Portugal – AN INTRODUCTION
With almost nine hundred years of history, Portugal is one of the oldest countries in the world. Geographically situated on Europe’s west coast, on the Iberian Peninsula, it borders Spain to the north and east, and the Atlantic Ocean to the west and south. It also includes the Autonomous Regions of the Azores and Madeira, two archipelagos located in the Atlantic Ocean.Data from 2020 indicates that Portugal has a population of approximately 10.3 million, with about 47% of that population considered to be working. The Portuguese language is spoken by more than 220 million people, spread over almost every continent.
Maestro is a debit product within the Mastercard offering. Maestro cards can be used for payments in stores and to withdraw cash from ATMs. This payment method requires electronic online authorization for almost all transactions, although Mastercard’s rules allow minimum limits to be set only for Maestro EMV chip transactions.The indications to date are that electronic wallets will be the future. These will replace physical wallets by paying for purchases using smartphones.
Apple Pay through its NFC (Near Field Communication) payment system allows information such as credit or debit card details to be extracted by the application, allowing payment through the phone.Samsung has Samsung Pay whose operation is similar to Apple Pay and which has the additional advantage of offering rewards for daily purchases.
Payment instruments allow moving funds from a payment account or electronic money. Over the past few years, there has been a significant change in payment habits in Portugal: electronic payment instruments have gained importance (cards, direct debits and credit transfers) and checks, on the contrary, have significantly decreased. Structure of use of payment instruments in 2021.
The provision of payment services to bank customers is regulated by the Legal Framework for Payment Services and Electronic Money, set out in Decreto-Lei No. 91/2018 of 12 November. This transposes into national law Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November on payment services in the internal market (revised Payment Services Directive – PSD2), excluding payment transactions made by cheque (regulated by a separate regime) and cash (notes and coins).The legal framework for payment services and electronic money regulates access to the provision of these services and the exercise of the activity of payment service providers. It also establishes pre-contractual and post-contractual information duties and the rules governing the contractual rights and obligations of users and payment service providers.According to the latest information, 85% of the Portuguese population, more than 8 million people, use the Internet and 71% of the Portuguese make purchases online. A market study prepared by CTT, e-Commerce 2021, reveals that in 2020 the Portuguese spent about 4.4 billion euros on online purchases, with the average annual spending per e-buyer on online purchases reaching 998 €.
More numbers that prove that the e-commerce panorama in Portugal is very positive:
• The e-commerce usage rate registered a growth of 5.2% in 2021, compared to 2020;
• It is estimated that the number of e-commerce users in Portugal will grow by 7% to 6 million users by 2025;
• It is also expected that by 2025 the market volume will reach 7.72 billion euros. The e-commerce market potential in Portugal is quite significant and to maximize your online store and reach more consumers, it is important to know the best online payment methods available in the country.
WHICH CARD PAYMENTS ARE COMMON IN PORTUGAL?
Card penetration is high in Portugal, thanks to a chip-and-password culture that dates back 30 years. The country has 29 million debit and credit cards in circulation, corresponding to 2,29 number of cards per capita, accounting for 83% of transactions.The most popular payment method is the MultiBanco, a local debit card. This is a post-paid option, where a reference is generated at checkout and then paid through an ATM with a debit card or via online banking. Covid-19 has made a significant impact on e-commerce spending in Portugal. More than 50% of the population shopped online in 2020, with sectors such as supermarkets, retail and media benefiting from the largest increase. Credit card payments require the use of a company accredited for this purpose. These include EasyPay, Stripe or HiPay, with fees/commission varying depending on the provider. The most popular card networks are Visa and Mastercard for credit and VisaElectron and Maestro for debits.
In our country there has been a growing use of the 3D-Secure service, which allows payment by entering a unique usage code sent by SMS to the cardholder’s phone.
Top banks
Currently, there are 29 banks registered in Portugal. The five largest banks account for 80% of total assets and the seven largest account for up to 88% of total assets in the entire Portuguese banking sector.Caixa Geral de Depósitos (CGD), still owned by the state, is the largest player. It is followed by Millennium BCP, Santander Totta, Novo Banco and Banco BPI. Montepio is in 6th place and also has more than 10 billion in assets. All other banks have total assets below 10 billion.Looking at individual segments, CGD continues to lead the individual segment in terms of deposits and loans in this sector. However, some banks, especially Santander, are beginning to challenge CGD’s market leadership position. Novo Banco, Millennium BCP and Santander all have more outstanding loans to companies and the public sector than CGD. The chart shows the ranking of the largest Portuguese banks by assets in 2019, with the top 5 banks accounting for approximately 80% of all assets.
Novo Banco
Novobanco is the 4th largest bank operating in the national market, with 1.6 million customers, assets of 43.5 billion euros and a 9.8% market share in 2023. We have an omnichannel customer relationship model, with a complete and convenient banking experience, including secure digital channels, complemented by the recent and innovative proximity distribution model, with more than 292 branches and 20 company centers, covering the entire country. . With the most robust capital ratios, we have reinforced our market share in deposits and customer resources, which reach more than 34.5 billion euros, while guaranteeing the financing of the national economy, with support for families and companies, with more than 25.5 billion euros in credit granted. We value the training of our more than 4,200 professionals and support the community through social, cultural and financial inclusion programs. Our purpose is to contribute to the economic growth of Portugal, both for families and companies at all stages of their lives, in a sustainable and responsible way. Novobanco delivered strong results with record net income of €743mn and annual capital generation for the full year 2023, reflecting the continued growth of our banking businesses and confirming the sustainability and resilience of our capital accretive business model.
Millennium BCP
Millennium bcp group has over 30 years of history. It started operating in 1985 and became a history of success, benefiting from the opening and development of the Portuguese financial system. In the last three decades, we have been serving our Clients, individuals and companies, supporting their projects and presenting them with solutions adapted to their needs, innovating in our products and services in order to anticipate the market trends. According to latest financial reports the company's current revenue is $4.12 Billion.
Banco BPI
BPI's identity is influenced by the financial and corporate culture of Banco Português de Investimento. The essential features of such a culture include managerial independence, organisational flexibility, teamwork, merit recognition, the ability to anticipate, rigorous risk management and secure value creation. The adequate profitability of the Bank, through the best management and service practices, is an essential purpose of our activity. The protection of the interests of our Customers, with dedication, loyalty and secrecy, is one of the first principles of business ethics and the rules of conduct of the Bank's Employees.
Santander Totta
As a global leader in financial services, we're transforming businesses and empowering communities with product, services, and contributions, but more importantly, we're enriching the lives of our clients. See the work we've done and how we're building a better world for everyone around us. Santander Totta is a bank in the Portuguese financial sector, with a broad customer base and over 600 branches spread across the country. Grupo Santander's presence in Portugal dates back to 1988, the year it purchased a stake of about 10% in Banco do Comércio e Indústria (BCI). Banco Santander, S.A revenue for the twelve months ending March 31, 2024 was $134.860B, a 35.7% increase year-over-year. Banco Santander, S.A annual revenue for 2023 was $129.242B, a 44.44% increase from 2022.
Top payment methods
Maestro
Maestro is a debit product within the Mastercard offering. Maestrocards can be used for payments in stores and to withdraw cash fromATMs. This payment method requires electronic online authorizationfor almost all transactions, although Mastercard's rules allowminimum limits to be set only for Maestro EMV chip transactions.
Mastercard
As one of the largest card brands in the world, Mastercard dominatesthe co-branded card market in Europe. It is also the leader incountries like Austria, Brazil, Canada, Colombia, Germany, Hungary, Venezuela, and in the Benelux among others.
Paypal
Paypal is one of the market leaders in online payment solutions with more than 400 million active customers worldwide, available in 200 countries and in more than 100 different currencies. As faras online shopping payment is concerned, it is the one of the mostused payment method in France.
Multibanco
One of the most popular methods in Portugal is Multibanco, which belongs to SIBS, a company internationally recognized as one of the largest payment processors in Europe and Africa. Multibanco (MB) goes beyond an ATM machine. It has an EFTPOS network known as Multibanco Automatic Payment and also provides mobile payment services such as MB Way and Mbnet. Multibanco references are a payment method that allows consumers to pay for their purchases both at ATMs and on the websites or applications of Portuguese banks. These references are usually generated on the merchant’s website at the time of purchase, or are later sent via e-mail or message, usually SMS, to the customer. Because it is a simple and secure solution, it is among the most used means of payment in online shopping by the Portuguese. A payment voucher for Multibanco includes a payment reference, an entity number, the payable amount and the expiry date of the voucher.
MB WAY
MB WAY is the first interbank solution that allows immediate payments and transfers via smartphone or tablet. Signing up for this service is quite simple and can be done at the ATM or via the app. Simply associate a card (debit or credit) to your cell phone number and define a 6-digit PIN to use the service. MB WAY offers a wide variety of services, allowing you to generate virtual MB NET cards, pay for purchases both in physical stores and online stores, send money to other users, and even withdraw money at the ATM without using your bank card. To make online payments with MB WAY, the buyer just needs to enter his or her cell phone number at the online store and immediately receives a request in the application to authorize the payment. MB WAY is a Multibanco solution.The popularity of virtual credit cards has been growing in Portugal. From 2020 to 2021, the use of this payment method grew to 22.4%. The possibility of not using your bank information when paying seems to please users who choose to create temporary virtual cards to make their purchases. Most customers prefer to use the MB NET service, because it allows them to generate virtual cards with a certain amount and define whether it is for a single purchase or for several purchases. These cards can be generated on the MB NET website or on the websites of some Portuguese banks. The debit on the card can be immediate (most common), or an authorization may be required (the amount is retained) and the value is withdrawn later.
Payshop
Payshop is a Portuguese payment solution that allows online payment by visiting a PayShop agent with a reference. These can be gas stations, supermarkets, stationery stores, tobacco stores, etc. The service has available a network of about 6800 points, of which 4400 PayShop agents.
Visa
Visa is the world's largest global card network by transaction value, ubiquitous worldwide. Visa positions itself as "the best way to pay and get paid by everyone".
Apple Pay
Apple Pay through its NFC (Near Field Communication) payment system allows information such as credit or debit card details to be extracted by the application, allowing payment through the phone. Samsung has Samsung Pay whose operation is similar to Apple Pay and which has the additional advantage of offering rewards for daily purchases.
Concluding remarks
In Portugal, payment habits are quite similar to those in other developed countries. More precisely, cash, debit cards and credit cards are all widely accepted forms of payment. Additionally, mobile payments and contactless payments are becoming increasingly popular. Below, we explain some particularities in relation to each of the referred payment methods:
Cash
While the use of cash has been declining in Sweden, it is still accepted in many places,especially for small transactions. However, it's worth noting that some businesses, particularly inlarger cities, have transitioned to cashless operations.
Debit and Credit Cards
Debit and credit cards, such as Visa and Mastercard, are widely accepted inSweden. They can be used for both in-person and online transactions. Contactless payments withcards and mobile devices are also popular in the country.
Mobile Payment Apps
here are several mobile payment apps available in Sweden, such as Klarna,MobilePay, and SEQR. These apps enable users to make payments, split bills, and transfer moneyusing their smartphones. Bankgiro and Plusgiro – Bankgiro and Plusgiro are payment systems commonly used by businessesand organizations in Sweden. They allow companies to receive payments from customers throughbank transfers or giro payments.
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