The orange tree-lined streets of Spain are bursting and sputtering with contrast. Clusters of old men huddle noisily around café tables, breakfasting on bitter coffee and crunchy toast slathered with tomato. Their sharp coughs, barks of laughter and explosions of debate ricochet down the road, like bees in tin cans. One step away but a world apart, estate agents, digital nomads and local entrepreneurs rush into neighbourhood hotspots to pick up their morning paper cup of matcha chai latte.
A cartoonish shopkeeper bounces on his toes outside his family-run mattress shop. Frowning green grocers stack boxes groaning with fruit, opposite tobacconists sharing a joke with delivery service workers. The tills at the supermarket Mercadona beep, beep, beep while mulleted students anxiously await the price.
Spain is a wild salsa of looks, ages, ideologies and life experiences. The clash of old and new is everywhere, from Franco-survivors to first-time-away-from-home students. The only thing they all have in common? Cash.
Two in three (65%) Spaniards use cash every day. There are no “contactless only” signs in sight. And the greater the price, the greater the likelihood. A quick lunch for two? Pah… Maybe card payment. Catering for a 400-person wedding? Watch them slap down thick wads of paper notes on the table, like fish at the fishmongers.
As a socialist country that relies so heavily on cash, Spain is surely ripe for a zingy fintech revolution. Promisingly, the market is growing at a double-digit CAGR of 15%.
However, on the other hand, as a socialist country that relies so heavily on cash, Spain of course wants nothing to do with any fintech revolution. No, gracias.
They like to keep things the way they are. The way they have always been. The way that works. This is a nation that has seen banks collapse around them, from uncles in Argentina to cousins in Greece. They want no part of it.
The sentiment applies to investing too. Four in five (85%) own their homes outright, and one in six (14%) keep a second property. Families in Andalucia frequently own two or three houses … but not a single stock or bond. Several properties = yes. Gold cufflinks, rings and coins = yes, yes, yes. Managed investment portfolio = por dios, no.
Despite the national side-eyeing of financial services, the Spanish simply adore tech. Almost two in three (72%) say digitisation is making their lives easier. From 5G coverage to digital education, the country is smashing it out. In the words of one EU report, “Spain’s digital infrastructure is generally more advanced than the EU average”. Even grandmas have heaters built into their dining tables.
The environment is awkward for fintech. Spain’s deep love for tech, is soured by a deeper distrust of financial services. The juxtaposition is perhaps best illustrated with one of the nation’s most popular payment schemes, Bizum. Used by a whooping 30 million people and counting, it’s the digital equivalent of cash. There are no IBANs. No bank details needed. A shroud of anonymity is maintained. All you need is a phone number and the rest is instant. It’s as common as paying by card, maybe more. And used often between friends.
The success of Bizum could hold the secret to unlocking fintech success in Spain: Cut out the bank. Slice it away like orange peel and fling it in the bin. The less association, the better. Embedded finance could thrive.
Interestingly, the mistrust of traditional financial services and love of technology manifests itself in another unique way too… As of 2024, Spain is the 25th country in the world for crypto adoption.
Millennial men (around 38 years old) seem especially prone to funnelling savings – €3,100 on average – into online trading sites, amassing Bitcoins, stablecoin and even NFTs with gusto. They believe in their own ability.
While this may seem like a far cry from the cautious “property and precious metals” inflation-wary stye of their parents, its two sides of the same animal: a mistrust of traditional financial services. They would rather freestyle with DeFi.
One bank – that is not considered to be a bank – has been embraced with open arms, Revolut. You’ll see that purplish card peeking out of every wallet, especially for the parents of grown-up children working abroad.
Youth unemployment is high at around 25%, and so moving abroad to work is commonplace. Parents pack arctic-ready coats and venture like penguins into cities like Zurich, Berlin, Paris and London to visit their kids … and they don’t trust the banks to give a fair exchange rate. Unsurprisingly, Revolut is now the fourth-largest financial entity in Spain, surpassing incumbents like Banc Sabadell and ING in market penetration. It’s a non-bank that offers cheap exchange rates and discounts. A triple threat.
The irony is that Revolut isn’t just a bank, it’s a British bank. A recipe for unchartered unpopularity. But shhh… let’s keep it quiet.
As the huddles of old men move from the breakfast table to the bar, trendy coffee joints shutter down and the grocers stack empty fruit boxes, Spain continues to move in its unique journey. Somehow it leapfrogged over the transition from cash to card to contactless … and went straight to Revolut, Bizum and crypto. Millennial men glance at the latest stablecoin fluctuations, as their fathers ping an elastic band over a thick stack of notes. Retired parents step of airplanes in freezing cold countries and feel around for the last time to check they definitely remembered their Revolut card. It’s a juicy inflection point for Spain, bursting with potential. A contrast so full of heat, it had to be Spanish.
