Portugal

Payment landscape in Portugal

Following the economic recession, demand for e-commerce is slowly starting to grow once more. With a population of around 10 million, Portugal bought an estimate 5 billion USD worth of product online. In the next 5 years, the market is expected to grow at 21% per year. Toys, hobbies and DIY are especially popular market sectors for online shopping at a volume of approximately 624 million euro in 2016.

After the crisis

The last economic crisis modified deeply Portugal’s payment landscape. Despite the government efforts to reduce tax evasion and credit cards companies’ products and services improvement, cash maintain its predominance. This can be largely attributed to the large volume of micropayments and the extent of the parallel economy. New legislations reduced the interchange fees in the European Union to 0.2% for debit cards and 0.3% for credit cards. While this had no impact on consumer prices, it contributed to increase the number of transactions, as well as merchant acceptance. Another consequence of the crisis, the banks Banco Português de Negócios, Banco Privado Português, Banco Espírito Santo and Banco Internacional do Funchal disappeared from the market.

Preferred e-commerce payment method - Debit card

Debit cards are the most popular method of payment as 52% of all Portuguese online transactions are paid using them, while only 13% comes through credit cards. Other popular payment methods are pay on delivery, prepay, postpay and bank transfer. In short, Portuguese customers prefer to avoid using credit to buy.

Cross-border commerce

One in five international e-commerce transactions are made on Spanish websites. Dealers who want to tap into the Portuguese market should consider supporting the Spanish language.

Perspectives for the future

The number of cards on the market and the value of the transactions made are both expected to grow in the upcoming years. As more and more Portuguese acquire a bank account and gain access to the Internet, e-commerce should also be growing considerably, with a predicted compounded annual growth rate of 10% until 2020. Contactless technology should know a boom, notably through the “Caixa Change” and “m.card” projects from Caixa Geral de Depósitos.

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