In Rome’s central shopping street, Via del Corso, Maria Lipari is looking for a scarf to give to her daughter for Christmas. Like many Italians, she prefers to pay for her festive gifts the old-fashioned way — with cash. But the Italian government hopes to persuade her to change.
Italy has one of Europe’s lowest rates of usage of card payments, with 86 per cent of transactions paid for using notes and coins, according to central bank estimates. But from next year, the government plans to offer financial bonuses to those who use cards or other electronic payment systems.
The government will put aside €3bn to finance the bonus in next year’s budget and hopes that an increase in electronic bill settlement will raise significantly more for the state by making tax fraud and black economy transactions more difficult. Details of the system will be fleshed out next year.
Many Italians remain suspicious of electronic payments. “If I use cash I can see exactly how much money I have in my wallet,” Ms Lipari said. “If I use a credit card I spend €50 here, €50 there, and you end up emptying your pockets.”
Roberto Gualtieri, economy minister, said this year that the government intended to bring about a “cultural change in Italy . . . to change the behaviour of consumers and align them more closely to the most virtuous of other European countries”.
Italians used alternatives to cash — such as cards or bank transfers — on average 100 times per person in 2017, while in the Netherlands the number was 424. Giorgio Di Giorgio, a professor of economics at Luiss university, said there were “good and bad” reasons for the enduring prevalence of cash.
“Italy is an older country that gives a lot of weight to tradition. Older people are less likely to change what they have been doing for their entire lives,” he said.
“The bad reason is that Italy’s black economy is one of the biggest in Europe — maybe only Greece is worse. This means more cash is used, compared with more traceable ways of paying.”
Italy has the highest rate of VAT fraud in the EU, according to a report published this year by the European Commission. The report concluded that the difference between the amount of VAT paid and what should have been collected by the Italian authorities amounted to €35bn in 2015, only slightly lower than the estimated €41bn gap in 2014.
Italy’s official statistics body estimated that the “non-observable economy”, or the combination of the black market and criminal activity, was worth €211bn in 2017, or 12 per cent of total economic output for that year.
Yet previous efforts to stop payments for large purchases in cash have been unpopular. In 2011 Mario Monti’s government lowered the maximum legal amount for which it is possible to settle a bill in cash to €1,000 but the government of Matteo Renzi increased the limit to €3,000 in 2016 after a backlash.
Riccardo, a man walking through Rome’s main shopping street in his forties who declined to give his surname, said he preferred cash because he did not want his habits to be tracked by banks: “I want to keep how I spend my money to myself.”
Some politicians have continued to rail against attempts to lure citizens away from cash. Giorgia Meloni, leader of the hard-right Brothers of Italy party, attempted unsuccessfully to amend the current budget law to ban any limits at all on payments in cash.
Her pitch was to appeal to the common man, arguing that regular Italians using cash were not the problem. “The real tax evasion is not that of small shopkeepers but of big corporations who pay taxes in other countries, and not Italy,” she said.
Yet there are signs that newer, user-friendly online banks are winning over younger Italians who are less attached to hard currency than their elders.
Gianmarco Spera, a 23-year-old student out shopping for a present for his girlfriend, said he preferred to use digital payments. “If you pay by card, or even better your phone, you don’t have to carry cash around.”
Mr Di Giorgio believes it is only a matter of time before Italians become more amenable to ditching cash in favour of cards.
“It is a generational thing,” he said. “Gradually it will change, but you need time. And also maybe a bit of a push from the government to change attitudes.”