* The views expressed in this article are solely those of the author and should not be attributed to the European Payments Council.
Strategically positioned between Europe, Africa and America, Portugal has an attractive and modern financial system. The Portuguese carry the least cash of all European citizens and use debit cards frequently. So what makes the Portuguese payments landscape exceptional? We interviewed Leonor Machado, general manager at Caixa Geral de Depósitos to find out more about payment habits in Portugal. Our infographic summarises all you need to know about the Portuguese payment landscape.
In Portugal, use of electronic payment instruments (cards, direct debits and credit transfers) has grown significantly in recent years. How do you explain these changing payment habits?
Use of electronic payments instruments has certainly been growing since they replaced the earlier means of payments, namely the cheque, which had a strong usage in Portugal in the past. 'Multibanco' (the Portuguese scheme) played an important role because it was, from the beginning, transversal to all banks. The system was the same to all customers.
And, recently, the public administration gave a significant boost to electronic means of payment in particular when pensions began to be paid with credit transfers rather than cheques.
Debit cards clearly predominate (in terms of the number of payments) in Portugal. How do you explain this tendency? Are contactless card payments also popular in Portugal? This is increasingly the case elsewhere in Europe.
In Portugal, debit cards have been widely used for a long time because they have been in use online and in real time with PINs for more than 30 years. While the introduction of the PIN was an issue in Europe some 15 years ago, in Portugal it didn’t cause any disruption because it was already current practice. Working ‘online in real time’ ensures transparency and security, because the transaction is immediately reflected in the current account.
Contactless card payments are not that popular yet, but their utilisation is now growing every day and they are becoming as common as they are in the rest of Europe.
Sources: European Central Bank, 2016 statistics;
According to the European Central Bank, the average amount of cash that each Portuguese person carried in 2016 (29 euros) was the lowest of all the eurozone countries (average 63 euros). How would you explain this trend?
In addition to the fact that debit cards are very popular, ATMs (automated teller machines) are simple to access. The ATM network has huge coverage, so it's very easy to find one. They also offer a broad range of services beyond cash withdrawal, such as purchase of tickets for train services or tax payments. Plus, their usage is free of charge.
Customers do not need to carry a lot of money with them since they know they can pay by debit card or withdraw cash easily.
The majority of payment service providers ( ) plan to propose Instant Credit Transfer ( ) services to their customers within the next few years. What is the forecast for the development of instant payments in Portugal?
Instant payments are already possible in Portugal through a national scheme and they are already part of the offer of means of payment available to our clients.
The vast majority of Portuguese have formalised their adherence to the European scheme, which means that will soon be made available to customers in Portugal.
Finally, a broader question. How do you see Portugal’s payment landscape developing over the next five years?
New and ‘traditional’ means of payments are constantly growing in Portugal, even cash. From my perspective, we are going to continue to use all these means, and I hope that customers will have more information and a more global offering, so they can make the best and most rational choices when it comes to payments.
Infographic: The Portuguese payment landscape (August 2018)
(Click to enlarge and download)
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Leonor Machado
Leonor Machado is the chair of the Cash Working Group of the European Payments Council ( ) and general manager at Caixa Geral de Depósitos with responsibilities in the payments area. She has had a long career in the banking industry and gained experience in cards, marketing, retail and commercial areas. She is also the chair of the Single Euro Payments Area ( ) Portuguese group. With a background in economics, she worked in different areas such as international trade and cooperation and development before joining the banking sector.