The payments ecosystem is one of the areas that has benefited most from the financial innovation led by banks. Competition in the sector, including from non-bank financial institutions, enriches it. And the new European PSD2 regulation reaffirms all of the above while also strengthening security. But ultimately, it is the customer who decides how to make the payment.
The customer is at the heart of banks’ strategy. And anticipating their demands, whenever technology allows, is their obligation. Banks have developed fast and efficient payment systems, within a regulatory context that facilitates the creation of new services with greater added value for the customer. The extensive availability of services contrasts with the reality of the figures, which continue to show a strong user preference for cash payments.
A few days ago, we learned the statistics for ATMs and point-of-sale terminals from last year. According to these data published by the Bank of Spain, cash withdrawals at ATMs increased by 3.6% in 2017, while the value of payments made through point-of-sale terminals grew by 8.7%. It is true that the total value of payments at terminals exceeded cash withdrawals, but the difference was not so significant. This is a good indicator of the habit that still exists in Spain of paying in cash. In fact, not only in Spain.
A study published by the European Central Bank (ECB) at the end of last year indicated that nearly 80% of transactions in Europe were paid in cash, although this fell to 54% if we consider their value. This clearly contradicts the results of the same survey accompanying the study, in which consumers acknowledged their preference for using payment cards over cash. But there is an explanation: consumers remember the amounts of larger payments, while overlooking the small outlays they make day to day. According to ECB figures, only 8% of payment transactions exceed 50 euros.
The previous ECB study referred to data from 2016. Undoubtedly, changes will have occurred since then, with many users now placing greater value on the different payment options offered by credit institutions. Digital payments, mobile payments such as Bizum in Spain, and card payments. A whole world of possibilities, with the assurance of security when they are offered by banks. However, all the effort made by credit institutions in the evolution of payment methods does not mean they do not listen to their customers. Last year in Spain, the number of point-of-sale terminals increased by 5.74%, but the number of ATMs also grew by 1.76%. As for cards issued, issuance increased by 6.4%.
The growing and widespread penetration of the internet and the use of mobile devices in society point to significant changes in the payments ecosystem. However, customer experience will be the key factor in the future in determining their preference for one payment method or another. The role of banks is to offer all possible payment options, investing in their development so that customers can benefit from the opportunities they provide.
José Luis Martínez Campuzano, spokesperson for the Spanish Banking Association
