By Andrea Gnetti, CEO at Excellence Payments
On May 26th, the Bank of Italy published the first of its two annual reports entitled “Payment System”, containing data on the use of payment services and instruments by households and businesses, provided by both banking and non-banking entities. The data confirm the trends observed in 2023. The growth of transactions with payment cards (debit, credit, prepaid or related instruments) continues, albeit at a slower pace. With approximately 112 million payment cards in circulation, these instruments confirmed their leading role in payments in 2024, surpassing cash in transaction volumes. In 2024, payment cards accounted for about 73% of the number of payments made with alternatives to cash, showing an increase of around 14% compared to 2023.
This figure is supported by the decline in the use of cash. In 2024, there was an acceleration in the decline of ATM withdrawals using debit cards, which decreased by about 5.5% in number of operations and 3.2% in volumes compared to 2023 (the decline in 2023 for both indicators had been about 1%).
The main focus, as a possible future alternative to traditional payment circuits, remains instant SCT (SEPA Credit Transfer) transfers, which recorded in 2024 a growth of 58.9% in number and 51.9% in value compared to 2023. Despite this growth, their percentage impact on the total of non-cash payments remains below 1% in both number and transaction volume. However, with the entry into force in 2025 of the regulation aligning their costs with those of traditional transfers, instant transfers are candidates to become potential competitors of classic payment circuits and should be monitored closely.
Despite significant growth in recent years, Italy, with 250.1 per capita transactions using non-cash payment instruments recorded in 2024, is still far from the Euro area average, which in 2023 was 394.5.
Trend analysis: debit cards remain the leader in 2024
Although 2024 confirmed the growth of digital payments, there was a general slowdown in the growth rates of volumes transacted with payment cards. The 7.5% increase recorded in 2024 is in fact lower than that of the previous year, which was 11.5%. This slowdown is attributable to various factors, including a weakening macroeconomic framework and a physiological normalization of growth after the strong acceleration driven by the pandemic. Additionally, the overall dynamic is weighed down by the heterogeneous performance of different payment instruments.
Analyzing payment solutions in detail, 2024 confirms the trend of choosing the debit card as the preferred payment tool for Italians. The data are consistent with those of 2023. This instrument generated 59.3% of the amounts transacted with payment cards, with a volume growth of 9.2% compared to 2023, versus +3.4% for credit cards and +7.3% for prepaid cards.
Regarding prepaid cards, it should be noted that, along with account cards, the product is largely comparable to a current account and the card to a debit card. The growth of this product should therefore be associated with that of debit cards. Nonetheless, the push of zero-fee digital accounts is slowing its growth. This statement is supported by the dynamics of the stock of prepaid cards, which saw an increase of 1.3% in 2024 compared to 2023.
The demand for personal credit cards continues to decline. The most evident data is the 6.1% drop in active cards recorded in 2024 compared to 2023. Even transaction volumes, while showing a modest growth of 3.3%, are growing at a much slower pace than other types of cards, highlighting a loss of ground for the instrument. This phenomenon is also influenced by the trend in interest rates, which imposes additional costs on banks that negatively affect the product’s profitability, which, for four-party schemes, has a revenue cap on transactions set by interchange fees limited to 30bps. In this scenario, installment plans become the main path to make this product profitable.
Business credit cards, on the other hand, continue to grow, where “pay later” still offers an attractive value proposition along with good profitability for Payment Service Providers. 2024 recorded an increase of 2.2% in active cards compared to 2023. The average spending per card also showed a slight increase, rising to €17,342 in 2024 from €17,055 in 2023. These trends led the sector to account for 9.2% of the number of active credit cards and 20.2% of their transaction volume.
From Card to Wallet: The New Dynamics of Digital Payments in Italy
Although the analysis by card type sees debit cards dominate, an even more important trend is changing Italians’ habits: the dematerialization of the card itself within the smartphone. A paradigm shift is underway that shifts attention from the type of physical card to the digital payment experience via phone. The growing habit of paying with smartphones is making analyses based on distinctions between debit, credit, or prepaid cards less relevant. In fact, the choice of instrument occurs at the Wallet or app level.
A key indicator of this transformation is the exponential growth of payments made via smartphones and wearable devices in stores, which in 2024 recorded, according to data from the Innovative Payments Observatory of the Politecnico di Milano, an increase of +53% in terms of transaction value. This dynamic has led mobile and wearable payments to reach an increasingly significant share: according to the same source, they now represent 9.8% of the total value of digital payments in Italy and as much as 13.3% of digital transactions in physical stores.
Consequently, two strategic fronts are opening up for issuers. The first, defensive in nature, is to ensure that their card becomes the default one within third-party Wallets. The second path, more ambitious, is to create their own proprietary Wallet. This strategy, pursued by fintech players like PayPal or Curve, aims to control the entire customer experience, enriching it with value-added services (such as loyalty programs, expense management, instant credit solutions) to avoid disintermediation and maintain a direct and ongoing relationship with the user.
In this scenario, the payment card, whether physical or virtual, does not disappear but evolves its role, transforming from a simple instrument into an enabler of a broader digital experience. Market analysis, therefore, can no longer be limited to counting cards in physical wallets but must assess which platforms and apps are able to gain the trust and habits of consumers, becoming the new privileged gateways to the entire world of financial and purchasing services.
