This article describes the recent developments in Italy regarding digital payments, such as the growth of the PagoPA payment service provider, the impact of the COVID-19 contagion and the risks of fraud and tax evasion. It also discusses the various technologies available to consumers, including Contactless and mobile payments. However, there are many questions that still need to be answered before Italy can truly embrace digital payments. To answer these questions, we asked two experts who have over 20 years of experience in the payments industry to provide some of the latest insights into the state of digital payments in the country. Go to affaritaliani.it to learn more.
Contactless payments
With the rising use of digital payment solutions, Italian consumers are also adopting these new methods of payment. Despite the COVID-19 crisis, the Italian consumer is increasing their usage of digital payment solutions. And this trend will continue in the medium term. In this article, we’ll look at the key drivers for this change in consumer behavior. And we’ll explore how this technology can help make payments in Italy even easier. For more information, read on.
While Italy has a long way to go to fully move away from cash, it has already made major steps. In January 2019, less than half of Pos transactions in Italy were made using contactless NFC technology. By autumn 2021, that percentage will be 74%. With a focus on digital payments, Italy is paving the way for a cashless society. And if this trend continues, consumers will be more likely to adopt it.
Growth of PagoPA
The Italian government has boosted the growth of PagoPA to a critical role in the digitalization of public services. The Italian government has been working on digitization for three years now and has adopted digital innovation as a major pillar to aid the country’s recovery. On 7 July, the Prime Minister’s Office approved the “Simplifications” Decree Law, which included the inclusion of PagoPA as a key element. The company has a new head of Digital Transformation Luca Attias, which will continue to lead the growth of this platform in the country.
The platform has already demonstrated impressive growth, as the average payment through pagoPA is 190 euros. With the help of pagoPA, consumers can pay for public services easily and securely using their mobile devices. The company’s software integrates with various channels, including post offices, supermarkets, lottery retailers, and ATMs. Its innovative technology allows citizens to pay through several payment methods, and the government can view the number of completed payments with ease.
Impact of COVID-19 contagion on adoption of digital payments
The impact of the COVID-19 contagion on digital payments in Italy is largely unknown. The outlook for the industry rests on assumptions about the overall health of the economy, the spread of the virus and the effectiveness of fiscal and monetary measures. In an optimistic scenario, the virus will be contained within two to three months. The impact on the payments industry will be more severe for merchant-services businesses.
In Italy, territorial differentiation is particularly strong. In the southern and eastern regions, youth unemployment rates are well over 50%. In contrast, in the northern region, Bolzano-Bozen, the youth unemployment rate is only 10%. The contagion is likely to have an adverse impact on adoption of digital payments in Italy. But it will be a gradual process, with the country’s larger cities gaining more digital adoption.
Potential for fraud and tax evasion
In an interview with the Guardia di Finanza in 2004, Silvio Berlusconi argued that ‘tax evasion is every Italian’s moral right.’ He added that if the state became too burdensome, people would find ways to evade taxes. This was the basis of the digital payments scandal, which has caused a flurry of investigations across the EU.
The new Italian VAT law requires companies to submit invoices electronically to an online tax hub called the SDI. Once submitted, invoices are checked by tax authorities, and then sent to the intended recipient. It is illegal to send VAT invoices directly to clients, and Spain, Poland, Greece, and Italy have all introduced similar systems. Consequently, these countries have seen an increase in tax collection. This new legislation carries the potential to reduce tax fraud.
Challenges for small, traditional shops
While other countries have made the transition to accepting digital payments, Italy has lagged behind. Large companies and retailers are increasingly accepting digital payments in Italy, while smaller, family-run shops often lack the negotiating power of larger enterprises. Here are some tips to increase sales for small, traditional shops. Read on to discover how you can make the shift. But first, let’s look at the market.
As consumers shift their habits, they are using both online and offline tools to make purchases. The Politecnico University of Milan estimates that over 50% of online purchases in Italy are now started using personal smartphones. While most stores were digitally prepared before the pandemic began, it has only been recently that consumer behaviour has changed. Here are some tips for small, traditional stores to use digital payments:
