Goodbye cash, Covid and Cashback win (upfront) electronic payments

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The most extreme forecasts say that only the Monopoly money will remain on paper. This will not be the case for most economists. However, it is certain that cash is losing ground and soon electronic payments may overtake those made in cash. Already in 2021 they could lose a record that, a forecast by the Digital Innovation Observatories of the Politecnico di Milano reported by Sole24ore, gave to banknotes until 2022.

What brought about the acceleration? Most of all, the Covid 19 pandemic. Withdrawals collapsed in the months of the lockdown. The drop was 20%. It is true that there were few shopping opportunities with the shops closed. It is equally true that the only ones came from online where the payment is electronic. In addition, the need for distancing has led to a choice not to use banknotes to touch as little as possible what had passed into the hands of others.

However, Italy lags behind the rest of Europe. With us, on average there are 77 digital payment transactions per year per inhabitant, the Eurozone average almost double, 150. In the December 2020 analysis of the Department’s experts Monetary circulation and retail payments of the Bank of Italy, however, it appears that cash is increasingly used, especially for small transactions. For the rest, the contactless mode with card or smartphone wins.

It is the whole cash cycle that has lost momentum: no withdrawals to ATM, less cash purchases, also due to the smaller presence of tourists and foreigners, less cash to be paid at the end of the day. The whole economy benefits. Without digital payments, the bill for the economy in the months of the lockdown would have been even higher.

The cashback which aims to combat tax evasion and to do so by decreasing the circulation of cash. It does so with a premium to those who make digital payments, the value is given by the number of payments rather than the high value of each one because the maximum reimbursement for any operation is 15 euros. It takes 50 in a semester from 1 January to see the return on the current account of a maximum of 150 euros. The expenses made in physical shops are worth it, but also those for professionals and artisans, for car insurance, car tax and fines.

In addition comes the Super Cashback which is up to the first 100,000 citizens who carry out the largest number of transactions with cards and apps. Refunds will arrive on the current account within 60 days of the end of each validity period of the cashback: therefore in August 2021, February 2022 and August 2022. The same anti-evasion objective also had the same receipt lottery whose departure has been postponed for now.

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