Bernabe Says Italy Cash Limit Will Drive Mobile-Phone Payments

Telecom Italia SpA (TIT) Chairman Franco Bernabe said Italian government measures to limit cash payments and fight tax evasion will speed the adoption of electronic payments through mobile phones.

Mobile payments based on near field communication, or NFC, technology will be deployed on a larger scale in Italy from next year, said Bernabe, who’s also chairman of the mobile-phone operators’ association GSMA. Telecom Italia is holding a trial for so-called proximity payments in Milan where users can buy tickets on public transport, pay at retail outlets and interact with smart advertising posters.

Government measures “will be one of the main drivers to adopt mobile-phone payments in Italy,” Bernabe said at a briefing in Milan today at the NFC and Mobile Money conference. “Users will also benefit from easy-to-use, handy payments.”

Prime Minister Mario Monti last year banned cash payments of over 1,000 euros ($1,300) as he sought to crack down on tax evasion. Italy loses more than 100 billion euros in unpaid taxes every year. Poste Italiane, Italy’s state-owned postal service, said Oct. 17 it will introduce NFC technology in post offices to allow clients to pay for bills, letters or parcels through their smartphones “soon.”

Other than payments and ticketing, smartphones with NFC technology can also replace store-loyalty cards and can be used to receive coupons and to unlock and start a car, Bernabe said.

“When people leave home, they are far more likely to forget their keys or wallet than their mobile phone,” Bernabe said. “NFC is based on SIM cards, which are the closest we can get to being invulnerable in terms of security.”

While new smartphones introduced on the market have built- in NFC capabilities and use SIM cards enabled for this technology, the upgrade of electronic payment systems by retailers and service providers is likely to take four to five years, Bernabe said.

To contact the reporter on this story: Chiara Remondini in Milan at cremondini@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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