Italy’s New Government Could Hold Back Country’s Digital Payment Push

Italy could give merchants permission to decline digital payments on transactions under 60 euros.

New prime minister Giorgia Meloni has proposed that change in her draft budget for next year, as well as plans to increase the limit for legal cash transactions from 1,000 euros to 5,000 euros, the Financial Times (FT) reported Sunday (Dec. 4).

Meloni, head of the far-right Brothers of Italy party, has a history of criticizing Italy’s long-time efforts to move the country toward digital payments, calling them a “hidden tax” on families and small businesses, the FT said. She had previously called limits on cash an attempt by the government to overstep the bounds of its power.

The FT said the move could see resistance from the European Union, which has wanted Italy to increase its digital payment use. And opposition politicians said Meloni would be moving the country backward.

“It’s a mistake that will increase tax evasion,” Carlo Calenda, who leads the centrist Azione Party, told the Financial Times. “It’s designed to satisfy small businesses that work mainly with cash to avoid tax payments.”

The report noted that Italy is one of Europe’s lowest digital payment adopters, citing figures from the Bank of Italy. The average Italian consumer makes 85 card transactions per year — the fewest in Europe — versus 155.9 per year for the EU.

As PYMNTS' research has found, Italy’s digital engagement is being held back somewhat by a generational divide.

Among Italy and the other countries we studied — the U.K., Netherlands, Germany, France, and Spain — the data showed a high level of engagement among millennials, slightly lower among Generation Z, and even lower than that among Generation X.

The generations with the least digital engagement were the baby boomers and seniors. The data also showed that countries such as the U.K. and the Netherlands are over reliant on the spending power of millennials when it comes to fueling sustainable digital economies.

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