Covid changes consumer habits


Consumers in Spain are moving more and more towards electronic payments at the expense of cash, with mobile phones increasingly used, according to recent research.
A year ago, 87 percent of people in Spain were still using cash for their daily purchases rather than cards or electronic methods, and 68 percent of money spent was in notes and coins, compared with 79 percent and 54 percent on average in the Eurozone.
But by July last year, after five months of the pandemic and concerns about disinfecting and avoiding surface contact, card payments overtook cash for the first time in Spain’s history – rising to 54.1 percent compared with 45.5 percent of transactions in notes and coins.
Even before the pandemic, a total of 48 million debit cards and 37 million credit cards were in circulation in the country, and ATM withdrawal use was at a record low in terms of frequency.
Actual withdrawals were generally much higher, although they were made much less often, with speculation arising that Spain might eventually become a cashless society.
Now, this is looking set to be a reality, according to the financial services provider and market researcher Pecunpay in an investigation commissioned by Visa.
The inquiry, titled ‘A Study of Mobile Phone Payment Trends in Spain’, reveals that prior to the pandemic, a gradual rise in non-cash methods was becoming evident. Mobile payments, whilst still very much in the minority, were increasing. And in 2019 alone, Visa debit and credit card issue in Spain soared by 150 percent, and the company’s customer portfolio expanded tenfold – a situation that may have been largely due to banks nationwide adopting procedures in line with new criteria introduced in January 2018 to comply with a European Union directive on card payments, making this easier and cheaper and thus allowing smaller businesses to accept them, either for the first time or for lower amounts by reducing or eliminating their ‘minimum transaction’ threshold. A year on from the first few cases of Covid-19 being reported in Spain and 11 months after it first went into lockdown, reports show how cash is not the preferred payment method for 78 percent of consumers.
The Visa study involved a survey of a stratified sample of 2,000 people, with one-third – 34 percent – saying they used their phones to pay, although only 12 percent of the total said this was their go-to method. Just 22 percent said they preferred to pay in cash, compared with 60% who opted for card payments wherever they had the choice. Of those who say they use their phones for payments in shops, bars and other establishments, barely 7 percent said they did so all the time – at least, where this method is accepted – and just 11 percent said they did so ‘often’, compared with 16 percent who said they only paid with their mobiles ‘sometimes’. Two-thirds of those who used their phones to pay admitted that they have done so far more often since the start of the pandemic.