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| - Long a country where cash is king, Italy has been prodded towards electronic payments in 2020 by the coronavirus pandemic, while the government is adding encouragement of its own to boost struggling shops and crack down on tax evasion. A new cashback initiative launched this week offers an automatic refund from the state to citizens making in-store purchases with a bank card or smartphone app, as long as they first register their payment methods on the government's own IO app. In a sign of the idea's popularity, the systems behind IO were overwhelmed when 7.6 million people downloaded it by the day of the scheme's launch on Tuesday. The cashback programme "covers purchases made in shops as well as payments to craftsmen, plumbers, electricians, a lawyer or a doctor," a finance ministry spokesman told AFP. Italy's government hopes that by encouraging people to pay digitally, the country can crack down on chronic tax evasion that costs the public purse up to 100 billion euros ($120 billion) per year according to official estimates. Its broader "Italia Cashless" plan aims to "widen the tax base" in Italy and "provide an incentive to improve compliance with tax rules", the spokesman said -- in other words, making sure more people pay the tax they owe. It is still common for shoppers in Italy to run into refusals when they ask to pay with plastic. But data show that the country is gradually coming around to the idea. The percentage of transactions using cash dropping from 68.4 percent in 2016 to 58 percent in 2019, according to a study by Italy's central bank and the European Central Bank -- although even that figure leaves cash payments well above the eurozone average of 48 percent. The coronavirus pandemic has accelerated the trend in 2020, with more people switching to cards to avoid handling cash and choosing to shop online during lockdown. Prime Minister Giuseppe Conte said that by bringing forward the cashback scheme -- originally slated to begin on January 1 -- he hoped instead to direct pre-Christmas spending towards brick-and-mortar shops that suffered through lockdown. The programme excludes internet shopping, where users have no option but to pay by card. "This is a period in which we have all increased (online purchases), but now we must favour in-person businesses," Conte said earlier this month. The government has earmarked 1.75 billion euros for the scheme for 2021, and three billion for the following year. Under "Christmas Cashback", users will get back 10 percent of each purchase up to a maximum of 150 euros before the end of the year, as long as they make at least ten digital transactions. There were some technical glitches on launch day, with many people complaining they could not activate the IO app. Blaming the "huge volume of requests" to use the system, the operators admitted some "inefficiencies" but said they were being addressed. "Everyone's crazy for cashback!" said one commentator in the left-leaning La Repubblica newspaper. He noted that it took five months for Italy's coronavirus tracking app to achieve the same number of downloads as the cashback app did in a few days -- despite the country normally being "allergic" to using bank cards. As part of its "Italia Cashless" plan, the government is also automatically enrolling those who pay by card or app in a lottery, with prizes for both shoppers and shopkeepers. In addition, the ceiling for cash payments is due to fall from 2,000 euros to 1,000 euros from January 2022. ljm/ar/ide/tgb
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