POS: the rise of contactless payments – but cash remains the most widely used method in shops

An incentive to stop getting your wallet out: in 2025, 88 per cent of POS payments in Italia were made contactlessly, and 24 per cent of transactions were carried out via smartphone or smartwatch. Physically inserting a card into the terminal – a gesture that was the norm until just a few years ago – has become a rarity. Yet, according to the European Central Bank’s latest SPACE survey, covering 2024, cash remains the most widely used method of payment in Italian shops: 61 per cent of point-of-sale payments, by number of transactions, are still made using banknotes and coins.

This is what emerges from the Bank of Italia’s new report, published yesterday. Payment technology has become faster and more seamless, but it has not replaced cash: it has complemented it. Between 2018 and 2025, transactions using alternatives to cash more than doubled, exceeding 16 billion transactions. This trend intensified during the pandemic and became firmly established in the years that followed, signalling a structural shift in payment habits.

Growth is being driven primarily by card payments, which accounted for 75 per cent of non-cash transactions in 2025, up from 63 per cent in 2018. Between 2022 and 2025, card payments at POS terminals rose from around 6 billion to over 10 billion transactions, at an average annual rate of 15.7 per cent. Growth is not uniform across product types: debit cards recorded an average annual increase of 17.1 per cent and prepaid cards 15.1 per cent, compared with 9.1 per cent for credit cards. In 2025, debit cards accounted for 71.2 per cent of POS transactions, prepaid cards for 17.4 per cent and credit cards for 11.6 per cent.

Cash, for its part, is not disappearing: it is simply becoming less prevalent. Withdrawals have fallen from around 1.4 billion transactions in 2018 to just over 1.2 billion in 2025, with the decline concentrated in 2020 – the year of the pandemic – followed by a stabilisation at lower, but not decreasing, levels. ATMs remain the dominant channel, accounting for 88 per cent of total withdrawals in 2025; cash withdrawals at the till, whilst on the rise, account for just 0.3 per cent of the total.

The regional picture confirms that disparities remain wide but are narrowing: between 2020 and 2025, the number of per capita transactions using alternative payment methods rose by 88 per cent in Central Italy and by 121 per cent in Southern Italy, although the starting point was lower there. In 2025, the number of POS card transactions per capita remains at 194 in Lazio compared with 124 in the South. As regards access to cash, the network has shrunk but remains widespread: the number of bank branches has fallen from 34,000 in 2008 to just over 19,000 in 2025 (-40%), whilst 98 per cent of the Italian population lives within 5 kilometres of a cash access point, with an average distance of 1.2 kilometres.