"Cards Are Private Money"... Italy Announces Policy to Expand Cash Payments

Far-right Prime Minister Giorgia Meloni includes provision in first budget allowing card payment refusal up to about 82,000 won
The Times: "Could gain favor with small business owners"

Italy is promoting a policy that supports the use of cash instead of credit cards. This has been analyzed as going against the global trend of increasing electronic payment usage.
[Image source=Yonhap News]

[Asia Economy Reporter Oh Gyumin] Italy is pushing a policy that supports the use of cash instead of credit cards. This move is analyzed as being contrary to the global trend of increasing electronic payment usage.

On the 28th (local time), according to the UK’s The Times, Prime Minister Giorgia Meloni included in her first budget a regulation allowing consumers and merchants to refuse card payments and demand cash payments for transactions up to 60 euros (approximately 82,710 KRW), instead of the previous limit of 30 euros. The threshold for recognizing cash payments will also be raised from the existing 1,000 euros to 5,000 euros.

Prime Minister Meloni argued the validity of the policy in parliament, stating, "The legal tender of Italy and Europe is the banknotes issued by the European Central Bank (ECB)," and "Electronic money is not legal tender but a form of private money."

The term "private money" used by Meloni is a concept supported even by the ECB. The Times added that the ECB has expressed concerns that the increase in card payments could lead the European economy to be dominated by American credit card companies such as Amex, Visa, and Mastercard.

The Times predicted that Meloni’s attempt could "score points" with small and medium-sized merchants burdened by card payment fees.

Meloni has previously expressed a negative stance on electronic payments. Before taking office in April, she said, "(Forcing electronic payments) is an illegal gift to the financial companies and banks providing the service." She also rebutted concerns that cash payments could be used for tax evasion by citing examples from Germany and Austria.

Experts’ speculations about the background of this policy are divided. One Italian financial expert analyzed that it might be due to pressure from retailers trying to evade taxes through cash payments. A political consultant said, "The government is listening to the voices of significant groups such as taxi drivers," and described the policy as a good system for tax evasion.