Digital payments, year end with over 470 billion transacted

In the Italian fintech ecosystem, digital payments play a leading role. As many as 46 out of some 620 start-ups deal with pgaments, as emerged from the Milan Fintech Summit currently taking place in Milan. On the other hand, electronic money is increasingly taking away space from cash. In the first six months of 2024, digital payments in Italy reached EUR 223 billion (+8.6% compared to a year ago). Merit also goes to the boost coming from the good performance of tourism: physical shops in Italy collected card payments amounting to EUR 181 billion, with an important contribution (10%, or over EUR 18 billion) from travellers (both business and tourist) arriving from abroad. And expectations for the end of the year are more than positive: an estimated value of between EUR 465 billion and EUR 475 billion (with a growth of between +7% and +9%) is expected for the end of the year. These are some of the findings of the latest Innovative Payments Observatory of the Politecnico di Milano.

Growing exponentially during Covid today almost 9 out of 10 in-store payments are 'contactless' so that the value of contactless payments (both through cards and NFC wallets) has exceeded EUR 130 billion (+23%). Payments from smartphones or wearable devices in shops are growing both in terms of value transacted (+58%, totalling 19.9 billion ) and number of transactions (over 760 million in 6 months, +68% compared to 12 months ago).

While the growth in the value transacted (+8.6%) slowed down compared to the same period in 2023 (when year-on-year growth was +13%), the sustained increase in the number of transactions continued, reaching 5.2 billion (+15.6%). Thus, the amount of the average receipt fell, to EUR 42.80 (compared to the previous EUR 45.50), a sign of an increasingly frequent use of card payments even for purchases of smaller amounts, a trend driven mainly by debit cards.

While the costs for private individuals are regulated by the current accounts to which the cards or wallets are linked and have not decreased in recent years, the issue of the costs of accepting electronic payments remains a crucial issue for merchants as well. For many merchants, the fees charged on transactions received are still high. In order to promote change in this area, the 'Memorandum of Understanding for the Mitigation, Greater Understandability and Comparability of the Costs of Accepting Electronic Payment Instruments' was signed by representatives of merchants and payment service providers, an instrument that defined rules and standards for comparing offers on different merchant profiles (and based on promotional offers valid until 2024). "It emerged that the cost of commissions impacting on the annual transaction varies from less than 0.9% for a shop with an average receipt of 5 euro, to over 1.20% in the scenario in which there are no in-store microtransactions (percentages that can, however, grow for commercial establishments in tourist areas or with a large flow of travellers)," emphasises Ivano Asaro, director of the Innovative Payments Observatory. To these percentages it is necessary to add the expenses linked to Pos terminals such as monthly fees or installation, which differ depending on the bank and the type of terminal chosen". The analysis also recalls the pricing policies of the acquiring operators: a greater diffusion of electronic payments would impose that cost reduction for merchants and that greater transparency that is still missing.

To the benefit of merchants, Mobile Pos and Smart Pos have come onto the market in recent years, solutions that offer greater flexibility or advanced functionality. Now the market is looking at Software Pos Cloud-based solutions that can turn any Android and iOS device into a contactless payment terminal. By the end of 2023, there was talk of 38,000 enabled 'terminals', out of a total of 3.2 million Pos. The other pressing issue is that of the greater security that IT infrastructures must have in view of the greater diffusion of instant payments (account-to-account payments) and peer-to-peer.