who makes money behind the use of credit cards?

The Lega bill regarding the authorized threshold for the use of cash is already under discussion. Which will go from the current ceiling of 2000 euros to that of 10 thousand. A change of course that is not surprising.

In fact, already in the first months of the Draghi government, it was precisely the centre-right that was fighting for the extension of the 2000 threshold until the end of 2023. What had previously been introduced by the Conte bis government, to correct that of the Renzi government which in 2016 had it set at 3000 euros.

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Today, the opposition parties accuse the new government of wanting to encourage tax evasion and money laundering with such a measure. Is there really a correlation between the cash cap and the underground economy? Is the use of credit cards an effective means of contrast?

Fight against cash and the undeclared: is there a correlation?

According to Senator Franco Mirabelli, vice-president of the PD group in the Senate, the center-right initiative “would make it more difficult to control the flow of money. And, in addition to evasion, it would encourage money laundering”. Giuseppe Conte would also defend this thesis by stating that “now the bribes and the briefcases in black will return”. Some data tells a completely different story. A study carried out by the Study Foundation of Labor Consultants has correlated the diffusion of cash and the phenomenon of the irregular economy in the various European countries. Show how in countries with a high rate of undeclared work, which over the years have tried to combat the phenomenon by introducing restrictions on the use of cash, they have in fact achieved no results. Starting with Italy, where, however, we also know how much the undeclared is the prerogative of extremely powerful criminal organizations, capable of operating from here also in other countries.

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Looking at the data, despite the restrictive measures of recent years, the undeclared trend in our country has never undergone significant changes. Indeed, the absolute value of the irregular economy in Italy would even have increased. From 202 billion euros in 2011 to 210 billion in 2017. Instead, analyzing the situation in Germany, where there is no cash cap – because there are no criminal phenomena economically relevant – we observe how it has one of the lowest levels of irregular economy in Europe. Same story for Holland, Austria and the United Kingdom. Where even here without a cash ceiling, the undeclared never touch numbers like the Italians. What does this suggest to us? First, that escapism is primarily a cultural evil, also an action reserve for organized crime. Cui prodest then, the massive use of the credit card?

How much do private credit card lobbies “weigh”?

Who earns the most from the massive use of credit cards? The answer is the financial system. The fight against cash has rather encouraged the massive use of credit cards, it has transformed the paper notes in our possession into electronic money, which flows into the interbank system. The more “electronic” money circulates, the more resources this system has to feed itself. Not to mention the cash flow generated by credit cards for technology multinationals in the payment services industry such as MasterCard, Visa, Diners, American Express.

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The use of electronic tools generates large profits for these private intermediaries. Since 2008, we are witnessing more and more the phenomenon of debt – and no longer of savings – as the true engine of the digital-financial system, where it is precisely debt that generates these cash flows at the base of the financial derivatives industry. Financial products sold in markets that today exceed the total GDP of the real economy by about four to five times.
Tax evasion is a problem that affects our country hard, but which has not yet found its solution in the elimination of cash. Electronic money guarantees greater traceability of transactions. But the financial system, on the other hand, has often acted without scruples. Without forgetting its risky, unstable and forward-looking character. Where the logic of globalized finance requires above-average technical skills, often superior to those possessed by the financial operators themselves. Escaping the understanding of citizens.