The exemption could make Europe’s public digital currency practical for everyday purchases.
BRUSSELS, BELGIUM
Italy has proposed eliminating merchant fees on digital euro payments worth less than €10, seeking to encourage the new currency’s use for coffee, newspapers and other small purchases. The measure has reportedly gained support from central-banking representatives as European institutions enter decisive negotiations over the digital euro’s final regulatory framework. It remains a proposal rather than an approved rule.
Consumers are already expected to receive basic digital euro services without charge. Italy’s initiative addresses the other side of the transaction: the fees paid by retailers and service providers. Those costs can be particularly significant for small businesses because low-value sales leave little room to absorb payment-processing charges. Removing them could give merchants a direct incentive to accept the digital euro and help it compete with cash and existing mobile-payment systems.
The proposal also exposes a central difficulty in designing the currency. Banks and payment companies would be responsible for distributing digital euro wallets and processing transactions, requiring substantial investment in technology, cybersecurity and regulatory compliance. The European Central Bank estimates that implementation could cost eurozone banks between €4 billion and €6 billion over four years. Financial institutions expect merchant fees to recover part of that expenditure, making exemptions attractive to retailers but potentially contentious for intermediaries.
The digital euro would be central-bank money in electronic form, not a cryptocurrency or a replacement for banknotes and coins. It is intended to work online and offline while providing a European alternative to payment networks dominated by non-European companies. More than three-quarters of card transactions in Europe are currently processed through international providers, a dependency that Brussels increasingly regards as an economic-security concern.
European policymakers must still settle questions involving privacy, holding limits, mandatory merchant acceptance and compensation for banks. The ECB is preparing for a possible launch in the second half of 2029, but issuance depends on completion of the EU legislative process. Italy’s proposal therefore concerns more than the price of small transactions: it tests whether the digital euro will function as accessible public infrastructure or become another payment method shaped primarily by commercial costs.
A public currency becomes meaningful only when ordinary people can use it without friction.