Home Payments Payments plus: Alessandro Moricca on ‘creating a digital ecosystem’ in Italy

Payments plus: Alessandro Moricca on ‘creating a digital ecosystem’ in Italy

PagoPA is best known in Italy as a payments platform but the organisation – state-owned through the Ministry of Economy and Finance – has a broader remit to enable digital public services. Reflecting on his first year as its leader, and looking to priorities ahead, Alessandro Moricca speaks to Ian Hall

Italy is doing things differently when it comes to encouraging the adoption of digital payments and digital public services more broadly.

Leading the charge is PagoPA, a ‘special purpose company’ wholly owned by the state through the Ministry of Economy and Finance and operating under the direction of the Department of Digital Transformation.

The organisation – whose name would translate into English as ‘I pay Public Administration’ – is described as an ‘intermediary between the market and the public sector, operating autonomously, efficiently and competitively’. Its mission is to design and build infrastructures and technological solutions aimed at promoting the ‘widespread diffusion of digital public services accessible to citizens and businesses in the simplest possible way’.

PagoPA’s chief executive is Alessandro Moricca, who is just over 12 months into the role, having previously held chief financial officer positions in the business travel management sector. He succeeded PagoPA’s first CEO, Giuseppe Virgone, who left to join a fintech company called Hype.

Moricca is at the helm of an organisation, now in its fifth full year of operation, that has grown to about 340 people. Among the aspects making PagoPA most interesting is its mission – increasingly beyond payments – to “create a digital ecosystem”, he says as we begin an interview charting the growing breadth of its operations, reflect on his first year and look to challenges ahead.

REGISTER NOW Alessandro Moricca is among the speakers at the Global Government Fintech Lab 2024 – our one-day event in Dublin, Ireland, on Thursday 25 April is free to attend for public servants CLICK HERE TO REGISTER

Platforms beyond payments

What are the increasing number of strings to PagoPA’s bow?

First and foremost is the pagoPA platform, an electronic payment infrastructure created in 2016 (so, pre-dating the establishment of the PagoPA company) as a centralised funnel for payments to the public administration. The platform allows citizens and businesses to choose how (which payment type) and with whom (which payment service provider – PSP) to make payments to the state, for example taxes, in a standardised way.

Second in PagoPA’s list of services is ‘Centro Stella’ (in English: ‘Central Star’), an infrastructure for payments flowing in the opposite direction (outwards from the state). This debuted in December 2020 to facilitate a Covid-period ‘cashback’ programme (to June 2021) – part of a broader government ‘Cashless Italia’ plan – and is now available for public sector agencies to use for ongoing welfare initiatives or citizen repayments. Centro Stella is also the infrastructure that connects to all Italian and foreign acquirers (banks that serve merchants) operating in Italy. In addition in the payments realm, PagoPA operates a ‘check IBAN’ platform for public bodies.

Moving beyond payments, PagoPA is also responsible for a public services app, ‘IO’, which has been downloaded about 37 million times and is used by an average of about four million citizens per month; SEND, a ‘digital notification service’ – launched last year – designed to enable easier access to documents; and a National Digital Data Platform (Piattaforma Digitale Nazionale Dati – PDND), which is designed to enable interoperability of public administrations’ information systems and databases (one aim here is to enable the ‘once only’ principle: so a citizen does not have to provide the same information or documentation each time they want to access a service).

With Italy being a member of the 27-member European Union (EU), PagoPA is also working with the Department for Digital Transformation in activities aimed at realising EU institution-backed digital identity wallets known as ‘EUDI Wallets’. The aim is to enable EU member state citizens and businesses to share identity data in a ‘secure and convenient’ way.


‘Real game-changer’

Highlights during Moricca’s first year include the launch of SEND – “something completely new in the Italian environment” – as well as achieving usage milestones for more established services. These include reaching one billion transactions managed by the pagoPA platform and 500 million messages sent by central and local authorities through the IO app.

PagoPA may be diversifying but he readily acknowledges that the e-payments platform with which the company shares its name is “really the main” and also the “crucial” element of its services. “It’s been the real game-changer in the Italian public sector digitalisation of the past eight years,” he says.

An average of around 12 million citizens and businesses use pagoPA each month to make payments to the roughly 18,000 public administrative bodies that have joined the platform (2023 data). All Italian public administrations are obliged by law to adopt the platform, but not all have fully integrated their systems to collect payments for all services through it. “We have approximately 400 million transactions per year [through pagoPA] – a little bit less in 2023,” he says. “We have evaluated that the market of public sector payments – public and utility payments – is approximately, let’s say the status quo is about 500 million. So, we have still 100 million that we can try to load on the system.”

So, at present roughly 80 per cent of payments to the state in Italy go through the pagoPA platform? “I would say even more,” Moricca says. “Each public administration has to use pagoPA. They can use also other means [of receiving payments] but when they discover the advantages of pagoPA, they are normally leaving the rest on the side and moving completely to pagoPA.”

And, to be clear, what are the benefits to both payer and payee? “Using the pagoPA payment platform allows bodies to manage collections in one central solution, with the same standards throughout the territory and with significant efficiency savings in collection processes,” he explains. “It makes any payment to the public administration simpler, safer, more transparent and innovative, allowing citizens and businesses to freely choose where and how to pay taxes, duties and public services in a standardised and inclusive way, both online and offline.”


‘Correct’ and ‘full’ implementation target

One of the big challenges facing PagoPA – indeed Moricca describes it as the biggest – is achieving “correct” and “full” implementation of PagoPA-managed platforms across Italy.

No easy task. The famously boot-shaped nation, which has a total population of just under 60 million, is divided into about 7,900 municipalities (‘comuni’), with most home to fewer than 5,000 inhabitants. “All the structures in the [small] municipalities are very ‘light’,” he says. “In a lot of cases, if you go and look at who is managing the municipality, it’s the doctor of the village. So, innovation products are quite difficult to manage.”

Italy was the hardest-hit EU member state during Covid’s first wave and is the biggest beneficiary of the bloc’s €750 billion (about £660bn) overall economic stimulus: the ‘Next Generation EU – Covid-19 recovery package’. The EU allocated about €191.5 billion (about £169bn) to Italy. Italy’s National Recovery and Resilience Plan (NRRP) (Piano Nazionale di Ripresa e Resilienza) is the government’s plan for spending the financial resources received. PagoPA is the ‘executing party’, together with other bodies, of a trio of projects that fall under the responsibility of the Department of Digital Transformation as part of ‘Italia digitale 2026 – digital strategies and initiatives of the NRRP’: an increase in digital services made available by public bodies on pagoPA and IO; the launch and gradual adoption of SEND; and the launch and gradual adoption of the PDND.

“Even the smaller municipalities are participating [in the NRRP], are trying to get money,” says Moricca. “We are making the request [but] then in a lot of cases there can be difficulties to implement simply because they are missing personnel and governance to do it.”

So, PagoPA’s toughest nuts to crack are typically the smallest localities? “I would say so,” he says. But he adds: “Just to be more specific, if we are looking to the 7,900 municipalities, 7,887 have some links to our platform. About 13 municipalities are not using our platform at all. The fact is that a lot of them are using the platform only for specific services that are very easy to be implemented and are leaving the rest of the side because it’s too complicated, because they don’t have resources, because of various reasons.”

He sees growth opportunities for pagoPA in terms of expanding the payment types payable through the platform. “We believe that the perimeter of payments could be enlarged with other things that are not yet paid in, in this way: parking charges, bus tickets and so on,” he says.


Driving citizen uptake

“We have a lot of ideas and a lot of perspectives on what it’s possible to do in future,” Moricca continues, referring back to PagoPA’s overall mission of “minimising the bureaucracy, to make life easier for the citizen” and seeking to prioritise people’s ability to have “only one point of contact for any kind of request” (of the state).

In terms of integrating PagoPA’s services, the IO app is already useable for payments (including from the state to citizens, as well as in the other direction); the SEND service transmits what are called ‘green envelopes’ from municipalities to citizens containing a ‘request to pay’ (integrated into the pagoPA platform); and EUDI Wallets are foreseen as bringing further benefits.

Integrating the products in terms of technology is one thing. Communicating the benefits to citizens – and encouraging them to use them (and/or use them more) – is another.

“I always take the example of a friend of mine,” Moricca says. “On a phone chat we were speaking with several people, and I was trying to explain that PagoPA is not only the payment platform. It’s also the IO app, it’s also SEND, and so on. I made a long comment [explanation]. And, at the end, one of them answered, saying: ‘you know, I’m not interested in the rest – for me, the important thing is that I am able to make the payment very easily without the need to go to the post office, without the need to go to the bank, I can do it with one click – and this is what is interesting for me.”

‘Not everybody is digitalised’

His friend’s perspective illustrates that PagoPA has work to do in converting some people who use pagoPA to make online payments to engage with its other services.

But, of course, there is a deeper challenge in encouraging those who continue to use ‘analogue’ ways – wedded, for example, to notes, coins and paper forms – to ‘go digital’.

“We have evaluated that approximately between 50 to 60 per cent of payments to the public administration in Italy are still done by cash, not by credit card or by bank transfer,” Moricca says.

For those who are unable or unwilling to make digital payments using pagoPA, the same system provides a paper notice containing a QR (Quick Response) code. This can be used at post offices, banks and ‘affiliated merchants’ (shops), for the outlet “to cash the money from the citizen”, Moricca explains, saying that its “systems are not only focused on digital people.”

Similarly, in respect of other services, he says that if, for example, public entities cannot contact citizens digitally using SEND, traditional paper post is used.

“The ‘digital divide’ is one of our focuses, and we cannot work without thinking every day about the fact that not everybody is digitalised,” he says, pointing out even those with smart-phones are often unwilling or unable to use their technology to anywhere near its potential.

‘State start-up’ targetting ‘self-sustainability’

In respect of PagoPA’s own financing, Moricca describes the organisation as operating like a “state start-up” with the objective of becoming “self-sustainable”.

Where possible, PagoPA identifies the most suitable business model for each platform it operates. In respect of the pagoPA platform, for example, it makes a profit from a processing fee imposed on private banks (typically between five and seven euro cents per transaction). The higher the number of transactions managed by a payment service provider (PSP) through pagoPA, the lower (per transaction) is the processing fee they owe to PagoPA.

PagoPA reported a profit during 2022 of €5.2 million (about £4.45m) and EBITDA (earnings before interest, taxes, depreciation and amortisation) of about €9.4 million (about £8m) (PagoPA 2022 results: Italian language). Figures for 2023 are yet to be finalised but the year saw revenue growth of more than 30 per cent, having a positive impact on EBITDA, Moricca says.

“We are a private company, in an official sense – our shareholder is the Ministry of Economy and Finance – [which] means that, if we are making profit, we are ticking a lot of boxes,” he says. That said, achieving ongoing self-sustainability via increasing take-up of its platforms is more important than profit maximisation.

In terms of PagoPA’s work with external partners (private companies), he says the organisation – as well as working with its own suppliers at a central level – has a dedicated department providing ‘operational support’ to “hundreds” of technology companies serving central government agencies, regional bodies and municipality administrations. “The public sector in Italy, in fact, represents a very complex, highly fragmented reality, so each entity needs to identify the best partner with the best solution that fits its context,” Moricca says.

EU Digi Wallet among main objectives

PagoPA also has a further (relatively small) income source, which relates to its participation in two consortia – the ‘POTENTIAL’ consortium and the NOBID Consortium – working on the development of EUDI wallets.

POTENTIAL, which involves 19 EU member states and Ukraine (and a total of more than 140 public-private partners across Europe), is applying the EUDI wallet to six pilots that Moricca describes as “based around the simplification of life”: access to government services; bank account opening; SIM card registration; mobile driving licences; e-signatures; and e-prescriptions.

NOBID involves Nordic and Baltic countries, together with Italy and Germany, focused on a payments use-case pilot.

“We are investing a lot of time and a lot of resources over this,” Moricca says, of PagoPA’s involvement in the two consortia. “We believe that the digital wallet is indeed one of the main objectives we [PagoPA] have for the future.”

In Italy the IO app will be the digital wallet. Moricca takes the opportunity to point out that a World Bank Group ‘Mobile Government: How-To Note’ (2023) included IO as a use-case among international mobile solutions able to combine access to public services with payments, discounts, refunds, and the promotion of certain activities such as sports and cultural events.

‘Data is at the centre of our activity’

Given that Moricca’s career until the past year or so has been spent in the private sector, it’s interesting to hear his perspective on moving into an organisation with a reporting line straight into government.

“The biggest challenge for me [during 2023] has been moving from the private sector to the public sector,” he admits.

He refers to time spent on data privacy compliance as “definitely something that is impacting the public sector a lot.”

“This does not mean that the private sector is completely uncontrolled,” he continues. “But definitely […] all these processes are much more put under attention in the public [sphere]: a lot of reports to be done, a lot of investigations to be done, and so on.”

He shares an observation that will have many working in and around financial technology nodding along. “I’m always saying that data is at the centre of our activity. The way of combining the data of different public administrations, different databases, it’s our core business,” he says. “Of course, having the this very big focus on data is allowing us to create new things, and to create what the state, the government, the parliament is needing to solve citizens’ issues.”

But data compliance-related obligations aside, he has also been “surprised” by what he describes as a “very private-sector” mentality among colleagues, welcoming to innovative ideas and processes. About 77 per cent of PagoPA’s staff are, like him, from a private-sector background. Location-wise, PagoPA team members are located in every Italian region, often working from home. Most are affiliated to PagoPA’s headquarters in capital city Rome or a large Milan office.

‘Avoid local solutions’

Asked the main lesson that PagoPA has learned in its journey to date, Moricca says that centralised solutions “can be the future and create efficiency to the system” and constitute a better approach than multifarious local or public entity-specific solutions.

“Our goal is to resolve the inefficiencies generated by a high fragmentation of IT systems and by different degrees of adoption in different parts of the country, through national digital infrastructures offering the same standards and opportunities to all users: entities, citizens, enterprises,” he says.

He set things in context. “The main objective that PagoPA had from the beginning was to give exactly the same opportunities to citizens whether they are living in the north of Italy or in the south of Sicily. So, avoid local solutions – that’s the main point.”

Like most countries with similar ambition, there is still quite the journey left to travel. The 2023 edition of an annual European Commission-backed ‘mystery shopper’-style research exercise that culminates in a country-by-country ranking of the digitalisation of public services – the ‘eGovernment Benchmark 2023’ – placed Italy in 27th place (of 35 nations). Relatively tiny European nations such as Malta and Estonia have consistently scored highly in this and other similar rankings. 

“If you look to the top, they are always small countries. There is not one big country in the first ones,” Moricca responds, with a grin. “On the topic of digital, Italy certainly lags behind some European countries that are nevertheless quite different from ours in terms of size, population and complexity.”

“Some indicators, however, are positive,” he continues. “We are in line for increased digital services compared to countries such as Germany or France, which are more similar to Italy. For example, Italy has already made a mobile app available to 37 million citizens from which to access digital public services. Our goal is to accelerate the digitisation of public administration so that people can easily access rights and services. But we are inside a process, it is not done in a day.”

Priorities for 2024 and beyond

So, what’s next for Moricca’s second year at the helm?

“The main focus is developing more features for the platforms that we have, and to involve more and more entities, especially on the notification platform [SEND].” At present about 2,000 municipalities and three out of Italy’s 20 regions are using the service.

A separate priority is increasing interoperability, which he defines as “the possibility for the public entities and also the private [entities] in some specific cases to exchange information.” Interoperability already exists to an extent, of course: it is PDND’s raison d’etre; and, separately, pagoPA is integrated into IO apps.

Work in respect of the EUDI Wallet consortia is also important. He highlights that by 2026, all EU member states must make the EUDI Wallet available to their citizens free of charge. “We need to be ready for this,” he says, adding that PagoPA is contributing to the Italian government’s objective to have a public digital wallet “up and running this year, or at least to be very advanced in order to be able to influence decisions on the final EUDI Wallet framework.”

Guiding this activity, and everything else, Moricca and his senior team are putting the finishing touches to a three-year plan to run from 2024 to 2026.

“In technology, three years is like the Paleolithic period to today,” he quickly says – an acknowledgment that the pace of change in technology itself is just another challenge PagoPA faces as its responsibilities grow. 

CLICK HERE TO REGISTER (FREE FOR PUBLIC SERVANTS) for our one-day international event in Dublin, Ireland, on Thursday 25 April 2024