How Italy’s FinTech ecosystem is being shaped

After receiving applications between November 2021 and January 2022, Italy’s regulatory sandbox for FinTech innovation was officially opened this month.

As PYMNTS reported earlier this month, regulatory sandboxes have proved a hit with governments around the world, and since the UK launched the first one in 2016, sandboxes around the world have spurred innovation and cultivated a new wave of FinTech startups.

Read more: How the UK’s regulatory sandbox is fostering fintech innovation, driving multi-sector growth

payment methods

As elsewhere, many of Italy’s FinTechs are keen to bring innovative payment solutions to businesses and consumers.

For example, Scalapay has emerged as one of the leaders in the country’s buy now, pay later (BNPL) landscape by focusing on the small-ticket transactions for which Italians are most likely to use the service, the firm’s CEO Simone Mancini told PYMNTS in an interview.

Read more: CEO of Scalapay says BNPL Super App Strategy disintermediates the Merchant

“Most dealers in Italy, France and Spain were quite skeptical and believed that their customers would not need it [BNPL] for 30 euros to 50 euros in products, but we were able to prove that it was quite useful, he said. “And when they activated Scalapay, they saw 10 to 20% of customers adopting it right away.”

Italians asked about their payment methods for PYMNTS’ “Benchmarking the Digital Transformation” report said BNPL accounted for just 1% of all online payments. While this suggests Italians may be wary of the payment option Mancini alluded to, it also indicates the huge growth potential BNPL has in the online payments market.

See more: Benchmarking the EU’s digital engagement

Besides BNPL, other innovative players in the Italian consumer payments space include Splittypay, which helps people split payments between multiple cards, and TackPay, a mobile tips app.

When it comes to alternative payment methods, Italians are among the top users of cryptocurrency in Europe. According to Statista, 48% of Italians have previously used some form of cryptocurrency to make online payments.

Moreover, research conducted by Qualtrics on behalf of Coinbase revealed that 33% of people are convinced that crypto will have a positive impact on society and that one in four owned crypto assets.

In that survey, 26% of respondents claimed to have a good knowledge of cryptoassets, higher than in other European countries surveyed. In France, the figure was 18%; in Germany, 20%.

Regulation

In Italy’s regulatory environment, crypto exchanges are taking advantage of the Italian government’s ambitions to become a leader in the use of blockchain technology to strengthen its presence in the country.

Following the introduction of a special section of the Organismo Agenti e Mediatoris (OAM) registry dedicated to crypto asset service providers and crypto wallets, international and native Italian exchanges and wallets have had to apply for permission from the OAM to operate in Italy.

Last week, OAM officially registered and authorized Crypto.com. The approval effectively allows Crypto.com to offer its products and services to Italian customers.

Read more: Crypto.com launches in-app purchases with Google Pay

The latest news follows a similar decree by the OAM in May, which granted Binance a license to operate as a crypto-asset service provider.

The successful licensing of two of the world’s most popular crypto exchanges with OAM shows that the Italian market for crypto assets is certainly attractive enough to warrant any expenses associated with registration.

But while the OAM registry proves the viability of a licensing framework for crypto firms, the legal status of the assets themselves is still by no means clear.

While the Italian government passed legislation issuing a statutory definition of blockchain and smart contracts in 2019, as in many European countries, the exact legal status of digital assets in the country is ambiguous.

Much of the government’s interest in crypto-assets seems to revolve around the question of how best to tax them. In this regard, Italian tax authorities are bound by the EU-wide framework for crypto taxation as established by the European Court of Justice.

For all PYMNTS EMEA coverage, subscribe to the daily EMEA newsletter.