The Spanish card payments market is expected to register robust growth of 11.4% in 2022 supported by strong economic recovery and rising consumer spending, says GlobalData.

The leading data and analytics company predicts that Spain’s total card payments value is forecast to register a compound annual growth rate (CAGR) of 8.8% between 2021 and 2025 to reach €321.4 billion ($393 billion) in 2025.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “While cash remains the most preferred method of payment in Spain, the use of payment cards has grown during the past few years, supported by government initiatives to increase financial awareness among citizens, and efforts by banks to promote electronic payments. 2020 was a difficult year for many sectors and card payments were no exception. However, with the economy bouncing back and consumer spending rising, the Spanish payment card market is expected to grow at a continuous pace.”

The economic uncertainty caused by COVID-19 has forced consumers to cut down on unnecessary spending, which in turn has affected the card payments market, especially the credit and charge card market which registered a decline of 6.3% in 2020. The debit card market, on the other hand, remained resilient and registered a growth of 4.8%. The pandemic was forcing consumers to spend judiciously, thereby increasing the frequency of debit card payments compared to other payment cards.

With the COVID-19 restrictions now eased and consumer spending on the rise, both debit and credit cards are expected to grow at a fast pace. GlobalData’s Payment Cards Analytics reveals that debit card payments are set to register a CAGR of 9.9% between 2021 and 2025, while credit and charge cards will grow at a CAGR of 6.8% during the same period.

Sharma adds: “The growing acceptance of payment cards by retailers and the rising adoption of contactless technology are also anticipated to push card payments and thereby reduce the cash dependence within the economy over the coming years.”

To push contactless adoption, the contactless payment limit in the country was increased from €20 ($24.46) to €50 ($61.14). Also, to expand its usage for transit, in September 2021, The Ministry of Transport and Renfe in support from Mastercard and Santander announced the launch of the Cronos project, to install POS terminals in Cercanías train stations that enable travelers to make contactless payments via cards and mobile devices to purchase tickets.

Sharma concludes: “The Spanish card payments market, which was affected by COVID-19, is forecasted to register an impressive growth with a rise in economic activities and consumer spending.”