SIA, which is being advised by Rothschild, has sent out requests for proposals to banks for potential roles in organising the deal and is looking to fill them in the coming weeks, the sources said.
It plans to issue shares worth 1 billion-1.5 billion euros ($1 bln-$1.6 bln) in a deal that could value the business at more than 4 billion euros excluding debt, another source said.
JPMorgan and UniCredit are expected to be frontrunners for the global coordinators spots, two of the sources said.
SIA, JPMorgan, Rothschild and UniCredit declined to comment.
SIA's listing comes after European initial public offerings (IPO) dropped to a seven-year low last year.
Yet European stock markets are near record highs boosting investors confidence and offering a window of opportunity for IPO candidates after a flurry of secondary share sales were well received this year.
Milan-based SIA is controlled by Italian state lender Cassa Depositi e Prestiti (CDP) through investment vehicle FSIA Investimenti, which owns a 57.42% stake.
CDP also owns 25.69% of SIA via its holding CDP Equity which gives the state lender an overall exposure of slightly more than 83%.
Italian lender Banco BPM and asset manager Banca Mediolanum control 5.33% and 2.85% of SIA, respectively, while Deutsche Bank has 2.58% of the company.
The company said earlier this month that it had started preparations for a Milan float which could take place before the summer.
SIA provides payment services for the banking sector and has the London Stock Exchange among its clients.
Its services include a capital markets software which aims at improving transparency during the IPO or rights issue process - though it is not clear if it will be used for the potential listing.
SIA, which has core earnings of 201 million euros, has also explored a tie up with another payments firm as an alternative option, said a source. Its bigger rival Nexi remains a possible merger partner, the sources said, adding the IPO is its main focus.
The payments sector has seen a flurry of deals in recent years, with Worldline's acquisition of Ingenico valued at 15 times expected core earnings.
In 2019, Fiserv Inc bought First Data Corp for $22 billion, while Fidelity National Information Services (FIS) secured control of Worldpay for about $35 billion.
Italy's Nexi has seen its share price rise nearly 90% since its IPO last year and trades at around 17 times expected core earnings, according to Refinitiv data, while Dutch company Adyen trades at a hefty 75 times.
"The global shift from cash to electronics payments is far from complete," said Jupiter fund manager Guy de Blonay, adding European payment stocks are expected to keep rising this year.
"Online payments should continue to grow steadily," he said.
(Reporting by Abhinav Ramnarayan in London and Elisa Anzolin in Milan. Additional reporting by Arno Schuetze; Editing by Pamela Barbaglia/Susan Fenton/Jane Merriman)
By Abhinav Ramnarayan and Elisa Anzolin