EU law makers reached "political agreement" on the new rules on Tuesday, the European Commission said. Both the European Parliament and the Council of Ministers, which contains representatives from the governments of the 28 EU countries, have still to formally approve the new directive.
The Council of Ministers said the new directive would provide a "clear, robust and technology-neutral legal framework" for combatting fraud in non-cash payments. The rules will apply in future to fraud for all types of non-cash payment, including transactions in virtual currencies and mobile payments.
Theft and misappropriation of payment credentials, as well as the further sale and distribution of those credentials, will also be criminalised under the provisionally agreed rules, the Commission said.
The new rules will also apply a harmonised approach to penalties for non-cash payment fraud across the EU. Minimum prison sentences of five years would be levied in some cases, according to the Commission.
The Commission said: "The current rules on criminalisation of non-cash payment fraud are set out in the Council Framework Decision dating back to 2001. It has become clear that those rules no longer reflect today's realities and do not sufficiently address new challenges and technological developments such as virtual currencies and online payments."
Once the new rules have been formally adopted and entered into EU law, member states will have two years to transpose them into national law.
Josef Moser, minister of justice of Austria, which currently holds the presidency of the Council of Ministers, said: "Fraud with credit cards or online shopping is on the increase. It undermines trust, and makes consumers more reluctant to shop online. Moreover, the proceeds from this sort of fraud are used to finance criminal groups. [This] agreement is a step towards closing legal loopholes between member states and introducing common rules that will ensure that fraud does not go unpunished."