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Spotlight: Italy's mobile payments on rise despite overall laggard non-cash payments

Xinhua, April 3, 2017 Adjust font size:

Italy, one of Europe's long laggards in non-cash payments, is unexpectedly emerging as one of the continent's leaders when it comes to digital payments tied to smart devices.

According to Valeria Portale, director of the Mobile Payment and Commerce section at the Politecnico University of Milan, 17 percent of all digital payments in Italy are now processed via "mobile commerce," which is higher than just 14 percent in the United States or Britain.

The term "mobile commerce" refers to the small but fast-growing digital payment sector that uses of mobile devices in lieu of credit cards to process payments.

Via wireless technology, consumers are able to finish a payment anywhere with their phones. The capability won "mobile commerce" a fame of "a retail outlet in customers' pocket."

Portale says such "mobile commerce" is on a positive trend in Italy.

"It's a positive trend. I think Italians still love cash, but maybe for some people they love their mobile phones even more," Portale said.

"So Italy is showing relatively higher rate when it comes to the percentage of digital transactions processed via mobile commerce methods," explained the expert on mobile payment.

But compared with burgeoning mobile payment, the overall use of electronic payments in Italy still lags behind most of the European Union (EU) countries.

Despite an increase of over 50 percent between 2015 and 2016, Italy still ranked 25th among the 28 European Union members states, dropping a notch after being passed by Hungary last year.

The only EU member states that use electronic payments less than Italy are Bulgaria, Romania and Greece.

And the growth is also slower than the EU as a whole.

Denmark is the EU member with the highest level of digital transactions, followed by Sweden, Finland and Britain. The average Dane makes more than 300 digital payments per year, compared with just 43 in Italy, Portale said.

"Cash is still the king on Italy," Portale told Xinhua. "Italians still prefer to use cash, businesses still prefer cash. It's changing, but it's changing slowly."

Ferdinando Maria Ametrano, a digital payments expert with Milano-Bicocca University, attributed Italians' unwillingness in non-cash payments to the lack of faith in institutions.

"There's a psychological comfort from having cash. It's something real, something people can hold in their hands," Ametrano said in an interview.

But too much cash transactions could have adverse effects on Italian economy, including tax evasions and the oversize underground economy, as cash transactions are much more difficult to trace.

Italy's underground economy is already among the largest in the industrialized world.

According to information released last year by the Italian National Statistics Institute (ISTAT), Italy's underground economy hit 211 billion euros (226 billion U.S. dollars) in 2014, which accounted for about 13 percent of the country's economy.

Tax officials say the massive underground economy is one of the main challenges Italy need to deal with in its efforts to balance its national budget. Endit