Finance Monthly - October 2021

60 Finance Monthly. F i nanc i a l Innov a t i on & F i nTech Modernisation will drive a boom in digital payments Spain has a developed payments mar- ket, with 86.3 million credit, debit and charge cards used by a population of 47 million for 5.58 billion payments with a value of €210.56 billion via 1.7 million point of sale (POS) terminals and more than 115,000 online mer- chants. But as mentioned above, cash use remains relatively high suggesting there are still opportunities for cards to replace cash. The foundations for huge growth in digital payments already exist. Spain’s three major payment systems merged into a single provider, SistemaPay in 2018. As well as rationalising the previously complex infrastructure, Spain’s banks and regulators have upgraded and modernised the tech- nologies that power their payments system. This has led to the enable- ment of instant payments and other services, while regulatory sandboxes have provided a catalyst for trials of new payment methods between Fin- Techs and banks. While all European markets saw a rise in e-commerce during COVID-19, Spain enjoyed the fastest growth in this sector among all Southern Eu- ropean nations at 15%, with e-com- merce accounting for double the pro- portion of national GDP compared to the UK, at 4.5% compared to 2.25% of total GDP. As well as e-commerce, contactless transactions for in-person payments grew during the pandemic. Spain’s smaller merchants are continuing to open up to electronic payment both in-store and online. Having previously been something of a desert in terms of opportunities for payments players — largely because of its bureaucratic systems and stand- ard debit-led card portfolios — the outlook is now much brighter. The modernisation of its payment systems and speed of digitisation means issu- ers could be set for a boom in busi- ness over the next three to five years. SPAIN: