Towards a new chapter in the use of electronic payments in Portugal

Banco de Portugal presented in the spring of 2022 its activity report on payment systems. The document, which covers the 2021 financial year, observes the strong growth of retail payments in the country, with EUR 3.1 billion in transactions, an all-time record for Portugal. In addition to this reality, Portuguese actor SIBS registers this year a strong development in the use of the wallet MB Way, that testifies to the development of electronic payments in the country, in the post COVID-19 context.

A new chapter seems to be lived by Portuguese payments ecosystem since the post pandemic crisis. Thus, according to Banco de Portugal, payments made through the interbank clearing system increased by 13.7% in volume and 12.5% in value compared to 2020, reflecting the economic recovery in the post-pandemic context. 

Transactions carried out with a payment card, direct debit, or credit transfer (including instant payment), increased by 13.9% in volume and 14.4% in value and represented, in 2021, 99.5% of total payments. These figures represent a strong development for a country that has been working for many years on the digital transformation of its society. 

The case of MB Way testifies to this situation. Thus, whereas its creation was in 2015, its development in terms of uses is very recent and has been boosted by the COVID-19 crisis. The strategic partnerships between SIBS and some key retailers of the country, like Lidl, to promote the use of MB Way in stores during the pandemics, the possibility to manage the wallet through the ATM of the country represent examples in this case, while the strategy contributed to boost the adoption of this wallet, which became a strong tool in the daily lives of Portuguese consumers.

The success of MB Way

According to SIBS, in April 2022, MB Way reached its best month ever, registering more than 28 million transactions, of which over 42% were purchases in physical and online stores. SIBS reached 4 million users on MB Way in the spring of 2021. This national solution of mobile wallet has more than 6.6 million registered debit, credit, and meal cards, and is currently available at about 400 thousand payment terminals, through QR code MB Way or NFC technology. SIBS indicates that ’this is another important milestone in the history of the company that reflects the relevance of the service in the daily lives of the Portuguese and is proof that [SIBS] is contributing in the best way to an increasingly digitalized and cashless society’. 

But the wallet MB Way is not the only booster of electronic payments in Portugal. According to the regulator, the payment card seems to be the preferred tool of consumers in the country. Thus, it represents 86.5% of the total number of operations (26% in value). Transactions with a payment card increased by 15.2% in volume and 15.3% in value in the period.

Portugal: the 7th most active country on TIPS

Nevertheless, the strongest growth recorded over the year concerned instant payment: +28.1% in volume and +49.6% in value, even if its share seems tiny in total operations. Direct debits increased by 2.6% in volume to 11.1% in value, while credit transfers increased by 8.6% in volume and 13.5% in value. 

Among the other main trends regarding payments in Portugal, we can include:

• The success of contactless payments: a 102.2% increase in volume and 130.9% in value;

• The development of purchases on the Internet (with payment card): 47.1% boost in volume and 51.8% in value;

• The increase in instant payments sent and received from other European countries: the first year of activity of the Portuguese payments ecosystem on the Target Instant Payment Settlement (TIPS) platform is, thus, marked by 780 thousand transactions sent and received for a total amount of EUR 1.1 billion, making the country the seventh most active country on TIPS.

Regarding the national strategy of payment methods, Banco de Portugal welcomes the achievement, in 2021, of 43% of the planned actions. It is important to recall that the strategic plan of the Portuguese ‘Forum para os sistemas de pagamento’ for 2020-2022 is composed of four pillars: the promotion of information in the society, the development of the benefits of digital transformation, the contribution to a stronger regulatory framework ensuring innovation and efficiency, and the promotion of the adoption of more secure means of payment. 

Added to this is the initiation of work on the digital euro. Thus, the Portuguese regulator wants to contribute to the works of the European Central Bank (ECB) by 2023.

About Andréa Toucinho

Expert in payments and financial services, Andréa Toucinho is Director of Studies, Prospective and Training of Partelya Consulting and Country Ambassador for France of European Women Payments Network (EWPN). France Representative of Aefi Spain and Afip Portugal, she realised several publications about payments and is one of the co-authors of The PAYTech Book published in January of 2020 by Wiley. Considered as one of the 50 leaders of the industry by Harrington Starr, she regularly participates in European and international events about payments and innovative financial services (MPE, MoneyLive, Web Summit, Africa Pay ID Expo) and organises events and trainings about payments at a French and European level.