Why Italians aren't betting on the government's latest cashless gamble
Cash use is extraordinarily high in Italy, compared with rest of Europe. In 2016, the ECB estimated that 6 in 7 payments are made with cash, and surveys show that Italians view cash as the most convenient payment method, the one that offers them the most control on their spending. Regardless, the Roberto Gualtieri, the Minister of Finance since September 2019, hopes that "a push from the government" will change resistance to payment cards.
"[The scheme should bring] cultural change in Italy . . . to change the behavior of consumers and align them more closely to the most virtuous of other European countries”
Shoppers who pay with card will be offered a 2% return on tax but critics argue that this will only benefit the rich. Italian shoppers interviewed by Reuters expressed concern that a cashless culture push will result in overspending. Others are skeptical that the policy will succeed in changing payment behaviors in Italy at all. Hard truth: no one wants to pay for transaction fees, especially for €2 gelato.
"If I use cash I can see exactly how much money I have in my wallet. If I use a credit card, I spend €50 here, €50 there, and you end up emptying your pockets."
The new payments policy is a gamble, but the risk isn't only on the personal economic level, it's a national concern. Despite slipping back into recession this time for the third time in a decade, the Italian government is investing €3 billion to finance the cashless scheme in next year’s budget in hopes of tackling what is extremely high levels of tax fraud.
Only time will tell how the public will respond to the payments policy, but the stakes are high for Italy. This is not the first time, nor will it be the last, that cash is used a scapegoat by politicians in moments of desperation. In January last year, Italy was threatened with "severe fines" of $3 billion by the ECB for failing to tackle their public debt, which is the second highest in Europe at 132% of GDP.
Four years ago, Mario Renzi's government lifted the 2011 restrictions on cash payments from €1000 back to €3000 in response to widespread backlash. Perhaps there is still hope for this cash-restriction to be overturned if the public protest the matter.