Italian consumers are twice as likely to use a mobile wallet online compared to in-store.
On a global scale, Italy emerged fourth in mobile wallet adoption, behind Japan (25.7%), Germany (22.2%) and Singapore (21.3%), according to the PYMNTS Connected Economy report, “How The World Does Digital: Different Paths To Digital Transformation,”
Locally, about a fifth (20.4%) of Italian consumers surveyed reported paying for their last in-store purchase using a mobile wallet. And while that number is an increase from the 18% rate recorded in Q2 2022, in-store wallet use still lags behind online use.
In comparison, 42.2% of Italians reported using a mobile wallet to pay for their last online purchase, the second highest after Germany, where 44.2% of respondents used one for their last eCommerce transaction.
And although Italy isn’t the only country where mobile wallet usage is far more popular for online purchases than in-store ones, the difference is more striking than elsewhere. For example, PYMNTS found that on average, 17.6% of consumers across the 11 countries surveyed used a mobile wallet for their last in-store purchase, versus 30.7% online in Q3 last year.
The Government’s Pro-Cash Agenda
The discrepancy between online and offline payment preferences can be partly explained by the use of cash for in-store transactions.
As in other European countries, cash payments are still popular for small-value purchases in Italy, even though the role of cash and the extent to which the law supports the Italian cash system has become a tense political issue under the current government.
Giorgia Meloni, the country’s prime minister and the leader of the far-right Brothers of Italy party, has in the past been critical of policies intended to curb the use of cash.
In the recent saga of Meloni’s attempts to reign in such policies, the Brothers of Italy proposed two changes to Italian cash policy in the 2023 budget.
The first proposal would have scrapped fines for merchants that refuse card payments for transactions under 60 euros. However, following backlash from the Italian central bank and reservations expressed by the European Commission, the government backtracked on its plan and removed the proposal from the budget.
In the second change to Italian cash law, the value cap on cash transactions is set to increase from 100 euros to 5,000 euros.
What Next for Italy’s Digital Wallets
If Italy is going to improve its Connected Economy Index, which is a measure of how frequently people engage in transactional digital activities such as shopping online or paying with a digital wallet, it will need to close the gap between wallet usage online and at the point of sale in 2023.
But while the government may be less supportive of digital payment initiatives than its EU peers, that doesn’t mean the growth of mobile wallet payments has stalled.
Overall, Italy’s transactional Connected Economy Index score has improved, from 19.2 in Q1 to 19.8 in Q3 of 2022, recovering from a slight decline in the second quarter. It’s the same story for wallet usage at the point of sale, where Italy ultimately ended the year with a higher adoption rate than when it started.
One trend that could help accelerate the use of mobile payments in Italy is a rising tendency for more interoperability between European mobile wallets, helping to bring the same kind of convenience eurozone consumers get with cash to mobile payments.
For example, in 2022, two of Italy’s preeminent mobile payment app operators indicated their ambitions to enable a more seamless pan-European payment experience for users.
In September, one such operator, Satispay, raised 320 million euros to help fund its expansion, stating at the time that the capital would fuel its growth into becoming “Europe’s super network.”
Matching Satispay’s appetite for cross-border functionality, another Italian mobile wallet Bancomat Pay joined the European Mobile Payment Systems Association (EMPSA) in 2020 to help further the integration of mobile payment systems across Europe.
That move seems to have yielded its first fruit in August last year, when EMPSA announced that it had successfully tested interoperability between Bancomat Pay and its peers in Switzerland, Germany and Austria.
The goal of the project is for Bancomat Pay users to be able to make payments at merchants who accept TWINT and Bluecode, equivalent payment systems found in Switzerland (TWINT), Germany and Austria (Bluecode).
As TWINT’s CEO, Markus Kilb, told PYMNTS in a recent interview, efforts to promote interoperability have important consequences for cross-border trade. “It’s very common for people living in Switzerland to go to Milan for the weekend to [shop and] I would love to have my clients go there and pay with TWINT,” Kilb said.
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