Digital payments: Italy is moving forward. They are worth 40% of consumption at 444 billion

MILAN – Even in Italy, albeit more slowly than in much of the rest of Europe digital payments are growing year after year, albeit at a slower pace than in the past. In 2023 they increased by 12% compared to the previous year, with a total transaction of 444 billion euros.

The new one detects it Innovative Payments Observatory of the Polytechnic of Milanwhich shows that today almost 8 out of ten in-store digital payments – for a total value of 240 billion euros – are made in “tap & go” mode with contactless physical cards or with devices equipped with NFC technology. More than two in ten Italians use smartphones to pay in physical places and wearable devices are used to make approximately one in seven electronic payments in stores, for a total of 29 billion euros (+78% compared to 2022).

Of total consumption, digital payments account for 40% of the value, an incidence slightly lower than that of cash. “Digital payments in Italy are increasingly contactless: in 2023 – he comments Valeria Portale, director of the Innovative Payments Observatory -. The data confirms the impression that in our country there is a strong increase in awareness and knowledge towards digital payment instruments”.

Buy now, pay later

For expenses made online, more and more Italians are choosing to defer their expenses into different installments. The Buy Now Pay Later reached 4.6 billion euros in 2023, reaching 6.5% penetration of the total national e-commerce market. Furthermore, 14% of Italians said they had already used it, mainly for online purchases, and only 2% of these would not use it again.

“Buy now, pay later” systems fall between digital payment methods and actual loans. Without going into the details of each system, how “Buy Now, Pay Later” works seems pretty straightforward. When purchasing a service or product online, the customer can decide whether to pay all at once or divide the amount into three or more installments. The first installment is paid at the time of purchase, the subsequent installments are paid monthly within 90 or 120 days. This offers a clear advantage for the buyer, without interest or extra costs paid by the merchant. However, there is the risk of high fees if payments are late, leading to the risk of accumulating debts that are difficult to manage.

According to the Bank of Italy, most of these loans are free of charge for consumers if the installments are paid on time. However, in the event of late or non-payment, the fees can become extremely costly. Some platforms may charge fees of up to 25% of the order total in case of delays. A critical aspect highlighted is that these services are presented as harmless extensions, but in reality they involve a credit risk that is not adequately informed to the consumer. Another risk is the possible over-indebtedness of shoppers, especially when it comes to purchases of non-essential goods.

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The future

In the coming years, an increase in alternative payment methods to cards, the so-called Alternative payment methods. Their diffusion, however, varies geographically. In China, for example, “superApps” – think of Alipay – dominate the sector, while in Europe the offer of alternative payments is still fragmented between individual countries.

New technologies are bringing innovations to digital payments, with artificial intelligence exploring new opportunities such as chatbots and payment process automation. Open APIs, Internet of Things, cryptocurrencies and blockchain – also thanks to the definitive approval of the Markets in Crypto-Asset regulation (MiCAr) – are also influencing the sector.

In Italy, POS software solutions and innovative devices are emerging: “As part of the initiatives that redesign the in-store checkout experience, in November 2023 the first store equipped with artificial intelligence in our country opened in Verona which allows customers to take products freely without having to scan each item and to pay automatically by scanning a QR Code – he concludes Ivano Asaro, director of the Observatory -. Italy is no exception with respect to the solutions launched in the Innovative Payments field: Wearable Payments, already widely used with smartwatches, are enriched with latest generation rings; In-Car Payments see the arrival of solutions for the payment of dashboard refills, which join other parking-related applications already present on the multimedia platforms that can be used from the car dashboard”.