contactless payment and Oyster cards so this scheme would extend it from London to the rest of the UK's 32,000 buses. The advantages would be faster boarding times for passengers leading to fewer delays and a more convenient method of payment for bus users.
The plans will set out that the scheme will start in Tyne and Wear region in April 2017.
Melanie Johnson, Chair of the UK Cards Association, said: "Payment cards play a key role in our lives and we believe this work contributes to making public transport more convenient for millions of passengers."
Contactless smart cards were first used for electronic transport ticketing in 1992 in Oulu, Finland.