The government stepped on the accelerator to get the “Cashless Italy Plan” off the ground with the aim of discouraging the use of cash and to encourage electronic payments.
Cash at risk of money laundering
Italy is at the top of the ranking among the European nations with the greatest use of cash: payments digital they stop at 14% of total transactions and the ratio between cash and GDP is around 10%, among the highest in Europe. A paper from the Bank of Italy photographed the map of the excessive use of money and the related risk of recycling, with the southern regions being among those that use electronic card payments the least. Additionally, digital transactions also involve payment traceability which counteracts tax evasion.
To combat tax evasion, a new “SuperCash-Back” incentive was announced in recent days, yet another attempt to encourage the use of payments cashless, therefore without cash: meetings with operators were intensified to make payments with small-value cards free and to reset commissions even for digital transactions under 25 euros.
In addition to encouraging the convenience for businesses and consumers to use electronic money with latest generation cards, apps and mobile wallets, it is necessary to promote greater transparency on costs and commissions related to the use of electronic money, with an impact on merchants and consumers that should be practically nil.
The risks associated with electronic payments
But the war on cash will have to take other factors into account risk which is met by relying on technology: from the inefficiencies of the rain issue that characterizes the cards (especially the prepaid ones) that are not even activated, to the risk of crashes on international circuits that risk blocking payments all over the world.
In Sweden, where even church offerings can be paid by credit card or smartphone, the Central Bank has raised the alarm because in the event of a natural or technological catastrophe, having entire regions completely devoid of money in paper or metal form can represent a trouble serious, because it would make payments impossible even for purchases essential to survival.
Finally, as we read on IlSole24ore, there is the chapter of costs: on this front there is the risk that the discounts and tax reliefs granted to merchants will be discharged to cardholders in the near future. Individual users and the authorities in charge must always be vigilant.
Paying with cards costs more. Although it is illicit apply an additional cost to the customer because he pays by credit card, just take a tour of the tobacconists to see that in 90% of cases it is not possible to pay for a pack of cigarettes by credit card or debit card and in some cases a surcharge. But that’s not all: for the payment of the car tax at the Aci, a commission is added to those who use a card despite the fact that the Antitrust has fined millions of euros. Too bad, however, that the Council of State accepted the ACI appeal because it is not considered a commission but a surcharge for an additional opportunity offered to motorists.
The crash risk. As mentioned earlier in the case of Sweden, it takes a few hours of blocking a single credit card company to cause strong inconvenience all over the world: just remember Visa’s Black Friday, which on June 1st 2018, due to technical problems, it had to to interrupt the service for several hours, not allowing you to use the card in many European countries.
The scandal is more recent Wirecard, a German company that offers electronic payment solutions to over 300,000 companies around the world, which had led the British supervisory authority to suspend the banking services managed by Wirecard with consequent problems around the globe. In Italy, Sisalpay customers were refused electronic card payments and cash withdrawals blocked for a few days.
In short, yes to technology as well as the fight against tax evasion but with the appropriate precautions: cash, at least in the near future, will always be indispensable.
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