SIA Expo 2014: Will Italy Embrace Digital Payments?

Francesco Caio, CEO of Poste Italiane, cited his organisation’s Postepay prepaid card scheme as one successful narrative in this space. Created back in 2003, Caio said that today 25% of ecommerce payments in Italy are made using Postepay. 12 million Italians use the service, and Caio noted that 45% of its users are under 35. The system has recently added the option of including an International Bank Account Number (IBAN) to the card, which increases its functionality. For example, Italians could use SIA’s new Jiffy app to make a P2P payment to a friend’s IBAN-associated Postepay card. Caio said that he believes Poste Italiane has both the physical and digital infrastructure in Italy to help increase the penetration of digital payments in the country.

Telecom providers also have a role to play in promoting digital payments in Italy. Aldo Bisio, CEO of Vodafone Italia, commented that while use of digital payments in Italy may be lagging, the country is advanced in terms of the penetration of smartphones in the market. He cited research that found Italians spend two hours per day on their smartphones, the most in Europe. Bisio said that with the popularity of smartphones among Italians and the infrastructure in place (for example the 4G mobile communications standard has been rolled out across the country) there is a great opportunity for the digitalisation of Italian payments.

Addressing how to engage a greater number of Italians with digital payments, Stefano Quintarelli, a member of the Italian parliament, said that the industry needs to carry out a systematic marketing and educational campaign on the issue. He said that it wasn’t just individuals in the country that are not engaging with digital, noting that some utility providers still don’t allow bill pay using bank transfers. Quintarelli said that the industry needs to work hard to change the mindset of both customers and service providers, and that all stakeholders in the digital economy must work to simplify services and put users firmly at the heart of planning.

Bisio said that Vodafone has issued approximately 500,000 smart pass cards that facilitate digital payments for the company’s customers. He made it clear that Vodafone wants to provide services to its customers beyond simple connectivity, and that mobile payments are an example of this. Bisio predicted that in five years time, 50% of Vodafone Italia’s customers will be making mobile payments.

Addressing the launch of Apple Pay this year, Bisio said that he saw this as 80% opportunity and 20% threat to Vodafone Italia in the digital payments space. He commented that Apple has always been a catalyst for innovation – citing iTunes and the iPhone as examples – and that this could be expected to be seen from Apple Pay as well. With Apple putting the security for Apple Pay on the handset rather than on the sim card, Bisio commented that this confirmed NFC is the technology to drive digital payments forward. Indeed, he said that there are already five million NFC-enabled phones in use in Italy today. Bisio concluded with a call to action, saying that telecom companies and banks must work on synergies in Italy’s mobile payments system in order for it to be successful.

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