Payments Snapshot in Spain: Coronavirus (COVID-19) Sector Impact

Payments Snapshot in Spain: Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

On March 17, 2020 the Spanish government announced a stimulus package worth €200bn ($224.5bn) - equivalent to a fifth of Spain’s GDP. The package includes €100bn ($112.3bn) of guarantees for business loans and €17bn ($19.1bn) of direct aid to companies. The government has also earmarked €30m ($33.7m) for research on developing a Coronavirus vaccine.

In addition, the government is also offering tax deferrals for six months for SMEs with annual turnover of less than €6.0m ($6.7m) in 2019. However, a cap of €30,000 ($33,681.02) was set on the total amount that can be deferred.

This report focuses on the impact of the Coronavirus outbreak on both the economyand the cards and payments industry in Spain. Based on our proprietary datasets, the snapshotprovides a detailed comparison between pre-COVID-19 forecasts andrevised forecasts of total payment card, debit card, and credit and charge card transactions by value and volume. It also offers information on measures taken by the government to combat Coronavirus.

Scope

- The Spanish economy is heavily reliant on tourism, which represented 12% of the country’s GDP and 13% of employment as of the end of 2019. The steep dive in consumer spending in sectors including travel and tourism, accommodation, and food and drink will impact the payments industry.
- Cash has traditionally been a popular instrument for consumer payments in Spain, accounting for over 60% of total transaction volume. However, cash payments are set to decline, with banks and merchants urging customers to use non-cash payment methods to help contain the spread of the virus.
- When shopping in-store, consumers are likely to shift from low-value cash payments to contactless cards. In light of COVID-19, starting from March 20, 2020, Spanish banks temporarily increased the contactless payment limit from €20 ($22.45) to €50 ($56.14).

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the Spanish payment industry.
- Understand the key market trends, challenges, and opportunities in the Spanish cards and payments industry.
- Receive a comprehensive insight into payments market in Spain.