Expanding your business to accept payments from customers in Italy opens up access to an extensive market. Italy has one of the largest ecommerce customer bases in Europe, with approximately 40 million online customers. However, effectively reaching this customer base requires businesses to understand which payment methods customers in Italy prefer and how to comply with local payment laws and regulations.

Below, we’ll describe how to create a successful strategy for accepting customer payments in Italy:

• Prioritizing flexibility
  
• Embracing digital innovations
  
• Boosting security measures
  

The state of the market

In the context of global payments, Italy sits at an intriguing intersection of tradition and innovation. While Italians have historically preferred to use cash, the nation is gradually shifting toward digital methods. They’re increasingly using mobile payments and digital wallets, and over 48% of Italians use online banking services as of 2022. It’s also mandatory to use electronic invoicing (e-invoicing) for business-to-business (B2B) transactions, a system overseen by the Ministry of Economy and Finance and the Revenue Agency.

Italy’s central bank, the Banca d’Italia, maintains monetary stability and safeguards the integrity of currency and payment systems. Another key player, the Commissione Nazionale per le Società e la Borsa (CONSOB), supervises the Italian securities markets, overseeing transparency efforts and investor protection. At a broader level, Italy participates in European Union frameworks—including the Single Euro Payments Area (SEPA) and the General Data Protection Regulation (GDPR)—ensuring its financial operations reflect EU-wide standards and best practices.

Payment methods

Italians use a variety of payment methods, from traditional to modern. Here’s an overview of the key payment methods used in Italy.

Current usage

While the country remains one of the heaviest cash users in Europe, recent innovations are challenging this status quo. A 2022 European Central Bank (ECB) report found that cards account for 26% of in-person payments and 50% of online payments in Italy. At the same time, 58% of point-of-sale card transactions in Italy were contactless in 2022, up from 54% in 2019.

Adoption of mobile payments is also increasing, with services such as Satispay gaining popularity among young Italians, who appreciate the convenience and speed of peer-to-peer bank transfers. According to a 2022 report, 42% of Italians reported using a mobile wallet to pay for their last online purchase, while 20% reported the same for their last in-store purchase. Such data indicates growing confidence in the reliability and security of mobile payments.

Popular B2C payment methods in Italy

• Credit and debit cards (e.g., Bancomat)
  
• Digital wallets (e.g., PayPal)
  
• Bank transfers
  
• Buy now, pay later (BNPL) payments (e.g., Scalapay)
  
• Satispay
  

Popular B2B payment methods in Italy

• Credit cards
  
• Bank transfers (e.g., SEPA)
  
• Wire transfers
  

Emerging trends

In Italy, the majority of mobile payments use near-field communication (NFC) technology, but QR codes are becoming more common: the Italian postal service introduced a new method for QR code payments in 2020. For these types of payments, customers simply scan a QR code to pay with a digital wallet such as Apple Pay or Google Pay, a prepaid card, or with a bank transfer. QR code payments often integrate two-factor authentication methods, such as biometrics or PINs, for added security.

Ease and friction of entry

Entering the Italian market presents challenges related to sales tax, chargebacks and disputes, cross-border payments, privacy, and security. Here are a few factors to consider.

Taxes

In Italy, the value-added tax (VAT) has a standard rate of 22% and impacts the pricing of most goods and services. While customers pay VAT, the businesses collecting the payments are responsible for recording, collecting, and transferring the correct VAT amounts to Italy’s Revenue Agency—Agenzia delle Entrate.

Chargebacks and disputes

In Italy, the Consumer Code is a comprehensive set of rules that protects consumers, especially within the context of financial transactions. When a customer claims that a transaction was unauthorized, the business must prove it was genuine. As a result, the Consumer Code often favors customers in these disputes, since businesses must provide rigorous evidence.

As part of the European Union, Italy adheres to the revised Payment Services Directive (PSD2), which influences the outcome of chargebacks and disputes. PSD2 emphasizes Strong Customer Authentication (SCA), setting a high bar for transaction verification and impacting how disputes are evaluated and resolved. If a business can demonstrate that it had stringent authentication measures in place, that information can influence the outcome of a chargeback claim.

International payments

Businesses handling international payments in Italy must manage currency conversions and fluctuating exchange rates, which add more complexity. Here are a few key aspects of international payments:

• Currency conversion
  For cross-border transactions such as via wire transfers or credit and debit cards, currency conversion is often necessary—either on the customer side or the business side. When a transaction is processed, the conversion rate is determined, and a fee between 1% and 3% is typically applied. Depending on the business’s policy, the business might choose to either pass on this fee to the customer or absorb it.

• SEPA transfers
  Italy belongs to the SEPA zone, which enables fast and inexpensive transfers between the 36 member countries. SEPA Credit Transfers in particular are one-time transfers commonly used for customer and business purchases within the SEPA zone.

• Payment methods from nearby markets
  Tourists from surrounding European countries commonly visit Italy. Accepting local payment methods such as French Cartes Bancaires cards can help businesses increase sales with international tourists.

Security and privacy

Italy’s commitment to financial security, compliance, and regulation reflects its position within Europe. In order to align with EU directives and standards, Italy has implemented systems that emphasize consumer protection and data privacy. Before accepting payments in Italy, it’s important to understand the country’s regulatory infrastructure.

• Data protection laws
  Italy strictly implements the EU’s GDPR. This regulation safeguards consumer data, requiring businesses to obtain explicit consent before collecting or processing personal information.

• Payment services regulations
  Under PSD2, all payment service providers, including banks, must use Strong Customer Authentication—typically a form of two-factor authentication for electronic transactions. This has increased transaction security throughout Italy.

• Anti-Money Laundering (AML) initiatives
  Consistent with EU Anti-Money Laundering Directives, Italy has instituted rigorous controls to combat money laundering and counterterrorism financing. Financial entities must conduct regular due diligence reviews and report any suspicious activities.

• Governmental oversight
  The Unità di Informazione Finanziaria (UIF) is an organization that supervises and investigates financial bodies to ensure they adhere to anti-money laundering regulations. This entity, functioning under the Bank of Italy, provides an added layer of security by identifying and examining potentially suspicious activities.

Key success factors

Italy’s payment system, although modernizing rapidly, still grapples with several challenges. These hurdles can impact businesses and consumers alike, influencing transactions and financial exchanges in the country.

• Coexistence of cash and digital transactions
  Historically, Italy has been a cash-centric country. As of 2022, cash transactions in Italy accounted for nearly 70% of all point-of-sale payments. However, businesses should support both cash and digital transactions to support a wider audience. While international card schemes such as Visa and Mastercard are widely accepted, customers prefer local card schemes such as Bancomat and Nexi. Providing these options can create a more inclusive payment environment for customers in Italy.

• Consumer trust and financial literacy
  While customers in Italy are increasingly opting for digital and online transactions, there’s still a need to bolster trust in these platforms. The government started negotiations to potentially lower electronic transaction fees for the ease of small businesses to accept digital payments, and it has also implemented financial literacy initiatives.

• Ecommerce fraud mitigation
  As ecommerce continues to grow in Italy, so does the risk of associated fraud. In 2019, 75% of card fraud in Italy was card-not-present fraud, compared to only 20% of fraud occurring during a point-of-sale transaction. Choosing secure payment gateways and regularly performing security audits can help protect your business and your customers.

• Simplified international transactions
  The SEPA zone has simplified cross-border payments across Europe. While international transactions from other regions still present challenges, the speed and cost-effectiveness of SEPA transfers can save your business time and money.

Key takeaways

Italy’s payment market presents a unique set of opportunities for businesses. By acknowledging and acting on these opportunities, businesses can significantly improve the customer payment experience.

Prioritize flexibility

• Look beyond traditional cash and card payments
  While cash and cards remain common, embrace alternatives such as contactless payments and digital wallets to streamline transactions. Partner with relevant payment processors to integrate popular digital wallets such as PayPal, Apple Pay, and Google Pay.

• Incorporate local card preferences
  Accommodate local card schemes, such as Bancomat and CartaSi, alongside international card schemes for a more inclusive payment environment.

• Address language differences
  While Italy is predominantly Italian speaking, there are regions with distinct languages—such as South Tyrol, where German is widely spoken. Build payment interfaces in regional languages to boost customer confidence and increase ease of use.

Embrace digital innovations

• Improve mobile payment interfaces
  Create user-friendly mobile interfaces and checkout processes such as one-click checkout to facilitate more ecommerce purchases made via smartphones.

• Use electronic invoicing for B2B transactions
  It’s mandatory to use electronic invoicing (e-invoicing) for B2B transactions. Implement a robust e-invoicing system to meet this regulatory requirement and streamline the payment process.

• Educate customers about digital payments
  With the government’s push toward making digital payments more accessible, there’s a need to educate customers on the benefits and security of digital payments. Host informational sessions and provide easy-to-understand digital resources.

Boost security measures

• Proactively protect customer data
  Invest in data privacy, be transparent about data collection practices, and clearly communicate security measures to customers to build trust.

• Mitigate fraud risk
  Use fraud detection tools, such as 3D Secure authentication and machine learning algorithms, and provide clear reporting channels for suspicious activity.

• Stay up-to-date with ever-evolving regulations
  Monitor changes in payment security regulations to ensure compliance and create a friction-free payment process.