Digital payment methods continue to gain ground Namely, by consolidating new payment formulas in a growth environment that has been maintained since its launch in 2020, albeit with certain limitations, and in which the perception of sustainability is increasing. Although most users still do not clearly understand the implications of choosing one or another payment method, More than 60% of bank customers (61.8%) already associate cash as the means with the greatest environmental impactfar above the rest of the electronic alternatives.
The context of digital payments and their social and environmental perspective is one of Trends that analyze the topic in depth XIII Minsait Payment Report on trends in payment methods, which the payments technology company presents every year and represents a benchmark for the payments industry. The report, prepared in collaboration with International Financial Analysts (AFI), collects the opinions of more than 4,800 banking Internet users from Spain, Italy, Portugal, the United Kingdom and Latin America (Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru). and the Republic of Dominican Republic).
The use of cash continues to lose momentum
In this edition, the report shows how the use of electronic payments is spreading in Latin America and accelerating in Europe. Almost a third of Europeans say they have adopted the digitalization of their payments in the last three years, given the outbreak of the Covid pandemic and coinciding with the emergence of other alternative payment methods such as Bizum in Spain. Nowadays, Applications such as Bizum or Pix in Brazil and MBWay in Portugal are becoming increasingly popular for person-to-person (P2P) payments. So it’s kind of shifting to using physical money; 52% of Spaniards prefer it compared to 38% who continue to use cash.
In a market increasingly marked by security concerns, contactless payments with a physical card are more common in Europe than in Latin America, and Spain leads this index, with 72% of bank customers choosing the digital option. in your payments. So, The use of cash is losing its presence And among the most used payment methods in all analyzed countries, the debit card once again stands out. Nowadays, More than 85% of Spanish bank customers use a debit card for their payments and 56% report having a credit card, whose usage is less among users. A temporary decline in credit card usage that can be linked to the current economic environment, where inflation and high interest rates encourage more cautious use of credit and favor stability and debt reduction.
The number of virtual cards, which were previously mainly associated with the prepaid variant, is also increasing and their use is being expanded to include credit and debit cards. A third of Spaniards (37%) say that one and a half of the people under 35 analyzed already have a virtual debit card.
The Spanish population’s preference for using the card also extends to other operations such as online payments and purchases. 66% of the Spanish population continues to use the card, with the debit method being the most common. In addition, the entry of new options increases the presence in the countries. Digital wallets, used regularly by 19% of Spaniards, are having an impact on the Spanish market. Cryptocurrencies, on the other hand, or the solutions Buy now, pay later –BNPL, which allows you to make purchases and move payments, is used by barely 1% and 8% of the population, respectively.
Cash is also becoming less important at local points of sale and is being overtaken by cards in countries such as Spain, Brazil and Chile, reinforcing a trend that has been prevalent for years in other countries such as the UK. According to the Payment Methods Trends Report, cash will be a complementary payment method to digital payments for 53% of industry participants by 2030.
In this sense, and in order to respond to the demands of increasingly digital users, Minsait Payments also points in its report to the necessary digitization of payments at the point of sale, whatever it may be, as a very clear growth vector in which Numerous innovative proposals are compiled based on technology and advanced data processing. Cash remains in small everyday purchases but reflects a decline in favor of electronic options.
Cross-border payments and transfers
Among the habits recorded, the most notable is the rise of cross-border payments, according to the study It is expected to reach $250 trillion worldwide by 2027 (They will grow by $100 trillion in just a decade). Despite their growth, these types of payments between countries continue to be slower, more expensive and more opaque than domestic payments and suffer from certain friction points that still need to be resolved, such as: B. high costs, slowness or lack of transparency of the procedures.
The experts surveyed by Minsait Payments assume that transfers are the everyday payment flow with the greatest potential for improvement through digitalization. In 2021, the countries in the report accounted for 12.15% of total remittances sent worldwide, primarily the United Kingdom (4.31%, $33 billion), Spain (2.92%, $22 billion) and Italy (2nd). .61%, $20 billion). Dollar). As the study shows, the most economically developed countries generally contribute more as they are net recipients of migrants. Even in the Latin American region, this pattern can be observed: remittances from Mexico or Argentina have a higher value than remittances from Peru or Ecuador.
Immediacy, security and transparency
The Minsait Payments Report identifies additional variables necessary for the continued development and growth of the payments industry in the coming years. The immediacy of everyday digital transmissions is an unavoidable prerequisite for the sector and a public policy objective in practically all the countries analyzed. This lays the foundation for financial inclusion and the necessary efficiency in operations, another trend noted.
Security, ease of use, free and fastin that order, are the main factors that determine the choice of a payment method, recalls Minsait Payments, and the increase in risks and vulnerabilities is the biggest challenge facing the sector in the next five years, according to half of the agents surveyed. The study therefore emphasizes increasing values such as security and opens up opportunities for cloud services or the use of artificial intelligence in fraud prevention.
Likewise, the report also includes efforts by regions such as Europe to digitize cash and promote central bank digital currencies, which could modernize and eliminate many of the frictions and inefficiencies that still characterize cross-border payments today: expensive, opaque and slow compared to theirs domestic counterparts. The European continent plans to have its digital euro before 2030, and although there are very few central banks that have issued their own digital currencies (the so-called CBDCs), and none of them European, 33% of industry representatives participate in the report believes that CBDCs will play a complementary role to physical currencies over the next decade.
An opportunity scenario in which trends such as open finance advance, but under the condition of many restrictions that still exist. According to analysts surveyed in the Minsait Payments Report, open finance will have to wait until 2030 to become a real standard in the financial market, both in Europe and Latin America. Already today, multibanking in Latin America is already a higher level than in Europe, where the proportion of people with more than one bank account does not reach 50% anyway (35% in the case of Spain).
