In a world of e-payments, Italians defiantly cling to cash | 24CA News

Buskers on the cobblestones of Naples belt out a postwar Neapolitan basic, Tu vuo’ fa’ l’americo, a teasing tune a few native who needs to appear like a stylish American, consuming “whisky and soda” and dancing “rock and roll.” 

Almost 70 years later, the tune nonetheless captures a sure cultural resistance to modernity on this nation, expressed most lately in Italians’ sluggish transition to digital fee from money.

In different main economies, dropping cash into the hats of avenue performers can be certainly one of only a handful of cash-only conditions — however not in Italy.

The nation ranks close to the underside in Europe in digital fee adoption, and is among the many 30 most “cash dependent” main economies on this planet, within the Cash Intensity Index (ICC).

Despite lagging behind the remainder of Europe within the transfer away from money, Italy is poised to repeal necessities for retailers to take credit score or financial institution card fee.

In its 2023 draft funds, the federal government of far-right Prime Minister Giorgia Meloni has included a measure to allow shops, taxis and different companies to refuse digital fee for purchases below 60 euros (about $85 Cdn).

The measure may also carry the authorized ceiling for money funds from 1,000 to five,000 euros ($7,000).

According to the opposition and economists, the transfer will gasoline the black economic system in a rustic the place annual tax evasion quantities to about 100 billion euros ($145 billion), in line with Italian Treasury knowledge.

Yet many small business house owners welcome the brand new measure, and demand it isn’t about evading taxes.

“Of course I accept cards, especially because it’s what tourists want to pay with,” mentioned Alfredo Russo, who runs a fried meals and pizza store within the historic centre of Naples, a metropolis famend for its underground economic system. 

“But the requirement in place now, where we can’t say no to cards for smaller amounts, is excessive.”

‘A battle in opposition to the poor’

The present legislation, handed by former prime minister and ex-president of the European Central Bank Mario Draghi, fines companies that refuse to supply digital fee for lower than 30 euros ($40), together with 4 per cent of the transaction quantity.

Like many retailers, Russo resents the fee of 1.95 per cent he pays to the financial institution on digital funds.

“Targeting small businesses for not taking cards for small amounts is a war against the poor,” he mentioned. “The government should focus on going after the big evaders.”

As he complains, a buyer palms Russo a euro coin for a bottle of water, and chimes in, saying even when small companies do conceal a few of their money consumption, it is a method to compensate for over-taxation. 

“It’s not like people are getting rich this way,” the lady mentioned. “They’re just scraping by.”

In a close-by retailer that sells Nativity scene collectible figurines, two middle-aged American vacationers enter and ask the proprietor if he takes playing cards.

“No,” he mentioned.

After the shoppers go away, the proprietor, who requested CBC to not reveal his identify, mentioned, “If we’re talking about a bigger purchase — say, over 30 euros — then fine. But for small purchases, it’s not worth the hassle. I don’t have a phone line, which would be an extra cost, and cell reception is bad here, so I have to go out into the street to process the payment.”

Tracing purchases

Azzurra Rinaldi, an economist at Rome’s Sapienza University, commiserates with small companies dealing with insufficient infrastructure and making an attempt to maintain afloat in an economic system that has lurched from disaster to disaster over the previous quarter-century.

“But we have a major problem in this country with the traceability of purchases,” Rinaldi mentioned. “I know this is an effort, but each of us has to do their own part. The whole world is going one way [with electronic payments] and we are going the other way.”

According to the Bank of Italy, the typical Italian shopper makes use of playing cards half the variety of instances because the EU common. The common quantity Italians cost on their playing cards — 47.50 euros ($68) — is among the many highest in Europe, an indicator that for smaller purchases, they’re nonetheless paying money.

During the election marketing campaign, Meloni railed in opposition to digital fee necessities on TV speak exhibits and Facebook, calling the commissions “an illicit gift to banks” and “a hidden tax” designed to swell financial institution coffers and digitally spy on Italian residents.

Meloni’s deliberate 60-euro waiver, say economists, is focused at her base.

“It’s a gift to certain sectors, like taxi drivers, after the electoral campaign,” mentioned economist Tito Boeri, a professor at Bocconi University in Milan. “They prefer not to accept cards so they can be paid in cash that they don’t declare.”

Indeed, stories of taxi drivers refusing card funds have risen, with one broadly reported incident of a driver telling an ex-Olympic athlete as he dropped her off on the Genoa airport that “the party is over” for digital funds in Italy.

Pressure from Europe to modernize

Still, exterior Italy, Meloni is dealing with appreciable strain to backtrack on her proposed measure. 

Italy is about to obtain its third instalment of 200 billion euros ($285 billion) from the EU for its post-COVID National Recovery and Resilience Plan. But it comes with strings connected, aimed to push Italy to modernize: cracking down on tax evasion and updating its digital infrastructure, among the many worst in Europe.

Brussels has but to subject an official assertion, however with mounting concern over the tax evasion implications, Meloni mentioned she can be prepared to decrease the digital fee waiver from below 60 to below 40 euros.

Naples fruit vendor Pasquale Marta, who stacks shiny blood oranges exterior his store, which has been in his household for a century, says Meloni’s introduced decree will not change a lot for him.

“More and more people want to pay with cards, so I’ll take cards,” he mentioned. “I’ll still get by.”

Marta says it is neighbours in Naples who’re unemployed, pressured to push carts promoting the whole lot from sun shades and trinkets to fruit, that he worries about.

“How are they going to survive if they don’t sell in cash, under the table?” he requested. “How are they supposed to eat?”