The Italian central bank, Banca D’Italia, and the Vatican’s main bank, the Italian branch of Deutsche Bank, stopped electronic payments and ATM withdrawals within Vatican City last week. Italian banks set the ban in place due to the city-state’s failure to comply with European Union money laundering regulations. Vatican City and the Vatican museums are a popular tourist destination, and the ban is proving a nuisance for visitors dependent on credit cards.
Within the U.S., consumers have generally been shifting away from cash towards electronic or card methods of payment. According to the Federal Reserve Bank of Boston, only 29.1 percent of consumer payments in the U.S. are made in cash. Debit cards are the most common method of payment, used for 30.9 percent of payments, and credit card payments comprise an additional 17.1 percent. Cash is typically used for smaller payments, with the total dollar amount for cash transactions comprising only about 8 percent of the total dollar amount of consumer expenditures. If debit and credit cards were not permitted, the amount of cash needed by consumers would increase almost fivefold.
Presumably, ATMs, banks, and currency exchanges near the Vatican are currently experiencing a similar increase in demand (and probably also in exchange fees) as visitors scramble for cash.