The rise of cashless payments in Italy: What’s driving the shift and what it means for SMEs
Traditionally a country deeply tied to cash, Italy is now seeing remarkable growth in digital payment solutions—even in physical retail environments. This shift means that cash is increasingly being replaced by methods such as debit and credit cards, contactless payments, and digital wallets.
According to data from the Innovative Payments Observatory at Politecnico di Milano, 2024 marked a historic milestone: for the first time, digital payments overtook cash transactions, reaching a total value of €481 billion. This accounts for 43% of all consumer payments, compared to 41% for cash. One of the most striking findings in the research is the continued growth of contactless solutions, which reached €291 billion in 2024, up 19% from 2023. Today, nearly nine out of every ten card payments made in-store are contactless, according to the Observatory.
What’s driving this shift? In the next sections, we’ll explore the key economic, social, and technological factors contributing to the rise of cashless in Italy. And while this shift brings clear benefits to both the economic scene and small and medium-sized enterprises (SMEs), it also introduces new challenges that businesses must be prepared for.
The good news is that Italian SMEs don’t have to face this transformation alone. With the right support and technology, businesses can confidently embrace the move toward cashless and stay competitive in a rapidly evolving market. Let’s take a closer look.
What’s driving the growth of cashless payments in Italy?
Several key factors have contributed—and continue to contribute—to the widespread adoption of digital payments in Italy:
1. The global digital acceleration
The global push toward digitalization—intensified during the lockdown years—has triggered a major shift in consumer habits across Italy. Contactless and digital payments, once considered optional or unfamiliar, are now widely embraced. According to the Visa Annual Observatory, developed with Ipsos, the percentage of Italians who regularly use digital tools for transactions rose from 17% in 2021 to 44% in 2023. This reflects a clear transformation in spending habits: digital payments have become an integral part of everyday life rather than a mere convenience.
The same research reveals that 33% of users would abandon a purchase if digital payment options weren't available—highlighting just how essential these methods have become. Additionally, around half of digital payment users rely on smartphones or smartwatches, reflecting not only growing digital confidence, but also a strong interest in financial management tools such as expense tracking and savings features.
This behavioral shift—driven by a preference for speed, convenience, and perceived security—continues to fuel the adoption of cashless solutions.
2. Regulation and cost reduction
Cash has long been preferred in part due to its anonymity and perceived lower cost—particularly in relation to certain credit cards. However, the introduction of PSD2 and the EU Interchange Fee Regulation —both aimed at enhancing consumer protection and creating a more competitive payments market—have significantly reduced hidden costs. These frameworks not only make card payments cheaper for merchants but also strengthen consumer rights, offering faster refunds and lower fraud liability. Italy has taken additional steps by banning extra fees for electronic payments and introducing fines for non-compliant businesses.
At the same time, the real cost of handling cash—often understimated—has continued to rise.
This includes:
Banking fees for cash deposits and withdrawals
Security expenses for storing, transporting, and protecting physical currency
Time and labor costs associated with managing and reconciling cash
Risks related to counterfeit money, theft, and human error: Accepting cash exposes businesses to the possibility of receiving counterfeit banknotes, which can result in direct financial loss—especially for small merchants with limited fraud detection tools. Additionally, cash-heavy operations are more vulnerable to internal and external theft, and manual cash handling increases the risk of counting mistakes, reporting discrepancies, and administrative inefficiencies. These risks contribute to higher operational burdens and highlight the growing appeal of secure, traceable digital payments.
As a result, cash is becoming an increasingly inefficient and less attractive option for merchants.
3. Law obligations
Over the years, various government initiatives, such as the cashback program and the lotteria degli scontrini, have helped raise awareness of digital payments, though with mixed results.
More impactful, however, was the mandatory POS requirement introduced in 2022, which highlights the government's determination to promote traceable transactions. Under this regulation, all merchants are required to accept electronic payments, with penalties of €30 plus 4% of the transaction amount for non-compliance.
Looking ahead, 2026 will bring another major change: all POS systems will be required to connect directly to the cash register and transmit sales data in real time to the Italian Revenue Agency. This aims to detect discrepancies more effectively and further reduce tax evasion.
4. Technological Innovation
Advances in technology have made digital payments more accessible and appealing—especially for small and medium-sized businesses. Modern POS systems now offer user-friendly interfaces and advanced features. At the same time, QR code payments and the rapid evolution of ecommerce platforms have helped break down technical barriers, making it easier than ever for businesses to offer a cashless experience.
5. Tourism and international visitors
Tourism remains a vital part of Italy's economy—and a powerful driver of cashless payment adoption. With millions of international visitors arriving each year, many expect seamless, digital-friendly payment experiences similar to those in their home countries.
In particular, the increasing presence of Asian tourists—especially from China, South Korea, and Japan—has accelerated demand for payment options like Alipay+, a comprehensive ecosystem that allows customers to pay in Europe using their preferred local payment methods.
Supporting these systems not only enhances the tourist experience but also opens up new revenue opportunities for local merchants.
By aligning with global payment expectations, Italian businesses—especially in the hospitality, food, and retail sectors—are incentivized to modernize their payment infrastructure.
Opportunities and benefits for SMEs
Digital payments unlock powerful advantages for SMEs - from faster cash flow and lower transaction costs to deeper customer insights and broader market access. While the shift requires some initial effort, the long-term benefits far outweigh the challenges, making it a smart and future-ready move for growing businesses.
Let’s explore the most relevant ones:
Increased security
Handling large amounts of cash comes with significant risks—theft, loss, and human error among them. Digital payments drastically reduce these concerns, helping to create a safer environment for both employees and customers.
Simplified financial management
Digital transactions are automatically recorded, making accounting and cash flow management faster and more accurate. With the right payment partner, SMEs can also access powerful tools to streamline operations.
For example, MultiSafepay offers a real-time dashboard that allows merchants to monitor sales, expenses, and business performance—providing valuable insights that support strategic decision-making.
Greater operational efficiency
By automating the payment process, businesses save time on manual tasks such as cash handling, reconciliation, and daily reporting. This frees up internal resources to focus on higher-value activities like customer service or business development.
Stronger brand image
Adopting digital payment solutions reflects a company’s commitment to innovation and security. In many industries where digitization is still limited, this can serve as a competitive differentiator and attract more digitally savvy customers.
Faster transactions
Digital payments—especially contactless or mobile solutions—significantly make checkout faster, improving customer flow and increasing store efficiency. The result: a smoother shopping experience and higher customer satisfaction.
Enhanced customer convenience
Today’s consumers expect to pay with their preferred methods. Offering a broad mix of options enhances the customer experience, reduces cart abandonment, and builds loyalty.
Opportunities for international expansion
Digital payment solutions make it easier for SMEs to serve foreign and international customers, both online and in-store. Accepting international cards, multiple currencies, or global payment methods (such as Apple Pay, Google Pay, Alipay+) opens up access to new customer segments and markets abroad.
Overcoming the challenges of going cashless: How SMEs can thrive with the right support
While the shift to digital payments offers clear advantages, it also brings a number of real challenges—particularly for small and medium-sized enterprises (SMEs) navigating this transition with limited resources.
Key pain points for Italian SMEs include:
Adapting to digital transformation and evolving customer expectations – The shift to cashless payments is not only a technical transition but also a cultural change for small business owners. They must navigate new customer expectations, regulatory requirements, and emerging technology standards, all while managing day-to-day operations. For many SMEs, this transformation can feel overwhelming, particularly without clear guidance or support. At the same time, digital-savvy customers increasingly demand fast, seamless, and flexible experiences. Whether it's mobile payments, loyalty programs, or integrated receipts, customers expect businesses to offer more than just a basic transaction. Meeting these expectations requires not only the right technology but also a mindset shift toward customer-centric service, where the focus is on delivering personalized, efficient experiences at every touchpoint.
Regulatory complexity and compliance burden - Keeping up with ever-changing digital payment regulations (e.g. fiscal data transmission, privacy laws, anti-money laundering rules) can be difficult for small businesses without dedicated legal or administrative support.
Payment system complexity – With so many POS options available, choosing the right solution can be confusing. SMEs must consider functionality (e.g. manual entry modes), compatibility with multiple payment methods (including foreign currencies and platforms like Alipay+), and even form factors—whether they need countertop terminals, portable devices, or smartphone-integrated solutions.
Infrastructure gaps – Reliable high-speed internet and modern technology are still not guaranteed in many rural or remote areas, making it harder for microenterprises to adopt advanced digital tools like cloud-based POS systems or omnichannel solutions.
Increased exposure to fraud – Growing digital transaction volumes heighten the risk of phishing, skimming, and unauthorized data access. For SMEs without strong cybersecurity measures, these threats can be both technically and financially challenging.
High upfront costs – Embracing digital payments often involves investing in hardware, system integration, and maintenance. This can be a major barrier for businesses with limited margins or cash flow constraints.
Staff training needs – Employees must be equipped to use new payment tools, manage digital transactions, and troubleshoot in real time—all of which may require ongoing training or additional hiring.
That said, you don’t need to face all of these challenges alone. Partnering with a reliable payment service provider can ease the pressure by offering targeted, scalable solutions tailored to SMEs’ unique needs.
At MultiSafepay, we support businesses by providing:
Proactive fraud monitoring and prevention – Our advanced systems detect and flag suspicious activity in real time, helping to safeguard both business operations and customer data. This proactive approach builds trust and minimizes financial risk.
An integrated Omnichannel infrastructure – A single platform that manages both online and in-store payments allows businesses to deliver a consistent and seamless shopping experience, no matter which channel the customer uses. This unified approach also simplifies internal operations.
Smart, multifunctional POS systems – Modern terminals not only ensure secure, fast transactions, but also support daily operations such as inventory management, reporting, and reconciliation. This kind of functionality is increasingly important as new regulatory requirements come into effect. Importantly, our SmartPOS devices are designed to be cost-effective, helping reduce one of the major barriers to adoption for small businesses concerned about upfront investment.
Customized payment method mix – We help businesses select the most effective payment options for their customer base, whether local or international, boosting conversion rates and creating a frictionless checkout experience.
Scalable, modular transformation – Our flexible architecture allows SMEs to digitize at their own pace. Businesses can start with a basic setup and expand their capabilities as their needs grow, ensuring a cost-effective, low-risk transition to digital.
In short, a trusted PSP doesn’t just offer tools—it offers a roadmap.
With the right partner, the journey toward digitization becomes more accessible, secure, and sustainable.
Toward a sustainable digital transition
In an increasingly digital European market, staying up to date with the latest payment trends is essential for the competitiveness of Italian SMEs. By choosing a reliable payment partner, businesses can design a payment system tailored to their needs—helping them navigate the digital shift with clarity and confidence.
As mentioned in the previous section, the transition doesn't have to be complex. Even a single POS terminal can deliver immediate value, improving operational efficiency, security, and customer satisfaction.
MultiSafepay supports SMEs every step of the way toward a cashless future. With the right tools and guidance, digital transformation becomes not only achievable, but truly beneficial.
Contact us today to discover how a sustainable approach to payments can support your business growth.
