The Bank of Italy has suspended all card payments in the Vatican until further notice over a failure to implement anti-money laundering law, according to local press reports.

Italy's central bank ordered Deutsche Bank Italia, which handles bank card payments in the city state, to deactivate terminals on January 1, says AFP.

The move affects anyone attempting to pay by card at the Vatican museum, which was visited by around five million tourists, paying a total of more than EUR90 million, last year.

Visitors to the Vatican museum, as well as the pharmacy, post office and a handful of shops, are being asked to pay in cash.

Italian central bank sources told La Repubblica that the Vatican does not respect international AML rules and an Italian-registered Deutsche Bank Italia can therefore not operate on its territory.

A Vatican spokesman told Corriere della Sera that the state is working to find a non-Italian bank to work with and the suspension should be "short lived".