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Italy backs levy on payments firms, banks if they do not cut fees for retailers

Published 21/12/2022, 08:57
Updated 21/12/2022, 12:25
© Reuters.

© Reuters.

By Giuseppe Fonte and Valentina Za

ROME (Reuters) -Italy's parliament has approved a measure in the 2023 budget that will impose a levy on payments firms and banks if they fail to agree lower fees on electronic transactions with shopkeepers, lawmakers said.

The cost of digital payments has taken centre stage in Italy, with the right-wing government of Giorgia Meloni trying to deal with complaints by retailers about the fees.

Italy's previous government had in June introduced fines for shops that refused card payments.

The latest move comes after Meloni's government backtracked on a provision that would have eliminated sanctions for small purchases, following criticism by the European Commission.

Based on the budget amendment, Rome will work to broker a deal between banks, payment companies and retailers to reduce fees on electronic transactions worth up to 30 euros ($32) for businesses with annual revenues of up to 400,000 euros.

Italy will impose a "solidarity contribution" equivalent to 50% of the net proceeds from those transactions if the parties fail to reach an agreement by March 31 on a "fair and transparent level of fees", a document seen by Reuters said.

Equita analyst Gianmarco Bonacina said the measure would potentially hit Italian payments company Nexi (BIT:NEXII), which reaps 55% of revenues domestically, but would also affect banks that receive a portion of the fees paid by merchants.

Payments firms usually do not charge fees for transactions of less than 10 euros, based on their websites.

Under measures adopted to unlock EU post-pandemic recovery funds, Italy introduced in mid-2022 fines of 30 euros plus 4% of the value of the transaction for shops refusing card payments.

Supporters of cash payments argue they save shopkeepers banking fees, while critics including Italy's central bank say that reducing regulatory curbs on cash would fuel the black economy.

The Bank of Italy has also said that cash has hidden costs linked to transportation and safety which pushes its cost for businesses above that of cards.

Around 100 billion euros in taxes and social contributions are evaded every year in Italy.

The Chamber of Deputies budget committee passed the budget bill early on Wednesday.

The government plans to call a confidence vote on the budget in the whole Chamber of Deputies on Thursday to speed up its approval, lawmakers said.

Barring surprises, the upper house Senate should give the bill the final approval in a second reading next week.

($1 = 0.9411 euros)

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