Italy is pushing for very low merchant fees on small digital euro transactions as European Union institutions work through the rules for the currency’s possible launch. Under the proposal, payments below €10 would face a fee cap of €0.02 per transaction, with negotiators still able to lower that amount to zero.
The idea is being discussed as part of a broader debate over how the digital euro should be introduced and who should bear its costs. According to the reported outline, the arrangement would be temporary at first so officials can gather data and evaluate its effects in the market.
Focus on low-value payments
Italy’s proposal is aimed at purchases under €10, a segment where transaction costs can weigh more heavily on merchants relative to the payment amount. By pushing fees close to zero, the plan is intended to make the digital euro more practical for everyday small payments and more acceptable to businesses that would need to handle them.
The reported structure would set an initial ceiling of €0.02 per transaction. That figure is not necessarily final, however, because EU negotiators could still decide to remove the fee entirely for those low-value payments.
Why smaller merchants are central to the debate
The discussion over merchant compensation is especially significant for smaller businesses. They generally have less leverage when negotiating payment terms, which can leave them paying more than larger retailers for similar services.
ECB analysis cited in the discussions indicates that small merchants can face fees three to four times higher than those paid by larger businesses. A near-zero charge for the smallest digital euro payments could therefore reduce a cost burden that falls unevenly across the market.
ECB stance and temporary design
The European Central Bank reportedly views Italy’s proposal favourably. That does not settle the issue, but it suggests the idea has support from a key institution involved in the project.
Officials are considering a temporary fee model at the start rather than locking in a permanent structure immediately. The purpose would be to collect evidence on how the pricing system works in practice before making longer-term decisions. The European Court of Auditors has also called for better data on merchant costs, adding weight to the case for a trial-based approach.
Broader digital euro negotiations continue
The fee question is only one part of the wider legislative package for the digital euro. The planned currency is intended to complement cash, not replace it, and it would generally carry legal-tender status, meaning merchants would usually be required to accept it.
Lawmakers are also weighing limits on how much users could hold in digital euro wallets. The compensation model itself remains under negotiation among the European Commission, the European Parliament and EU member states. If the rules are approved, the digital euro could launch as early as 2029.
Source: Coin Edition