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Mobile banking 21 Apr 2015

The development of mobile payments in Spain

A year ago, Estanis Martín de Nicolás, general manager of PayPal Spain and Portugal, said that “the business of mobile payments is rapidly expanding all around the world and is increasingly present in the Spanish purchasing processes”.

A month ago, MasterCard presented a study of new payment methods being developed for both physical stores and the internet. This study is called ‘Barometer of New Payment Methods’. The study concludes, for example, that approximately 22% of Spanish consumers make payments using their mobile phone. Restricting this to mobile payments made in physical stores, we find the option used by 6.2% of consumers, indicating a progressive rise in this payment method.

However, the majority of mobile payments made in Spain (up to 92.6% of them) are for online purchases (using a browser or apps). Almost half of people in Spain make such transaction at least once a month, a high figure undoubtedly due to the high penetration of smartphones in Spain. In addition, before making a purchase, 85.7% of consumers look for information online via forums and social networks.

24% of users make payments using a digital wallet: one of the main advantages of this solution is that it can be used on any device, anywhere, and so it homogenizes the user experience. Payment via P2P applications is also expanding (5.4% of Spanish people now use them.

In the words of Paloma Real, director of MasterCard Business Development and Innovation Spain, what the study prepared by her company shows is “a clear surge in the use of new technology and mobile devices in all phases of the purchase process, from the start to payment, in both the physical and the digital worlds […]. It is key for technology to allows consumers to pay with any device, wherever they are, in a way that is simple and transparent to all.”

Problems with implementing NFC technology

After a period of technology, such as BIDI and RFID, being at the forefront of mobile payments, we are now at the start of the reign of NFC.. But the truth us that its implementation is going more slowly than analysts predicted a couple of years ago, and the value of transactions made through it is only 25% of the forecast (10,000 against 40,000 million dollars).

The low availability of mobile terminals equipped with NFC technology, coupled with competition from ‘contactless’ cards (their simplicity has led to 10.2% of Spanish users making purchases with them in physical stores), have been the main causes of development of mobile payment technologies in Spain remaining at an early stage. Among those surveyed, almost half (46%) stated that if a payment solution using their mobile were available they would use it, although almost one third of them would only do so for payments of low amounts (in fact, they consider a solution especially useful in cases such as payments for parking or public transport).

This data, taken mainly from the report ‘ ‘2014 Mobile consumption in Spain: Revolution and evolution’‘ (PDF) leads those responsible for it, the Deloitte company, to conclude that “mobile payments are at an early stage and mobile operators still have the chance to capture this market. However, they have to take into account that for many users payments via mobile have no advantage over contactless cards, and many may wait to start using them until they have clear benefits”.

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