EU ministers set to adopt payment card rules

(Adds Steinbrueck quote)

By Huw Jones

BRUSSELS, March 27 (Reuters) - 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 due to be adopted by finance ministers on Tuesday.

The aim of the single euro payments area or SEPA is to increase competition in the financial sector, cutting costs and increasing choice for consumers.

"We will get an agreement on SEPA today. It will be a huge asset for consumers to bring down prices," German Finance Minister Peer Steinbrueck said on arrival for a meeting of the 27-nation bloc's finance ministers.

The European Commission, which proposed the measure, expects SEPA to save the EU economy 50-100 billion euros ($66.4 billion to $132.7 billion) a year by making a cross-border transaction just as cheap as a purely domestic one.

The new pan-EU payments system based on common technical standards would end the current national patchwork, making it easy for new entrants to offer payment services competing with banks cross-border.

It should also boost new types of payment services, such as over mobile phones. The European Central Bank says the move would exploit the benefits of the single currency by encouraging cross-border competition in services to boost growth.

SEPA would enable the EU's 490 million citizens to use any credit or debit card outside their home country and authorise direct debits across the bloc, all from one bank account.

"A more efficient and competitive payments market will also mean that individual Europeans pay less for basic banking services, the average yearly cost of which ranges from 34 euros to as much as 252 euros across the EU," the Commission said.

The rule would apply to all EU states and currencies.

It gives legal underpinning to the single euro payments area system the banking industry aims to start in January 2008 and replace national systems with from 2010.

EU states and the European Parliament have joint say on the measure, which will cost banks billions of euros to put into practice.

EU lawmakers have requested some last-minute changes, such as on the amount of time for which a payments firm can grant credit.

((Editing by Paul Taylor; Brussels newsroom + 32 2 287 6817, huw.jones@reuters.com))

($1=.7534 euro) Keywords: PAYMENTS EU/

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