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Published on 2024-02-24
Spain is the leading country in Europe in contactless payment with a physical card, with 72% of the banked population opting for this option, according to a trend report by Minsait Payments, a division of Indra.
The use of cash is losing momentum, and among the most used payment methods, the debit card stands out again in all the countries analyzed. More than 85% of the banked Spanish population has a debit card for making their payments, and 56% claim to have a credit card, whose use is lower among users. A provisional decrease in the use of credit cards that could be linked to the current economic context, where inflation and high interest rates encourage a more cautious use of credit and advocate for stability and debt reduction.
Furthermore, there is an increase in the virtual card which, until now, was mainly associated with the prepaid mode, and its application is expanded to credit and debit cards. A third of Spaniards (37%) have one, and half of those under 35 analyzed already have a virtual debit card.
The preference for using the card among the Spanish population also extends to other operations such as online payments and purchases. 66% of the Spanish population continues to use the card, with the debit modality being the most common. Additionally, the introduction of new options is increasing their presence in countries. In the Spanish market, digital wallets have an impact, used by 19% of Spaniards on a regular basis. Cryptocurrencies, on the other hand, or the Buy Now, Pay Later – BNPL solutions, which allow making purchases and postponing payments, are used by only 1% and 8% of the population, respectively.
Cash also loses impact at physical points of sale and is overtaken by cards in countries like Spain, Brazil, or Chile, joining the trend marked for years by others like the United Kingdom. According to the Payment Methods Trend Report, for 53% of industry agents, by 2030 cash will be a complementary payment method to digital ones.
EXPANSION
Digital payment methods continue their expansion and do so by consolidating new payment formulas in a growth environment that is maintained, albeit with certain restrictions, since its takeoff in 2020, and within which, the perception of sustainability increases. Although most users still do not clearly identify the implications of choosing one payment method over another, more than 60% of the banked population (61.8%) already associates cash as the medium with the greatest environmental impact, far above the rest of the electronic alternatives.
The context of digital payments and their social and environmental perspective is one of the trends analyzed in depth in the XIII Minsait Payments Report on Payment Methods Trends, which the payment technology company presents every year and which constitutes a reference point for the payment industry. Developed in collaboration with International Financial Analysts (AFI), the report gathers the opinions of more than 4,800 banked internet users from Spain, Italy, Portugal, the United Kingdom, and Latin America (Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru, and the Dominican Republic).
In this edition, the report shows how the use of electronic payments is becoming widespread in Latin America and is accelerating in Europe, where about a third of Europeans declare having joined the digitalization of their payments in the last three years, in the face of the Covid pandemic outbreak and coinciding with the rise of other alternative payment methods like Bizum, in Spain. Nowadays, applications like Bizum, or Pix in Brazil and MBWay in Portugal are gaining popularity for peer-to-peer (P2P) payments, somewhat displacing the use of physical money; 52% of Spaniards prefer it over 38% who continue using cash.
Among the recorded habits, the advancement of cross-border payments is particularly notable, which, according to the study, are expected to reach $250 trillion globally by 2027 (growing by $100 trillion in just a decade). Despite their growth, this type of payments between countries continues to be slower, more expensive, and more opaque than domestic payments and suffers from certain frictions still to be solved, such as high costs, slowness, or lack of transparency in procedures.
Experts consulted by Minsait Payments estimate that remittances are the flow of everyday payments with the greatest potential for improvement thanks to digitalization. In 2021, of the total remittances sent globally, the countries in the Report concentrated 12.15%, mainly made from the United Kingdom (4.31%, $33 billion), Spain (2.92%, $22 billion), and Italy (2.61%, $20 billion). Generally, as can be seen in the study, the economically more developed countries contribute more by being net receivers of migrants. Even within the Latin American region, this pattern is noted: remittances sent from Mexico or Argentina are higher in value than those sent from Peru or Ecuador.
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