Multibanco is usually cited as one of the main Portuguese success stories, due to the capacity to create a transaction collection and payment network, and in recent years the evolution was significant, as highlighted by Madalena Cascais Tomé, SIBS Executive panel Strategies to accelerate the Digital Economy, of the Portugal Digital Summit conference that is taking place in Lisbon.
But despite this development, cash payments still carry a very significant weight, accounting for 70% of payments in Portugal, well above the European average of 49%. "It's mainly small transactions, below 20 euros," explains Madalena Tomé, noting that the social costs are still high and shared by all stakeholders in the economy.
According to the SIBS accounts, these payments cost € 1.6 billion, representing 1% of GDP. And there are also the unmeasured costs of informality, which are very important. According to the data presented, in Portugal about 20% of GDP, 40 billion euros, is linked to this informal economy, or shadow economy.
The introduction of new tools is helping to change processes and ensure more use of digital payments, and Portugal has one of the largest penetration of POS (POS with electronic payment) in Europe. As Madalena Tomé explains, when there is availability there is a clear preference for this form of payment.
And how to make the transition to a market where most transactions are already digital? The chairman of SIBS's executive committee says that this is not a technological but usability issue. One of the good examples mentioned by Madalena Tomé is that of MBWay, which is close to reaching one million users and one million transactions per month. "65% are below 20 euros, where is the resilience of the use of money," explains the executive who says that this application is transforming habits of money transfer between people, especially among young people, and has been proving in use cases to their usefulness.
In e-commerce digital payments are winning POSs and in 2017/18 represent 41% of transactions, when in 2015 they only represented 29%. Still the percentage of online purchases is only 4% of the total retail, when in Europe it rises to 9% and is expected to reach 14% in 2022.
The trend is now to promote digital payment options with open APIs, services and partnerships, something that SIBS is betting on and can help develop new use cases, says Madalena Tomé.