The body of 74-year-old Norveo Fedeli was found in his clothes shop in Viterbo on Friday.
Police said he had been struck repeatedly over the head with a metal stool.
Authorities released video surveillance of a young man wearing sunglasses and a back-to-front cap who was carrying a shopping bag close to the scene.
On Saturday, they arrested 22-year-old Michael Aaron Pang at a bed and breakfast in the nearby town of Capodimonte.
He allegedly had small cuts on his hands and face and traces of blood on his shoe.
Investigators said they had “strong evidence” to charge Pang with murder and robbery.
Pang, who was born in South Korea, is a graphic designer from Kansas City who arrived in Italy a few months ago on a tourist visa, according to local authorities.
He has reportedly been renting a room in Capodimonte for the duration of his stay.
It is alleged Pang killed Fedeli because he was unable to pay for purchases from his shop.
Italian daily Il Messaggero reported that Pang had visited the store previously and on the last occasion had returned to collect an order of designer clothes worth €600 (AU$963), but his credit card was rejected.
Pang allegedly murdered Fedeli then stole the shop owner’s wallet and changed his clothes before leaving the store.
Fedeli’s wallet and other items linking Pang to the killing were found in his residence in Capodimonte.
Pang does not speak Italian and was using a translator on his phone to communicate with local residents, authorities said.
He faces murder and robbery charges and will appear in court on Monday.
