The Italian central bank has suspended all bank card payments in the Vatican, citing its failure to implement fully anti-money laundering legislation, Italian media report.
The Holy See was required to meet European Union safeguards on finances by the start of 2013. Its failure means tourists will have to pay cash at its museums and shops.
A Vatican spokesman said contacts were under way and the suspension of bank card payments should be “short-lived”. Pope Benedict has promised greater transparency in Vatican finances and the operations of its bank, the Institute for Works of Religion (IOR), which has in the past been implicated in major money-laundering scandals.
A group of experts from the Council of Europe said last year that the Vatican had made progress in reforming its legislation to meet EU standards but that a lot of work remained to be done.
The failure to complete that work meant the Italian central bank ordered Deutsche Bank Italia, which handles all bank card payments on Vatican territory, to deactivate its terminals on 1 January.
The five million tourists who visited the Vatican museum last year spent more than 90m euros (£73m; $120m) on tickets and souvenirs.
Cash only will be accepted until a solution is reached. The same rules have also been enforced at the Vatican’s pharmacy, its post office and the few shops that operate in the tiny territory.