Europe's tax collectors and other public administrators need to take the lead in adopting eurozone-wide cashless payment systems, and help speed up the integration of fragmented national schemes, the European Central Bank has urged.

The ECB's appeal is the latest attempt by European Union policymakers to force the development of simpler, cheaper and more effective systems for euro bank transfers in the 12-country region.

The European Commission is preparing to warn that banks could face regulatory action if new payment products and systems do not meet market requirements. The Commission's proposals are expected to be presented on Monday.

The euro was launched in 1999, with euro notes and coins introduced at the start of 2002.

But cashless payment systems remain largely national schemes, making it difficult and costly for consumers with a bank account in one country to make cashless payments in another.

In its latest report on a single euro payments area (Sepa), the ECB warns that the completion of such a zone is still "a long way off".

The Commission and the ECB have both criticised banks for dragging their feet. But in its report the Frankfurt-based central bank says governments could lead the way.

"Given the political nature of the Sepa, it is also very important that public administrations, as heavy users of payment services, set an example and are among the first to move to the Sepa," the report says.

Among the services that could adopt Sepa systems are fiscal authorities, making it easier for eurozone citizens to settle cross-border tax liabilities, although the ECB does not discuss whether that would make such payment systems more popular with the public.

Sepa would create a eurozone "in which all payments are domestic, where the current differentiation between national and cross-border payments no longer exists", the ECB says.

But it admits deadlines for implementing Sepa have had to be modified. A year ago the ECB hoped that a fully integrated retail payment clearing system and settlement infrastructure could be completed by 2010.

The latest report accepts that full integration by that date is "unlikely to be achieved". The delay reflects the expectation that more time might be required before national systems can be phased out and that banks' investment cycles might prevent the consolidation of infrastructure by 2010.