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Spain Payments Market Analysis

Spain is a mature market where digital wallets, credit cards, and cash dominate the payments landscape. Payments and transactions are changing rapidly, owing to the growing enterprises and consumer propensity toward digital transformation and the proliferation of smartphones. The technological advancements in smartphones, digital payment cards, and POS at retail terminals are fueling the market's growth. The market is expected to register a CAGR of 9.6% during the forecast period (2022 - 2027).

• Various emerging economies and growing nations worldwide, including Spain, are following prominent increase rates in the adoption of mobile payments due to ease of performing transactions or penetration of smartphones and the financial inclusion features offered by the technology.
• Tourism is an essential element of the Spanish economy, and encouraging citizens and international visitors to book flights and accommodations after COVID-19 is essential to the growth of Spanish e-commerce. Time savings are increasingly cited as the most important motivating factor for online purchases. In contrast, price considerations have become less critical, suggesting that the value of online shopping baskets can increase as Spaniards spend less and less time.
• Recently, many vendors have developed Buy Now, Pay Later (BNPL) services that issue virtual cards via mobile apps. This service can be widely used for in-store payments and online transactions at merchants that accept card payments. The surge in BNPL usage in Spain in recent years indicates that more and more people see these services as a convenient and cheap way to shop. Sellers of BNPL services are increasingly accepting both online and over-the-counter transactions.
• Increasing international trade, internationalization of production, and cross-border e-commerce show that the demand for digital cross-border payments continues to grow worldwide. However, digital payments from one country to another can be more costly, time-consuming, and less transparent than domestic payments due to the complex process. This can hinder the growth of the adoption of digital payments for cross-border transactions between local businesses, especially SMEs.
• Acceptance of digital payment methods has improved post-COVID-19 and play a more critical role in the long run. Cash is considered a potential carrier of the virus, and governments and regulatory agencies have advised against its use. For example, cash use in Europe has been halved in the last few days after the government's blockade, and essential shops are increasingly avoiding cash transactions.

Spain Payments Industry Segmentation

The Spanish payments market is segmented by two modes of payment - POS and e-commerce. E-commerce payments include online purchases of both goods and services, such as purchases made on e-commerce websites and online booking of travel and accommodation. However, it does not include online purchases of motor vehicles, real estate, utility bill payments (such as water, heating, and electricity), mortgage payments, loans, credit card bills, or purchases of shares and bonds. As for POS, all transactions that occur at the physical point of sale are included in the scope of the market. It includes traditional in-store transactions as well as all face-to-face transactions, regardless of where they take place. Cash is also considered for both cases (cash-on-delivery for e-commerce sales).