Italians are a people who are strongly attached to their cash, but is that culture about to change? Convenient mobile terminals combined with new payment-related legislation might just be the catalysts that finally make card transactions the norm for small business in Italy.

Cash still king in Italy – for now

Why is it that card transactions have been relatively slow to take off in Italy as compared to other European nations? There are two principal reasons. The first is the strong emotional attachment that Italian consumers have to cash. According to the Osservatorio delle Carte di Credito Assofin, for transaction amounts of between €30-100, 3 in 4 Italians will choose to pay by cash.1

What’s more, while a Brit or Swede would think nothing of paying for a coffee with their credit card, this is still not common practice in Italy, especially in smaller bars and cafes. The second reason for the lack of widespread card usage is a desire by some Italian businesses to keep transactions “under the table” and thereby evade paying taxes.

Italian government legislates to encourage card transactions

Determined to boost tax revenues and card transaction volumes, the Italian government has introduced two pieces of legislature that may shake up the Italian cash-based culture. Since March 2012, it has become illegal to make transactions of greater than €1,000 in cash.

Even more strikingly, from June 2014 it became mandatory for Italian businesses to offer Chip & Pin machines as an option for transactions over €30. The aim of this law is to decrease cash transaction volume while making payments more traceable, leading to higher tax volumes. There are, however, no penalties in place for businesses who don’t offer a card option so this recent legislation may be seen as toothless by some observers.

Ingenico oversees dramatic mPOS growth in Italy

With the new payment legislation in place, mobile point of service operators are working to capture new business in Italy . French-based Ingenico Mobile Solutions reported that more than 45,000 merchants had adopted its white label payment solution just six months after launch, with over 1 million transactions being completed in that time. 2

The French provider has partnered with more than 80 Italian banks and telcos to bring its white label payment solution to the market.

SumUp: A competitively priced service for Italian businesses

SumUp launched its mPOS solution for Italy in November 2012. The Berlin and London-based startup offers its mobile service to the Italian market for a reasonable 1.95% per transaction. There are no fixed or monthly fees. The mobile payment terminal costs €79.00 before VAT. As for card compatibility, Sumup’s Italian service accepts credit and debit cards from Maestro, VPay, Mastercard, Visa and American Express.

Payleven: An expensive but otherwise comparable solution

Payleven is another mobile payment provider that is looking to get in on the action in Italy. The Berlin-based company launched its Italian service in September 2012. Payleven charges a flat rate of 2.75% for transactions with no monthly fees. This is considerably more expensive than SumUp. Payleven’s Italian mPOS service accepts Visa, V-Pay, MasterCard, Maestro and American Express credit and debit cards. The Chip & Pin reader can be ordered for €79 (excluding VAT).

References

1. Associazione Italiana del Credito al Consumo e Immobiliare, Ricerche e studi (Italian)
2. Ingenico Group, IngenicoMobile Solutions supporting mPOS momentum in Italy, Press release 4 March 2015.