By Elvira Pollina

MILAN (Reuters) -Italy's Satispay said on Monday it would start offering its 5.5 million users a way to earn a return on their cash, in a move that heightens the mobile payment firm's competition with high street banks.

Founded in 2013, Satispay provides a mobile app for payments in shops and for money exchanges between users.

Satispay said it had joined forces with Europe's largest fund manager Amundi to allow users to put their savings into a money market fund. As of May 5, the estimated return net of costs but before taxes was of 2.24%, it said.

"This is just the first step of a longer journey," Chief Executive Officer Alberto Dalmasso said in a statement.

Available only in Italy for now, the investment service does not require a minimum size. The funds can be redeemed at a one-day notice.

The digital payment app said it had introduced in 2018 the chance for users to put some money into digital wallets, without any remuneration. Since then about 1 million people have put aside some 250 million euros.

Italians' risk aversion and their propensity to hold cash in their bank accounts rather than invest their savings have allowed banks in the country to reap record profits as interest rates shot up lifting the cost of lending, while deposit rates failed to take off.

In March current accounts in Italy returned on average 0.38%with deposits overall, including savings accounts, yielding 0.79%, data by Italian banking association ABI showed. Deposits totalled 1.8 trillion euros.

"We want to make more accessible tools that give more value to people's money so as to change a culture traditionally too focused on saving and too little on investing," Dalmasso said.

Satispay has obtained authorisation to operate as a financial investment firm from Luxembourg's financial watchdog.

(Reporting by Elvira Pollina; Editing by Valentina Za)

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