European Union citizens will be able to pay bills anywhere in the 27-country bloc using cards and credit transfers from a single bank account under rules adopted by the European Parliament today.
The aim of the single euro payments area or SEPA is to increase competition in the financial sector, cutting costs and increasing choice for the bloc's 490 million consumers.
Supermarkets and mobile phone services will be able to compete with banks in payments, while the cost of a cross-border transaction will be no more expensive than a domestic one.
"National payments markets continue to be fragmented. All too often payments are slow and expensive and consumers are poorly served," EU Internal Market Commissioner Charlie McCreevy told the EU assembly. "The cost of payments to the economy should be reduced."
SEPA is part of wider moves to integrate the EU financial system and make the economy more efficient. EU countries gave their approval last month, and the European Central Bank was also keen to see SEPA adopted to exploit the benefits of the euro, which is used by 13 countries and accounts for 70 per cent of EU payments.
Consumers will be able to authorise a direct debit to anywhere in the EU from their bank account, helping to open up the choice of goods and services available.