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Poste and mint questioned PagoPA's 500 million euro

valuation

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Italian banks fear Poste's strengthened digital payment

position

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PagoPA to play leading role in government-backed wallet

plan

By Elvira Pollina and Giuseppe Fonte

MILAN, July 16 (Reuters) - Italy wants state-backed

Poste Italiane and the state mint to revive talks to

buy PagoPA, the Treasury-owned platform that handles digital

payments to the public administration, two sources familiar with

the matter said.

Under a plan drafted last year, Poste - which has expanded

beyond its core mail and parcels business into financial,

broadband and energy supply services - would take a minority

stake in PagoPA to bolster its payments business.

But negotiations hit a snag over the valuation of PagoPA,

with Poste and the mint questioning a price tag of 500 million

euros ($581 million) determined by a Treasury adviser, Reuters

reported in April.

According to one of the sources, who declined to be named

due to the sensitivity of the matter, the parties are now

seeking to finalise a deal in September, although no formal

deadline has been set.

PagoPA, which this year has handled payments to Italy's

public administration worth 57 billion euros, is set to play a

leading role in the Italian government's efforts to set up a

digital wallet through the IO mobile app.

The app enables Italians to store official documents,

including proof of their digital identity to access public

services online, and to make payments.

The prospect of Poste taking a stake in PagoPA has alarmed

Italy's crowded banking sector, which is grappling with strong

competition in digital payments from the likes of Apple ( AAPL )

, Google owner Alphabet and PayPal ( PYPL ).

For its part, Poste is concerned that part of its business

might be dented by PagoPA's plan to develop the so-called SEND

project, a digital platform for public administrations to send

and receive legal notices, a source close to the matter said.

($1 = 0.8607 euros)