Confession time: I’m a type of infuriating prospects — apparently despised by Italian small enterprise homeowners — who pays by card even for my €1.70 morning cappuccino. As a outcome, I used to be glum about Italian prime minister Giorgia Meloni’s proposal to allow the nation’s companies to demand cash for any transaction beneath €60 — a threshold nicely above Italy’s €47 common digital transaction measurement.

In the tip, Meloni has abandoned the concept after a reproach from the European Commission, which referred to as it counter to Italy’s to pledge to battle tax evasion. So Italian shoppers and I’ll retain our freedom to make cashless funds for all the things from a gelato to a tomato and mozzarella panino.

Having moved to Italy from India a 12 months in the past, I’m intimately conversant in the mechanics of cash-based economies. In Delhi I used to be continuously queueing at my native ATM to withdraw the money required for practically each buy — from recent fruit and greens to taxis and so forth up the worth chain even, for my first flats there, home lease.

Judging by the throngs at ATMs, I wasn’t the one one. I usually waited behind individuals making a number of withdrawals from a number of totally different playing cards in a single go to. India’s prime minister Narendra Modi did attempt to break his nation’s money habit with shock remedy: invalidating 86 per cent of India’s forex in circulation one evening in 2016. The eccentric experiment — which had Indians queueing for weeks at banks to change their ineffective previous notes for newly printed ones — was justified as a strike in opposition to black cash and a leap into the digital period.

Yet loads of Indian retailers nonetheless levied a 2 per cent surcharge on prospects who paid with playing cards, and even needed a receipt of their transaction. Today, India’s cash-to-GDP ratio is round 14 per cent, the identical because it was earlier than the financial gut-punch of demonetisation.

After spending a lot time on money administration up to now, I’ve shortly obtained hooked on the convenience of digital funds right here in Rome, the place bars, groceries and eating places settle for my card with out query. There are exceptions: a pal from the US arrived from the airport in a taxi that angrily refused her bank card, sending me scrambling to seek out sufficient money to pay for the journey.

Plenty of Italians are discovering the comfort of digital funds too. Across Europe, money use is falling: a brand new European Central Bank study discovered money funds now account for 59 per cent of all in particular person purchases, down from 79 per cent in 2016.

Italians nonetheless use money extra usually than the eurozone common — for round 69 per cent of in-person transactions, however that too is down 13 per cent since 2019. The ECB discovered 58 per cent of Italian shoppers most well-liked cashless funds, in comparison with simply 18 per cent that strongly desire bodily cash.

But shoppers’ rising enthusiasm for digital funds just isn’t shared by Italy’s small enterprise homeowners. They complain bitterly in regards to the excessive financial institution charges for processing card funds. And money gross sales are additionally much more simply hidden from tax collectors.

Since mid-2022, Italian companies have been nudged to just accept card funds by the spectre of a modest penalty — €30 plus 4 per cent of the transaction worth — in the event that they refuse, although analysts say it’s extra a sign of official priorities than an actual risk.

But when Meloni proposed scrapping the penalty altogether for so-called “low value” transactions, I obtained an unsettling glimpse of the long run. In the city of Bressanone, an upmarket café put an indication within the window mandating “cash only” below €60. The proprietor advised a neighborhood newspaper that purchasers with out ample cash of their pocket shouldn’t trouble coming in. Many enterprise homeowners cheered.

I get that Meloni — by no means a fan of huge banks — needed to facet with small enterprise homeowners raging in opposition to huge capital. Yet Italy, with its precarious public funds, can not afford to drive financial exercise underground, past the taxman’s attain.

In the tip, Meloni has been pragmatic. I too am attempting to be extra considerate in regards to the pressures on my neighbourhood companies. Now once I purchase my morning espresso, I fish round in my bag for a €2 coin, and drop it within the barista’s hand.

amy.kazmin@ft.com