Finance ministers from European Union member states approved a plan Tuesday to facilitate cross-border payments within the 27-nation bloc.

The draft legislation, which is also aimed at reducing transaction costs, is expected to establish a legal framework for payment services within the club. But it still needs the backing of the Council of the EU and the European Parliament.

Under the new rules, all appropriate payment service providers would have easier access to other EU members' markets. The access requirements for non-bank payment service providers like "payment institutions" would be harmonized to ensure a level playing field.

The European Commission estimated that the rules could save the EU economy between 50 billion euros and 100 billion euros per year by reducing transaction costs.

The plan is intended to underpin an industry initiative to establish a "single euro payment area" by 2010 in the 13-nation euro zone.

With integrated payment infrastructures and payment products, the establishment of the single payment area would enable money to move freely between users, regardless of where they are situated