Tuesday, January 4, 2011
The Italian Banking Association has declared “war on cash” in a country where credit-card usage is less than half the European Union average, according to the Bank of Italy. The association, known by its Italian acronym ABI, says it costs banks and companies as much as 10 billion euros ($13.3 billion) a year to process cash payments, mainly in increased security and labor. Rome-based ABI aims to cut those expenses by promoting electronic payments with credit and debit cards and wire transfers in both the public and private sectors.
“Italy urgently needs these changes to catch up with other countries like France, which has allowed non-cash payments for public services for more than two decades,” said Rita Camporeale, head of payment systems and services at ABI.
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Italy’s culture of cash is deeply rooted. Italians are the euro region’s least-indebted consumers and among its biggest savers, according to 2009 Eurostat data. Companies often pay salaries in banknotes to evade taxes, particularly in the country’s southern region, where organized crime is prevalent.
Italy loses about 100 billion euros of revenue a year from untaxed transactions in the so-called underground economy, which amounts to about 22 percent of gross domestic product, according to government statistics. The Finance Ministry agrees with ABI proposals to make public offices accept electronic payments and install point-of-sale terminals, Camporeale said in a Dec. 21 interview. Banks also want a ban on cash salaries, she said.
Full story here.