Italy, Europe — Italy proposes exempting digital euro payments under €10 from merchant fees as Brussels negotiations approach a crucial stage
Italy has proposed exempting digital euro transactions below €10 from certain merchant fees, according to sources familiar with the discussions and documents reviewed by Euronews, as negotiations over the European Union’s planned digital currency approach a decisive stage in Brussels.
The proposal would particularly benefit small businesses that process numerous low-value payments, potentially reducing transaction costs for retailers and service providers. Sources indicate that the measure has received support from members of the central banking community, including officials associated with the European Central Bank.
The proposed exemption comes as European institutions work to establish the legal and operational framework for the digital euro. The project is intended to create a publicly backed electronic payment option that would complement, rather than replace, physical cash across participating countries.
The European Central Bank has previously indicated that it wants the infrastructure for a potential digital euro to be ready for an initial issuance in 2029, provided the necessary legislation is adopted. The timetable remains dependent on political negotiations and regulatory decisions.
At the centre of the discussions is the question of how merchants would be charged for accepting digital euro payments. Keeping costs low is regarded as important for encouraging businesses to adopt the system, particularly smaller retailers that operate on narrow margins and handle frequent transactions.
Italy’s proposal therefore focuses on one of the most sensitive aspects of the planned currency: ensuring that everyday digital payments remain inexpensive for both consumers and businesses. Exempting transactions below €10 could provide additional relief where individual purchases generate relatively small revenues for merchants.
The measure has reportedly been viewed favourably within the central banking community, with a banking-sector source telling Euronews that the European Central Bank is supportive of the approach. Such backing could strengthen the proposal as governments and European institutions continue their negotiations.
The broader digital euro project reflects Europe’s desire to reduce its dependence on payment systems operated by companies headquartered outside the European Union. Visa and Mastercard currently play major roles in European card payments, highlighting the bloc’s reliance on international payment networks.
European policymakers have increasingly described payment infrastructure as an issue of strategic autonomy. Developing a digital euro could give consumers and businesses access to a European payment system capable of operating across the euro area, while potentially reducing reliance on private international schemes.
However, the digital euro is not being designed simply as another bank card or mobile wallet. It is intended to become a form of central bank-backed digital money, allowing people to make electronic payments using an instrument ultimately supported by the Eurosystem.
Unlike cryptocurrencies, the proposed digital euro would be issued within the framework of the euro area’s central banking system. It would also differ from privately issued electronic money because its underlying monetary status would be directly connected to central bank money.
For consumers, the attraction could lie in greater choice and broader acceptance across the euro area. A European digital payment instrument could potentially allow users to make payments between participating countries without relying exclusively on existing commercial card networks or individual national payment arrangements.
For merchants, however, adoption will depend heavily on costs, technical requirements and the practical advantages of accepting digital euro payments. The proposed €10 exemption addresses the cost issue for smaller purchases, potentially making participation more attractive to businesses with large volumes of low-value transactions.
The debate also illustrates the difficult balance European policymakers must maintain between encouraging adoption and ensuring that banks and payment providers remain able to support the system. Merchant fees are an important part of payment economics, while excessive charges could discourage businesses from accepting a new payment method.
Negotiators in Brussels are therefore examining how the digital euro should fit into Europe’s existing financial system. The discussions involve questions about merchant charges, consumer protections, privacy, distribution arrangements and the responsibilities of banks and other payment service providers.
The Italian proposal arrives at a particularly important moment because the legislative framework will determine how the digital euro operates once introduced. Although the ECB is preparing the technical foundations, the final political decisions rest with European lawmakers and member states.
The proposed exemption could also carry symbolic importance beyond its immediate financial impact. By targeting payments below €10, Italy is highlighting the role of small, everyday transactions in determining whether a new digital payment system becomes part of ordinary economic life.
A coffee purchase, convenience-store transaction or small service payment may appear insignificant individually, but millions of such transactions collectively shape the economics of a payment network. Lower costs on these purchases could therefore help encourage broader merchant participation during the digital euro’s early years.
At the same time, the proposal does not mean that all digital euro payments would necessarily be free of charges. The exemption specifically concerns transactions below the proposed €10 threshold, while broader rules governing merchant fees remain part of the negotiations underway among European policymakers.
The European Central Bank has positioned the digital euro as a complement to cash rather than a replacement for physical money. That distinction remains politically significant, particularly as governments and citizens debate privacy, accessibility and the future role of cash in an increasingly digital economy.
Supporters argue that a European digital payment option could strengthen resilience and reduce vulnerabilities associated with dependence on a limited number of global payment providers. A common European infrastructure could also make cross-border payments within the euro area more integrated and predictable.
Critics and sceptics, meanwhile, have raised questions about privacy, financial stability, implementation costs and the potential impact on commercial banks. Policymakers are consequently attempting to design safeguards that encourage innovation without undermining the existing banking system.
The fee debate is likely to remain one of the practical tests of the project. If merchants view digital euro acceptance as unnecessarily expensive or complicated, consumer adoption could remain limited. Conversely, competitive costs and simple payment procedures could help accelerate its use.
Italy’s proposal consequently places small businesses at the heart of the wider discussion about Europe’s monetary future. An exemption for payments under €10 would directly address a category of transactions where even modest fees can influence whether merchants choose to adopt another payment method.
As final talks continue in Brussels, negotiators must reconcile national preferences with the European Union’s broader objective of creating a coherent digital payment system. The outcome will help determine the commercial conditions under which the digital euro could eventually enter everyday use.
The potential 2029 launch remains conditional on the adoption of the necessary regulation, meaning the project still faces important political and legislative hurdles. Nevertheless, preparations are progressing, with central bankers, governments, financial institutions and European lawmakers shaping the system’s eventual design.
Italy’s proposal could become an important component of that framework if negotiators agree to incorporate the exemption. For consumers, the change could mean cheaper acceptance for small purchases, while merchants could gain another incentive to participate in Europe’s emerging digital currency ecosystem.
Ultimately, the digital euro’s success will depend not only on technology but also on whether businesses and consumers see clear advantages in using it. Keeping small transactions affordable could be an important step toward making the system practical, accessible and widely accepted.
With Brussels negotiations entering a critical phase, Italy’s proposal adds another dimension to the debate over how Europe should build its digital payment future. The final rules will determine whether the €10 exemption becomes part of the framework governing the bloc’s digital currency.
This article was created using automation technology and was thoroughly edited and fact-checked by one of our editorial staff members