Italy wants digital euro payments under €10 to cost merchants next to nothing, putting small businesses at the center of Europe’s debate over how the new digital currency should work.
The proposal would cap merchant service charges at €0.02 for low-value transactions, with negotiators also considering a model that would effectively bring those fees down to zero.
The push comes as European lawmakers work through legislation for the digital euro, a central bank digital currency designed to sit alongside cash rather than replace it. Italy’s proposal has attracted support from the European Central Bank, according to Euronews.
For small businesses, the issue is less about futuristic money and more about the cost of accepting it.
Why digital euro payments are becoming a small-business issue
Merchant fees have become one of the most sensitive parts of the digital euro negotiations, alongside another controversial question: how much money users should be allowed to hold in their digital wallets.
Small merchants often have less bargaining power than large retailers when negotiating payment costs. An ECB analysis found that smaller businesses can pay three to four times more in fees than their larger counterparts.
That disparity is helping shape Italy’s position. The proposal is aimed particularly at lower-value transactions and smaller merchants, where even modest payment charges can have a more noticeable impact on margins.
The proposed fee structure would also be temporary. According to internal documents cited by Euronews, the compensation arrangement could give the ECB time to collect more information about payment costs before establishing a longer-term framework.
That matters because European policymakers are still working with limited data. The European Court of Auditors has previously warned that there is not enough information available on merchant fees and the broader costs of accepting payments.
In other words, Europe is trying to write the rules for a payment system while some of the real-world economics are still being mapped.
Digital euro payments are part of a bigger European ambition
The fee debate sits inside a larger political project. The digital euro is intended to reduce Europe’s dependence on payment networks controlled by US-based companies such as Visa and Mastercard.
That makes the project about more than creating another way to tap a phone or pay at a checkout. It is also about building a European payment infrastructure that policymakers see as strategically important.
Still, the success of that ambition could depend on the smallest transactions.
A digital currency may have the backing of a central bank, but consumers and merchants are unlikely to care much about the architecture behind it if using it feels more expensive or complicated than existing payment options.
Italy’s proposal attempts to address that friction before the system launches.
The ECB is currently targeting a potential first issuance in 2029, assuming the necessary legislation is adopted this year. EU negotiators are scheduled to resume discussions on Sept. 10, bringing the fee question back into focus.
For merchants, the appeal is straightforward: the cheaper it is to accept a digital euro, especially on small purchases, the less reason there is to treat it as another cost layered onto the checkout.
For Europe, however, the stakes are broader. Digital euro payments are becoming a test of whether the region can build a public payment system that works not only for financial institutions and policymakers, but also for the corner shop, café and independent retailer.