Italy

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Payments

Domestic and Preferred Card Schemes

Visa or Mastercard are the preferred online payment method with 83%, much more than PayPal (13%) or American Express (4%) [1]

About 71% of Italian households own at least one payment card. Debit card penetration is currently at more than 70%, while credit card penetration is stable at 32% of Italian households. Prepaid cards are the fastest growing segment, with about a 15% coverage. Visa also covers CartaSi and Postepay. 3D Secure ismandatory with most Italian cards. A local acquirer connection is typically not necessary. (GoInterpay)

83% Visa/MasterCard 13% PayPal 4% American Express [2]

Alternative Payment Methods

While consumers in most Western European countries find a natural link between e-commerce and credit cards, Italy retains a strong prevailing culture of dealing in cash on delivery (14%). Prepaid cards issued by major banking institutions are gaining in popularity and are becoming the most frequently used type of payment card in Italy for online transactions by young people and people with generally lower income levels.

Strong differences in the methods of payment exist between the purchase of goods and services. Credit cards are utilized 99% of the time in the travel and tourism sector, and 65% in the insurance sector. On the other hand, cash-on-delivery still has a primary role in the information technology/ consumer electronics sector, and in the apparel, book/music/audiovisual and grocery sectors.[3]

Digital Invoicing

Italy is to offer a voluntary e-invoice/e-reporting regime to tax payers from 1 January 2017 also for B2B and B2C transactions (indeed, a similar system is already in place for B2G transaction). The measure is designed to reduce VAT fraud and simplify reporting. According to the Legislative Decree no. 127/2015, new rules related to business-to-business e-invoicing and e-Submission will apply. There will be several benefits to taxpayers who will adopt e-submission of the invoices issued and received and, where applicable, e-submission and e-recording of the daily considerations.[4]

Customer Experience

Italian consumers particularly appreciate the time saving aspect of shopping online (66%) as well as better prices (69%). However, personalisation is still an issue that needs to be addressed, as in other European e-commerce markets.[5]

Local Entities

CartaSI, ConsorzioTreveneto[6]

Payments Regulation

EU Directives on Payment Services (PSD) and on Electronic Money into national legislation will also drive the development of these services. Italian legislation also fully complies with EU consumer protection directives with regard to specific information that an e-commerce site must provide, and sets rigid privacy protection requirements for the opening of an e-commerce site, where companies resort to encryption, firewalls, secure protocols and digital certificates. Italian legislation recognizes the legal validity of digital signatures and digital contracts.[7]

Mobile payments

Analysts predict mobile payment services to grow significantly in the next two years and drive mobile commerce. EU Directives on Payment Services (PSD) and on Electronic Money into national legislation will also drive the development of these services.[8]

Logistics

A number of express delivery options exist for U.S. SMEs wishing to ship goods to Italy. These include services offered by global logistics companies such as Fedex, UPS, DHL, TNT and others which usually guarantee a second business day delivery to Europe from the U.S. To date the B2C delivery has been dominated by national postal service Poste Italiane and local couriers SDA and Bartolini. Most logistics companies will offer a range of options for international delivery at different price points to meet customers’ needs. These usually feature different levels of tracking and insurance. Logistics companies can also help with bulk deliveries to help cut costs and provide advice on packaging, address formats and labeling.

Italian consumers will search for the lowest possible price. Therefore when domestic retailers offer speedy delivery, it may be worth exploring domestic fulfillment options in order to compete. Logistics companies either run their own fulfillment centers or can recommend reliable local fulfillment partners.[9]

Infrastructure

Italian consumers have grown used to a fairly slow and at times unreliable domestic postal service. However, the rise of e-commerce is raising demands and expectations on speed and quality of service. While the range of delivery options available to online shoppers is expanding (including lockers and collection/return points across major cities), these are still in their infancy. As the e-commerce market develops, the options for alternative delivery points or timed slots will increase.[10]

Import Duties

Import duty and taxes are due when importing goods into Italy from outside of the EU, whether by a private individual or a commercial entity. The import duty and taxes payable are calculated on the value of the imported goods, plus the cost of importing them (shipping and insurance). The standard VAT rate for importing items into Italy is 22%, with a few exceptions, attracting VAT at reduced rates of 10% or 4%. VAT is calculated on the value of the goods, plus the international shipping costs and insurance, plus any import duty due.[11]

Marketing

The power of the internet in Italy is limitless. Dissimilar to other forms of media, a website has the potential to reach anyone with online access, which is an estimated 950 million, or 15% of the worlds population. The internet transcends counties, countries and continents, meaning market restriction is not the problem it is in other forms of publicity.

The power of a good website in Italy is unbeatable. It can raise your businesss profile, making it look more prestigious, competent and successful. Conversely, it can also give your company a tawdry, unwelcoming, even laughable appearance. A good web development in Italy becomes fundamental. If you havent realised by now, cultural sensitivity is a pretty major factor when expanding a business in Italy. And its not just words and etiquette that have a profound impact on your businesss success. Indeed, the very symbols and logos you choose to employ can also increase or negate the profitability of your operations too. Online marketing in Italy must also take this into account. And it always comes back to research. Unlike in the UK, where pretty much anything goes, and symbols and images rarely connote things like misfortune or propitiousness, the same cannot be said for foreign countries. Here in the UK, we dont take symbols of luck and adversity too literally: its all horse-shoes, rabbit feet and walking under ladders. People more prevalently steeped in the historicism and traditions of their country, however, generally perpetuate the superstition and iconicity of the generations that preceded them. This often includes such simple things as colours, shapes and numbers. For instance, using the colour red in China is a sign of virtuousness; use white, however, and youre symbolising death.[12]

Shoppers

Italian consumers tend to base their purchases on the quality of the item and the after sales service they will receive. Italians prefer packaging with clearly conveyed information. When given the choice, Italians prefer products ‘made in Italy’. Environmental criteria are less influential on decision-making. Novelty is welcomed, especially in the fashion sector.[13]

Social Media

Social networking in Italy is booming and 28 million Italians are active social media subscribers with 22 million active mobile accounts. 26 million Italians are active Facebook subscribers, a rising number of mobile surfers also utilize smartphones and tablets to take advantage of exclusive offers presented to them through social media.[14]

Major shopping categories

As for services bought online, the best performances were in travel and tourism (47% of the market value), insurance services (7.5%) and ticketing for events (5.5%). In terms of products bought online most transaction are in the information technology/consumer electronics (13%), followed by apparel (9%) and books/music/video (4%). Some of the sectors with the highest growth in 2015 are those in the food and grocery, furniture and home living and beauty products.[15]

Major retail holidays

Aside from the holiday season, there are two official Italian sales periods each year – winter and summer – when every shop has what can amount to clearance sales for 6-8 weeks. The winter sales period starts in January, usually near the beginning of the month, and lasts through mid-February or until inventory is gone. The summer sales begin in July, usually near the start of the month, and last through about mid-August or until inventory is gone.[16]

Legal / Regulatory

In Italy, the Digital Signature was introduced for the first time by article no.16 of Regulation no. 513 of 1997, and is now regulated by the Digital Administration Code, which provides for the recognition of equal rights and prerogatives between an electronically-signed document (as defined) and the equivalent paper document signed by the relevant authors. With regards to the principles of proof, under article no. 2703 of the Civil code, electronically-signed documents provide full evidence.[17]

FX Policies

This national tax rate is called IVA (Imposta sul Valore Aggiunta) in Italian, but is also known (as are all such national taxes around the world) by its English-language acronym VAT (for "Value Added Tax," which is essentially what "IVA" means). Again, on most items in Italy this tax is a whopping 20%.[18]

Technology

With under 60% internet penetration rate, and a relatively low urban population compared to other European countries, the landscape is still underdeveloped. Yet, ecommerce is taking form, driven largely by huge mobile, particularly smartphone, penetration.

Internet Penetration: 58.5%, 36 million users.[19]

Security

On January 27, 2014 the Italian Government issued a “National Strategic Framework for Cyberspace Security” and a “National Plan for Cyber-Protection and Internet Security.” The National Strategic Framework for Cyberspace Security identifies the profiles and the trends of the cyber threats that may affect communication networks and systems that are strategic for Italy, and articulates policies to be followed in order to adequately address these threats. The National Plan for Cyber-Protection and Internet Security identifies the priorities, specific goals and courses of action to make the Strategic Framework effective.[20]

Mobile appetite

Mobile Penetration: 159%, one of the highest penetration rates in Europe.

Tablet Penetration: 19.6%, Up almost 5% from 2012.

Smartphone Penetration: 38.4 million smartphone users, 64.1% penetration. Increase of 23.5% from 2012.[21]

References

  1. ECommerce News. "The Most Common Payment Methods in Europe"
  2. Expert Market "Online Payment Methods Around the World."
  3. Export.gov "Italy Country Guide eCommerce"
  4. Michaela Merz "Italy e-Invoice VAT"
  5. Twenga Solutions "eCommerce Italy Facts Figures"
  6. Export.gov "Italy Country Guide eCommerce"
  7. Export.gov "Italy Country Guide eCommerce"
  8. Export.gov "Italy Country Guide eCommerce"
  9. Export.gov "Italy Country Guide Express Delivery"
  10. Export.gov "Italy Country Guide Express Delivery"
  11. The Paypers "Ecommerce Law Italy"
  12. Start-up Overseas "Online Marketing and Digital Media in Italy"
  13. Santander Trade "Reaching the Italian Consumer"
  14. Export.gov "Country Guide Italy"
  15. Export.gov "Country Guide Italy"
  16. Italy Explained "Shopping in Italy: Official Winter/Summer Sales"
  17. The Paypers "Ecommerce Law Italy"
  18. Reids Italy "IVA (VAT) Tax in Italy"
  19. The Paypers "Ecommerce Facts and Figures: Italy"
  20. Lexology "National Strategic Framework for Cyber Security"
  21. The Paypers "Ecommerce Facts and Figures: Italy"