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EXPLAINED: Why people in Italy might have to carry more cash from now on

Italian retailers will no longer face fines for refusing card payments on amounts lower than €60, after the government put the brakes on a recent push towards electronic payments.

EXPLAINED: Why people in Italy might have to carry more cash from now on
Italian retailers will no longer be forced to accept card payments for smaller amounts under a new budget law. Photo by ANDREAS SOLARO / AFP

Italy’s new budget bill is set to add yet another controversial chapter to the country’s long and troubled history of card payment laws.

Under Italy’s new budget law, retailers will no longer be fined for refusing card payments for smaller amounts – a controversial move that is expected to have a knock-on effect for shoppers.

READ ALSO: Key points: What Italy’s new budget law means for you 

Fines for retailers refusing card payments on amounts lower than €60 will now be suspended until at least June 2023, according to a clause included in the text of the 2023 budget law published to media on Wednesday.

As set out by the bill, the six-month suspension will allow the newly created Ministry of Enterprises and Made in Italy to “establish new exemption criteria” and “guarantee the proportionality of the given penalties”.

And, though it isn’t yet clear what new exemptions the government is currently considering nor what exactly is meant by “proportionality”, what’s certain is that residents who had started to make more purchases by card will now have to repopulate their pockets with some good old banknotes because businesses – from taxi drivers to cafes and bars – might not accept card payments for small amounts.

Fines for businesses caught refusing card payments had been introduced by Draghi’s administration back in June 2022, with retailers liable to pay “a €30 administrative fee plus four percent of the value of the transaction previously denied”, regardless of the amount owed by the customer. 

Euro banknotes in a wallet

Under Italy’s new budget law, retailers will no longer be forced to accept card payments for transactions under €60. Photo by Ina FASSBENDER / AFP

The measure angered retailers who lamented having to pay hefty bank commissions on every electronic transaction – some business owners even went as far as openly defying the law and organised themselves into a protest group (Comitato No Pos, roughly meaning ‘Anti-point-of-sale committee’). 

Given the government’s new legislation, it seems like their efforts might just have paid off. 

But, while many business owners will no doubt be happy with the suspension, others have already raised doubts about the potential ripple effects of the government’s move.

Aside from shoppers having to carry more cash than they’re currently used to, many political commentators are warning that the suspension might be a “gift to tax dodgers” in a country where, according to the latest available estimates, tax evasion costs state coffers nearly €90 billion a year.

The same was said about another of the government’s recent changes: raising the cash payment limit from 2,000 to 5,000 euros.

READ ALSO: What’s changing under Italy’s post-pandemic recovery plan? 

A previous government led by Giuseppe Conte had introduced several measures aimed at encouraging the use of electronic payments, most of which have since ended or been rolled back.

The introduction of fines for businesses refusing card payments was one of the financial objectives set out within Italy’s Recovery Plan (PNRR), which expressly refers to the fight against tax evasion as one of the country’s most urgent priorities. 

It is therefore likely that the new cabinet will at some point have to explain the latest U-turn on Recovery Plan policies in front of the EU Commission.

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UK AND ITALY

Can British people in Italy claim the UK’s winter fuel payment?

In the UK, there are various benefits available to help eligible people through the cold winter months – one of which is the winter fuel payment. But can Britons living in Italy really claim this benefit to cover the cost of heating their Italian homes?

Can British people in Italy claim the UK’s winter fuel payment?

Average winter temperatures vary across Italy, but those who move here after only experiencing scorching summers are often surprised to discover just how cold the country can get.

Even the hardiest of arrivals from colder climes will no doubt have to switch on the radiators or fire up the woodburner between November and February – despite the surging costs.

READ ALSO: Not just gas: How the cost of heating has soared in Italy

As the cost of living crisis bites, some UK nationals who reside in Italy may wonder if they could still be eligible for winter fuel financial support from the UK.

What is the UK’s winter fuel payment?

The UK’s winter fuel payment is a tax-free payment to help older people with heating costs during the cold winter months.

Those eligible must have been born before September 26th 1956, according to the UK government’s website.

How much people receive depends on their age and whether anyone else in the household is also eligible, but the amount is usually between £250 and £600.

I’m a UK national living in Italy. Can I claim the winter fuel payment?

Yes, if you meet the following criteria according to the British government’s website:

“If you do not live in the UK, you’re only eligible for the Winter Fuel Payment if:

  • you moved to an eligible country before 1 January 2021
  • you were born before 26 September 1956
  • you have a genuine and sufficient link to the UK – this can include having lived or worked in the UK, and having family in the UK”

Unlike Spain and France, which the British government has deemed to be too warm on average, Italy is on the list of eligible countries along with Austria, Germany, Sweden, and others.

Find out how to claim the fuel payment on the UK government’s website here.

According to the UK government, during winter the average temperature is between 2 and 7 degrees Celsius in the UK.

READ ALSO: At what time of day is electricity cheapest in Italy?

The Italian government divides the country into six ‘climate zones’ which determine when and for how long residents should have their heating switched on each winter.

According to the government’s classification, the coldest parts of the country are the northern provinces of Cuneo, Trento, and Belluno, where no heating restrictions apply.

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