Far from the innovative payment fintechs, from the increasing number of online banks to equip customers with new bank cards with various and varied services, Italy is falling back on itself and saying no to the banks. Coins and banknotes will remain commonplace in a country where the underground economy was estimated at 183 billion euros in 2019. Card payments, meanwhile, will be further banned, as the new president of the extreme right of the Italian Council of Ministers, Giorgia Meloni.
However, for a European country which must respect the directives of Brussels, difficult to take clear measures on a prohibition of cards purely and simply. So to encourage everyone to pay in cash, the new government capitalized on traders. They are eager for payment in cash, which allows them not to have to pay a commission to their bank during each transaction. Giorgia Meloni will give them a gift by expanding their scope of use.
Card ban under €60
In the new budget law proposal for the 2023 budget, the President of the Italian Council wishes to propose to them refuse card payments for any amount less than €60. At the same time, their customers will be able to settle cash purchases up to €5,000, rather than the current cap of €1,000. A purchase limit clearly higher than what we have in France, while card payments have been extended from 1 € and it is not possible to pay in cash beyond 1000 € .
Card payments in Italy are particularly few. The comparison with the European average is representative: only 85 transactions per year compared to 156 on the rest of the continent. European-wide figures which have increased considerably in Europe with the pandemic, while contactless payment in France has seen its ceiling increase from 30 to 50 €. At the same time, the average amount paid by card is higher in Italy, because consumers are not used to paying by card for small transactions. This corresponds to an average of around €47.5 compared to €40 in general in Europe.
Banks will be the main victims of such a measure and could therefore agree to negotiate to lower the commission rates it charges on their merchant payment terminals. Otherwise, Italy would be one of those rare countries where the share of bank card use would decline. In 2021, the European Central Bank (ECB) said that non-cash payments increased by 12.5% year-on-year, with a 49% share going to bank cards (22% for bank transfers).