Innovative Payments: is Italy turning into a cashless society?

  • 19/05/2020  |
Innovative Payments: is Italy turning into a cashless society?

From a consolidated cash culture, the country has begun opening up to this change mainly thanks to an improved computer literacy, the young and the rise of contactless transactions made via wearables.

Methods of payment are constantly evolving, and despite historically being a country with a consolidated cash culture, in recent years Italy has begun opening up to the use of innovative payment systems, a change which has mainly been driven by improved computer literacy and a new generation of digitally-savvy younger people who have grown up using new technologies.

Though cash still plays an important role in the country’s everyday life, card payments are already commonplace in Italy, accounting last year for a total of 270 billion Euros’ worth of transactions, and they are being used with increasing frequency even for smaller purchases.

As contactless payment has become an integral part of everyday life, the infrastructure to support it has expanded too. The country currently possesses over two million Point of Sale (POS) machines, 90% of which are enabled for contactless transactions, hinting at how commonplace this method of payment has become. In fact, 2019 saw a growth of 67% in the number of contactless payments made in Italy, for a total of 1.5 billion transactions.

Though still limited, the number of contactless transactions made via smartphone and wearable devices is also on the rise. Payments made via smartphone and wearables in 2019 accounted for 3.1 billion Euros’ worth of sales, the relatively small size of the sum perhaps due in part to the fact that contactless payment is often used for low-priced items such as tickets for public transport.

58 million in-store smartphone transactions were made in 2019 for a total of 1.83 billion Euros (the number of Italians using this method tripling over the year from one to three million) while out-of-store smartphone payments like telephone top-ups or mobility-related services accounted for a total of 1.24 billion Euro, hinting at the scale of possible future growth in the sector.

Although accounting for only 70 million Euros’ worth of transactions in 2019, payments with smartwatches and wearable payment devices are also gradually beginning to make inroads into the country’s habits. Wearables devices like smartwatches or bracelets offer a handy and convenient way of paying: they are linked to the owner’s debit or credit card and use Near-Field Communication (NFC) technology to allow contactless payment, which is carried out via a tap or a swipe. Passive wearables require the PIN code to be entered in the POS machine while with active wearables the payment is completed with a single tap.

The use of passive and active wearable devices for payments is on the rise all across Europe, with 2019’s wearable transaction figures showing an eightfold increase over 2018, so it seems clear that over the coming years we will begin to see increasing numbers of Italians adopting wearables too.

Whether they will take as easily to the ‘invisible’ payment systems now being developed which use facial recognition technology to identify and charge shoppers remains to be seen, and will probably depend upon how privacy and security issues related to sensitive data are handled.

One thing is certain, though – a new generation of Italians are relinquishing their dependence on physical money and gradually moving the country towards a cashless society. A cultural shift which will only be accelerated by the experiences of those the Covid-19 emergency has obliged to use cashless payments for goods and services for the first time, giving them the opportunity to see first-hand just how useful they actually are.

In Insurance for example, the simplicity and swiftness of cashless payments can be enabled by multichannel and multi-bank digital payment platform, such as UNIPAY of RGI Group, that empowers Insures to use any kind of wireless and online transaction.

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