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Is Spain going cashless?

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The Local ([email protected])
Is Spain going cashless?
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Card payments are on the rise in Spain, but many Spaniards still use cash in their day-to-day life. Scandinavian countries are heading in the digital direction, but could Spain ever go cashless?

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¿Con tarjeta? is something you asked a lot in Spanish shops and bars, and according to recent statistics, it's on the up.

Card payments increased by 23.56 percent in Spain during the second quarter of 2022, according to data from the Bank of Spain.

Card payment transactions have been steadily rising in Spain since the start of COVID-19 pandemic because physical money - especially coins - were considered unsanitary.

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This is part of the reason why both the rise in the number of card transactions (23.56 percent) and in the amount paid for on card (25.05 percent) have reached record highs.

The number of cards in circulation has also risen by 1.44 percent to 87.9 million, meaning there are almost double the amount of bank cards than there are people in Spain.

In perhaps what might allude to the current cost of living crisis, credit cards have increased by 7.1 percent, and debit cards fallen by 2.95 percent. 

Cash withdrawals also increased by 2.37 percent in the second quarter, with 170.8 million ATM withdrawals across Spain.

Still, that figure is far lower than the pre-pandemic figure, when a staggering 900 million cash withdrawal operations were registered in 2019.

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Despite the underlying trend towards digital payment, experts believe the shock of inflation and cost of living crisis could cause a short-term uptick in cash payments in Spain as a means of controlling spending.

According to Helena Tejero, a Director from Banco de España, using cash is "a good way to keep the money that comes out of the wallet at bay" and it could become more common as Spaniards tighten their belts in the face of inflation.

READ ALSO: How Spain’s cost of living increase is worse than in France and Germany

Cash only

Card payments may be on the rise, but for many Spaniards cash is still a daily part of their lives.

According to Banco de España, 64 percent of purchases in Spain are paid for in cash.

Around 1 million people in Spain are, according to a Study of Consumer Payment Attitudes in the EuroZone, living in "financial exclusion" where they can only access cash.

This is most common in rural Spain where many villages and hamlets.

The number of ATMs in Spain has also been falling since 2008. According to the Banco de España, there are now 58.4 percent fewer cash points than in 2008, although Spain is still the country with the second highest proportion of ATMs per person in the EuroZone, with 58 cash points for every 100,000 inhabitants.

READ ALSO: Spanish banks' ATMs are disappearing or being replaced

Cashless future?

Though card payments are rising in Spain, it is still a long way off countries such as Sweden and Norway, which are all but cash-free societies.

READ ALSO: Reader’s story: How I adapted to Sweden’s cashless society

In Sweden card payments (whether its card or mobile phone) make up more than 90 percent of all transactions in the Scandinavian countries. Next-door in Norway, just 3 percent of purchases are made with cash.

Financial experts point to some of the benefits of transitioning to a cashless society, including a reduction in crime as there is physically less money to steal, but also the creation of a more robust and far-reaching digital paper trail, which makes financial crimes such as money laundering more difficult.

On the other hand, many people feel moving away from cash comes with its downsides. For many bank cards and online banking is a steep technological learning curve, it leaves you with no other option in the case of technical issues and, as the Banco de España suggested, for some people the lack of physical cash can make controlling spending more difficult. 

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