Italy has decided to introduce a cashback system, refunding 10% of the amount of purchases made by credit card in shops during the month of December, up to a limit of 150 euros per person. Zoom in on this Italian government initiative.
Refunds of up to 150 euros
It's good news for Italians, for dematerialized payments and for merchants: since December 8, the Italian government has offered to refund 10% of bankcard spending in physical stores by consumers over 18.
More specifically, purchases may have been made in local shops, but also in restaurants and with craftsmen. A minimum of 10 purchases must have been made, by credit card only, and the refund ceiling is set at 150 euros.
This cashback scheme will be extended beyond the holiday season, and should only end on June 30, 2022 at the earliest. Cashback will continue to be 10%, capped from 2021 at 150 euros per half-year, or 600 euros per year for a couple.
To benefit from the refund, Italians must download the IO application, managed by the PagoPa platform, or use the services of Satispay, Yap or Nexi Pay, licensed payment operators. 6 million Italians have already downloaded the IO application in just a few days.
Cashback to help stimulate the economy and combat tax evasion
The main aim of the scheme, which is expected to cost the French government around €4 billion but could be offset by VAT revenues, is to encourage electronic payments as a means of combating tax evasion.
Reducing the number of cash payments will help to reduce the circulation of cash and improve control over cash flows. This is a major challenge in Italy, where cash is still favored by consumers. According to the Milan Polytechnic's Digital Payments Observatory, Italians use their bankcards half as often as the European average: 50.7 times a year, compared with an average of 117.8.
The Italian government is also planning another measure to combat tax evasion, in particular VAT fraud, which is estimated at 33.6 billion euros a year: from January 1, 2021, by agreeing to provide retailers with their tax ID number, consumers will see their receipts transformed into raffle tickets.
In addition, the cashback scheme introduced in December is a boost for retailers, restaurateurs and craftsmen, and also aims to support consumption and recovery.