Digital payments are entering a new phase of evolution. After years of growth driven largely by contactless cards and online purchases, the Italian market is changing faster, thanks to technologies such as open banking, instant payments, artificial intelligence (AI), and emerging forms of digital identity.

The numbers confirm this transformation: in 2025, electronic payments in Italy reached €518 billion, representing 45% of total consumer spending, while cash dropped to 38%.

In addition, interest is growing in initiatives such as the digital euro, which is set to influence the entire European payments ecosystem in the years ahead.

If you run a business, keeping up with these developments will help you understand how customer expectations are changing and why maintaining adaptable payment infrastructure is becoming a growing priority.

Key takeaways

• Digital payments are now firmly embedded in the Italian market. The growth is not just about transaction volume. It is also about the spread of new tools such as mobile wallets, account-to-account (A2A) payments, and open banking–based infrastructure, all of which expand possibilities for both businesses and consumers.
  
• Instant payments, open banking in Italy, and embedded finance services are reshaping the payment experience. In the coming years, businesses will be able to easily integrate financial functions directly into their websites, apps, and digital platforms.
  
• AI is playing a growing role in payment management. It helps detect fraud more effectively while improving authorization rates and reduce declined payments without complicating checkout.
  
• The future of digital payments will depend less on any single payment method and instead on the flexibility of the underlying infrastructure. Businesses that adopt platforms that are straightforward to upgrade will be best positioned to integrate emerging technologies, including the potential arrival of the digital euro.
  

How digital payments are changing in Italy

In recent years, digital payments have moved from an alternative to cash to a stable component of the Italian economy. The rise in online shopping, the spread of contactless terminals, the growing use of smartphones for payments, and recent European regulations have all helped accelerate a transformation that now affects businesses of every size.

For sellers, the change is not just about the technology they use to process payments: customer expectations are shifting too. People increasingly expect a simple, consistent payment experience across channels. These are the main factors to consider:

• The growth of digital payments in physical and online stores
  
• The spread of mobile wallets and contactless payments
  
• The rise of instant and A2A payments
  
• The expansion of open banking in Italy and the rise of embedded finance services
  
• The use of AI to improve payment security and efficiency
  

If you own a business, it is worth keeping a close eye on how payment habits and technologies are evolving. Understanding these trends will help you make more informed decisions about which tools to adopt and where to invest in the future.

From cash to cashless: How consumer habits are changing

Historically, cash remained the preferred way to pay for a significant portion of Italians. Today, however, the picture looks profoundly different.

The shifts from cash to digital payments in 2024 shows that electronic payment options have become a regular part of Italians’ daily habits. Behind this evolution, there is not just one single factor at play, but rather a combination of several different changes:

• Contactless payments are now accepted practically everywhere, including for small amounts.
  
• Smartphones and smartwatches have made payments faster.
  
• Online shopping has increased consumers’ familiarity with digital tools.
  
• Checkout experiences have progressively become simpler and more intuitive.
  

These shifts have concrete implications for businesses. Customers expect to find their preferred way to pay and to complete their purchase in just a few seconds, whether online or in-store.

The difference is especially noticeable when expectations aren’t met. A checkout that requires too many steps or doesn’t support the most common payment methods can increase cart abandonment.

In other words, customers are no longer adapting to the company’s payment system. Instead, they have to adapt to their customers’ preferences.

Mobile wallets and contactless payments continue to grow

Among recent innovations, mobile wallets have likely changed how Italians pay the fastest. While these tools were initially adopted mostly by younger users, today their adoption extends to a much broader segment of the population. Smartphones and smartwatches have progressively replaced the gesture of pulling out a wallet, especially for small-value transactions and everyday purchases.

Their spread is driven by convenience and biometric authentication systems, which make payments simple and secure.

For sellers, supporting the main mobile wallets means offering customers a familiar way to pay, making checkout simpler and faster, and ensuring an experience that aligns with their habits.

Which payment methods are growing in Italy?

The fastest-growing options include mobile wallets, contactless payments through smartphones and wearables, instant payments, and open banking solutions. At the same time, cash accounts for a shrinking share of overall consumer spending.

Instant and A2A payments: The next frontier

Receiving a payment in just a few seconds, rather than waiting one or more business days, makes a tangible difference in managing a company’s cash flow. That is exactly the promise of instant payments, which are fast becoming a major driver of innovation in the sector.

Available 24/7, 365 days a year, instant payments shorten settlement times and make funds available sooner. The new European Union regulation on instant payments is also designed to speed up their rollout, making them widely accessible across the EU.

Beyond cards: A2A payments continue to grow

Alongside instant payments, A2A payments are also gaining wider adoption via open banking application programming interfaces (APIs) to transfer money directly between bank accounts.

For some businesses, these tools can represent an interesting alternative in specific scenarios, such as when the goal is to:

• Receive funds as quickly as possible
  
• Automate certain payment workflows
  
• Integrate payments directly into their own digital services
  

This does not mean that cards will lose their importance; more likely, in the coming years they will continue to coexist alongside new ways to pay, expanding the choices available to businesses and consumers.

Open banking and embedded finance opportunities for businesses

In recent years, open banking in Italy has shifted from a regulatory matter to a driver of innovation for banks, fintechs, and businesses. Thanks to the revised Payment Services Directive (PSD2) and subsequent industry developments, businesses can now securely integrate banking services and payment solutions, making interactions between businesses and customers smoother.

What is open banking and how does it impact payments?

It is a model that allows account holders to authorize the sharing of their banking data with authorized third-party providers through secure APIs. This sharing requires user consent and compliance with European regulations.

In the payments space, this approach is driving the development of additional offerings, such as:

• Direct bank account payments
  
• Faster payer identity checks
  
• Deeper integration between checkout processes and banking services
  

The evolution of open banking in Italy is also paving the way for increasingly personalized financial services, which are set to become a natural component of the digital experience.

Embedded finance: Financial services as part of the buying experience

One of the most interesting developments of open banking is embedded finance, which brings financial services directly into websites, platforms, and apps. For instance, a customer can make a payment, request financing, or save their payment method without ever leaving the buying process. For businesses, this means a smoother journey and the ability to expand available offerings while preserving the overall platform design.

AI and machine learning in fraud prevention and payment optimization

As digital payments grow, fraud complexity increases too. Cyberattacks are becoming increasingly sophisticated, and systems based solely on static rules struggle to accurately distinguish legitimate transactions from fraudulent ones.

The goal is not just to block fraud; an effective system must also limit so-called false positives, i.e., legitimate transactions that are mistakenly declined, with negative consequences for both users and sellers.

How will AI change digital payments?

AI now supports many stages of payment processing. Beyond fighting fraud, it can improve operational performance by analyzing thousands of variables that would be impossible to evaluate manually. For example, AI helps:

• Detect fraud attempts in real time
  
• Improve transaction authorization rates
  
• Adapt security measures in real time to the risk profile
  
• Identify irregularities in purchasing or spending behavior
  

Digital identity, passkeys, and the future of authentication

As digital payments expand, authentication approaches are evolving as well. The aim is twofold: boost security while making the purchase flow easier.

One of the most significant innovations is passkeys. Based on public-key cryptography, they replace traditional passwords with authentication systems already built into devices, such as facial recognition, fingerprint scanning, or a PIN.

For businesses, this evolution can translate into the following concrete benefits:

• Faster access to services and checkout
  
• Reduced risk of credential theft
  
• Smoother payment journey for shoppers
  

Could the digital euro change payments in Europe?

Among the innovations that could shape the future of digital payments in Europe, the digital euro is one of the most widely discussed. The European Central Bank (ECB) is promoting the project to create a digital version of the single currency, usable by both citizens and enterprises for electronic payments.

The digital euro would not replace cash or bank deposits. The aim is to offer an additional public payment method, complementary to the instruments already available.

What Italian sellers can do today to prepare for the future

It is difficult to predict with certainty which technologies are likely to dominate in the years ahead. Still, it is already possible to identify a common trait among companies that will adapt more easily to the evolution of digital payments: flexible payment infrastructure.

A system designed to integrate new ways to pay without complex interventions lets you respond faster to market changes and customer expectations. In practical terms, focus on the following areas:

• Support the payment methods your customers prefer, including mobile wallets
  
• Adopt platforms built to integrate emerging technologies, such as instant payments and open banking–based solutions
  
• Invest in fraud prevention systems powered by AI to enhance security while limiting friction in checkout
  
• Monitor the evolution of the European regulatory framework, including initiatives related to the digital euro and digital identity
  

How Stripe Payments can help you

To achieve this aim, it is important to have a payment platform that can evolve alongside your business and the changing demands of the market. A flexible solution helps integrate new payment methods, simplify expansion into new markets, and deliver a consistent payment experience across all channels.

Stripe Payments provides a unified, global payments solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save engineering time with prebuilt payment UIs, access to 125+ payment methods, and Link, a wallet built by Stripe.
  
• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.
  
• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalize interactions, reward loyalty, and grow revenue.
  
• Improve payments performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.
  
• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.
  

Learn more about how Stripe Payments can power your online and in-person payments, or get started today.

FAQs on digital payments in Italy