Bank of Italy: one in ten consumers only uses cash or prepaid cards

Income comes in as cash and cash goes out. It is the circuit in which approximately one in ten Italian consumers moves, according to a study by the Bank of Italy which classified payment habits. The work is based on spending diaries and questionnaires from the ECB's Space 2024 survey: 4,088 Italian respondents, assigned to five profiles with a procedure that combines human evaluation, the GPT-4.1 linguistic model and machine learning algorithms.

At the edges there are two groups. "Cash lovers", 6.6% of the population, only use cash. The "Bank-tech skeptics", 4.6%, only use prepaid cards and avoid ATMs, credit cards and apps. Together they are worth 11.2%.

The profile of the two groups is similar. Compared to the average, there are more concentrated people over 65, those with an income under 1,500 euros per month, those who have only completed their middle school diploma and those who don't work. The share of those who receive between half and three-quarters of their income in cash is significantly higher, while savings, loans and investments are much less widespread and the interest in instant transfers and crypto-assets is almost absent. On the contrary, incomes over 4,000 euros are underrepresented in both groups and more frequent among the «Well-connected», 14.6% who use cash, cards and apps on all channels.

The differences concern the relationship with the bank. The "skeptics" have even fewer current accounts than those who only use cash, but they do have cards, i.e. prepaid cards that can be obtained without an account: for the authors it is a deliberate choice to avoid banking services, while those who only use cash would be more likely constrained by other factors. Skeptics are overrepresented in the South. "Cash lovers" are the only one of the five groups with a higher than average share of women and have a relatively large presence of self-employed workers, a fact that the study links to the possible use of cash in the business. Skeptics, on the other hand, also buy online, but pay with prepaid cards.

Even the interest in new things marks the distance. In both groups the share of those who do not want to try new payment instruments is much higher than average. When there is interest, those who only use cash ask for simplicity and low costs, skeptics ask for privacy and offline operation. These are the same conditions that the study poses for the digital euro: without simplicity, low costs and protection of privacy, these consumers are unlikely to adopt it.