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Spain: Cash Use, Acceptance, and Access

Categories : Cash is available to all users, Cash is easy to use, Cash is the most widely used payment instrument
November 6, 2023
Tags : Acceptance of cash, Access to cash, Cash, Digital payments, Spain
Cash is the most widely used and accepted payment instrument in Spain, according to a recent survey from the Banco de España. Very few people and retailers know about the digital euro.
Manuel A. Bautista-González

Ph.D. in U.S. History, Columbia University in the City of New York

Post-Doctoral Researcher in Global Correspondent Banking, 1870-2000 – Mexico and South America, University of Oxford

This post is also available in: Spanish

The Banco de España (BdE) has just released the results of its second survey on payment habits and the use of cash. The study sheds light on the use of and access to cash, adoption of cash alternatives, and awareness of other methods to get cash and the digital euro (BdE 2023: 3). Ipsos conducted 1,600 interviews with consumers and retailers: 1,350 to a representative sample and 250 to people and merchants in municipalities without a bank branch.

SPACE Insights on Cash in Spain

Per the European Central Bank’s (ECB) latest Study on the Payment Attitudes of Consumers in the Euro Area (SPACE) of December 2022,

Cash Use and Acceptance are High

Cash is consumers’ most used payment instrument, with 99% of those surveyed using it frequently, compared to 88% using cards and 23% using mobile devices such as smartphones and smartwatches (see Graph 1). Most (65%) use cash in everyday transactions, only 32% use cards, and 10% pay with mobile devices daily (BdE 2023: 8).

Graph 1. Spain: Use of Payment Instruments, 2022-2023

Notes: Dinero efectivo – cash, tarjetas – cards, dispositivos moviles – mobile devices, plataformas internet – internet platforms, transferencias – transfers, posee – owns, utiliza – uses, utiliza diariamente – uses daily, pagos realizados – made payments.
Source: BdE (2023: 8).

Cash is the payment instrument most accepted by retailers, followed by cards and mobile devices. All retailers reported receiving cash, while only 89% accept cards and 78% accept mobile devices (BdE 2023: 12). Fewer retailers in underbanked municipalities accept electronic payments, as 82% reported receiving cards, and 65% get mobile devices.

Consumers said they used cash due to ease of use (29.3%), habit (23.3%), budget management (17.3%), and security (8.1%); they valued cards as payment methods due to ease of use (71.8%), speed (11.6%), and security (7.9%). Mobile device users prefer them due to ease of use (73%) and speed (17.1%, BdE 2023: 9).

The perceived advantages of cash over its alternatives are protection against fraud and outages, budget management, privacy, and financial inclusion. Its main disadvantages are a sense of insecurity, difficulty or impossibility in making certain payments, and problems in obtaining them (BdE 2023: 34).

Graph 2. Spain: Daily Use of Payment Methods, 2022-2023

Notes: Dinero efectivo – cash, tarjetas – cards, dispositivos moviles – mobile devices, hombres – men, mujeres – women, años – years, est. básicos – primary education, est. medios – medium education, est. superiores – higher education.
Source: BdE (2023: 11).

Age and educational achievement are essential variables driving payment method use (BdE 2023: 11, see Graph 2):

Cash Access is Deteriorating

Most people obtain their cash from ATMs (74.5%), followed by bank counters (9.1%), their job, and personal transfers from relatives, friends, or colleagues (BdE 2023: 19). People in underbanked municipalities reported getting cash from ATMs at a lower rate (69.5%) while they go more often to bank branches (14.9%).

Nearly half of the retailers (45%) get cash at bank branches. The rest (54%) obtain cash mostly from their earnings or other retailers (BdE 2023: 21). Most retailers said €1 coins and €5 banknotes are the most difficult to find.

More people think cash withdrawal points are farther away than in 2022, especially in municipalities without bank branches (BdE 2023: 20). Most people have a cash withdrawal point (77%) and a bank branch (83%) within a kilometer (see Graph 3, panels A and B). The shares are lower for underbanked municipalities, where only 27% of people live within 1 km from a cash withdrawal point and 16% from a bank branch.

Graph 3. Spain: Distance from Cash Withdrawal Point and Bank Branches, 2022-2023

A) Cash Withdrawal Points

B) Bank Branches

Note: Blue – representative sample, red – underbanked municipalities.
Source: BdE (2023: 20).

A minority of consumers (22%) know about Correos Cash (a service enabling cash deposits and withdrawals from a bank account at postal offices as well as cash deliveries at home or to a third-party address), and even less  (14% cashback and cash-in-shop (BdE 2023: 24-25). Less than a quarter of retailers (24%) knew about Correos Cash, and a few (2%) offer cashback and cash-in shop services, although that share increases in underbanked municipalities (5%).

Half of the consumers (50%) and more than half of retailers (59%) said they had no difficulties obtaining cash from ATMs. The main problems reported concern service outages and lack of cash. Pluralities of citizens (45%) and retailers (45%) said there were no difficulties regarding cash services at bank branches. The main problems concern limited hours and high waiting times (BdE 2023: 28-29).

The Digital Euro

Awareness of the digital euro in Spain is still tiny. Only 20% of people and 23% of retailers know about the ECB’s digital euro project. A minority of those surveyed (20%) would use the digital euro as a complement to current means of payment. Most seniors (82%) said they would not use digital euros.

This post is also available in: Spanish