Banks In Spain - online, digital, and traditional banks
Digital transformation has affected all areas of our familiar life in the last few years. The banking sector is no exception. But is old Europe keeping up with these changes? Very revealing for the analysis of the European market will be the experience of Spain. On the one hand, this country with a traditionally southern mentality is considered to be quite sluggish in terms of changing services. On the other hand, Spanish banks are successfully expanding all over the world year after year.
Let’s take a look at how banking has changed over recent years in Spain and how you can make sure you always choose the right option for you, no matter what situation you find yourself in.
Mobile banking in Spain
Mobile banking will likely become a more widely used form of payment when it becomes an integral part of e-wallets or other forms of cashless payments. Although it seems as though people pay with cards more often than they do with cash, cash remains a widely accepted form of payment, accounting for 35% to 40% of all transactions in 2016.
Spanish consumers will likely begin favoring mobile wallets over cards if they can be used to make payments at bus stops, parking garages, gas stations, and other places where credit cards are not usually accepted. Some cities are currently testing out mobile payments by allowing passengers to pay their transportation fares using online-only banks.
E-wallets in Spain
E-wallets have gained popularity across Europe, with many traditional banks releasing their own apps for consumers to pay for goods and services digitally. In a world that’s quickly adopting electronic payments, e-wallets offer another way to complete transactions online or on mobile devices. For example, a person could open an account at Caixabank but still use its e-wallet service instead of visiting a physical bank. An added benefit of e-wallets is they require less personal information than credit cards or payment apps like Paypal, making them appealing to people who don’t want their data sold by other companies or potentially lost by third parties. E-wallet services also let users store money abroad securely—sometimes even outside of their home country.
Paypal is the most-used digital wallet in Spain; you can use it to buy goods, transfer money, and send payments. You can even use it to make person-to-person payments or transfer money internationally.
Bizum is a money transfer service available to anyone with a Spanish bank account and a mobile phone. You need only the recipient's phone number to send funds and they will receive a text message with a link to claim the funds. There are no fees for sending or receiving money with Bizum. Additionally, the Tax Agency will only investigate Bizum Payments if it exceeds €450. Also, you have to declare where this money came from.
What do you need to use Bizum?
You can use Bizum to send money to friends, family, and businesses in Spain. However, to make use of Bizum you need to have a bank account with a Spanish back that is connected to Bizum. The sender initiates the transfer and the recipient accepts it.
There are no fees to use Bizum and you can send up to €1,000 per day. You can also use Bizum to receive payments for goods and services online. To do this, you'll need the merchant's Bizum ID.
You can't use Bizum as a standalone app, so to register you'll need to do it through your mobile banking app. It may be possible through the mobile banking app you already have or via a different one offered by your bank specifically for quick mobile payments; when accessing it, you'll need to sign in with your regular login details and then choose which account you want to be linked with the Bizum service (you can only have one account at a time, but you're able to change this later on). Some of the banks connected to Bizum include: Caixabank, BBVA, Santander, Caja Rural and many more.
An e-wallet from Caixabank that lets users make transfers, receive salaries, and pay bills electronically; it works like cash with over 30 million locations accepting it across Europe.
Traditional Bancos & Cajas In Spain
Before we jump into the different types of banks in Spain. We first have to explain the difference between bancos and cajas. If you are already familiar with these local terminologies, you can skip to the traditional banks below. In short, savings banks (cajas) are considered non-profit entities, while the cajas rurales or rural savings banks function to provide financial services in rural areas; whereas banks (or bancos) are for-profit entities that distribute profit among shareholders and invest where they please. However, many modern versions of cajas do not still have this non-profit structure but still keep the name such as Unicaja, Caja Rural, and others.
Here are some of the best traditional banks in Spain:
Santander is a leading international bank based in Spain. The banking group operates throughout Europe, Latin America, North America, and Asia. It's one of the top 20 companies on the Forbes Global 2000 list and has an A+ credit rating from Moody's Investor Services. The Bank has over 194 million customers worldwide through its four business segments: Domestic Markets & International Banking; Consumer Banking; Small Business Banking; and Large Corporates & institutions.
Bank Internacional de España S.A., also known as BBVA, is a multinational Spanish banking group. Founded in 1857 by Tomás Bó y Prat and headquartered in Bilbao, the bank has been led by José María Amusategui since 2010.
Called initially La Caixa until 2003, is a Catalan savings bank and Spain’s third largest bank by total assets. CAIXABANK was founded in Barcelona in 1880 under the name La Caja de Ahorros y Monte Piedad de Barcelona (The Savings Box and Mont-de-Piété of Barcelona).
Banco de Sabadell, S.A., is one of the largest Spanish banking groups. With headquarters in Alicante and Barcelona - they are now ranked 4th on the list of largest banks in Spain. Banco de Sabadell offers many different types of businesses, services, and products to meet customer needs worldwide. From bank account opening, investments, and loans to car insurance.
Unicaja is a Spanish savings bank based in Málaga and chartered as a Caja de ahorros (analogue of English saving banks), offering retail banking services. The bank's full name comes from the names of all the merged entities - Monte de Piedad y Caja de Ahorros de Ronda, Cádiz, Almería, Málaga y Antequera - and its own Mount of Piety structure. They operate with more than 400 branches throughout Spain with total assets exceeding 24 billion euros.
Challenger banks in Spain
The biggest trend affecting banks in Spain is, by far, fintech startups, or as they are also known neobanks. Many of these new startups are changing not only how Spaniard banks but also how they pay for goods and services. In 2022, it is predicted that electronic money will be a reality and integrated into our lives. We will never have to visit a bank again! Banks across Spain are trying hard to innovate and maintain their relevance as younger generations seek new ways to manage their finances.
Some of the most popular neobanks in pain include:
Bunq is one of Europe’s leading neobanks, backed by ING, part of an international network with over 40 million customers.
Openbank is a challenger bank that focuses on making payments, savings and investments easier and more profitable for its customers. The company works with more than 3 million customers across Europe and manages 15 billion euros of assets.
Monese is a neobank that aims to provide financial services to everyone around the world, at an affordable price and simple design.
N26 is a mobile-first bank that offers international payment, travel money, and personal finance features to over 400,000 customers in 24 European countries.
Revolut is a financial technology company founded in 2015 by Nikolay Storonsky and Vlad Yatsenko. In October 2017, it had 2 million customers using its application and 800 thousand people using its prepaid card services.
Yomo is a Spanish fintech company based in Barcelona that offers a mobile savings platform for people to save without risk.
Bnext is a fintech company based in Madrid with a strong focus on mobile banking services.
Factors in choosing the best banks for expats in Spain
When looking for a bank in Spain, there are a few factors you should consider. The first is whether you want an online bank or a traditional bank. Each has its own set of pros and cons. For example, online banks may be more convenient, but they may not have as many branches or ATMs. Traditional banks may have more branches and ATMs, but they may not be as convenient.
Another factor to consider is the fees associated with each type of bank. Online banks typically have lower fees than traditional banks.
You should also consider the interest rates offered by each type of bank. Typically, traditional banks offer the best rates. But that doesn't mean that you shouldn't look at other types of banks if those better suit your needs. If the convenience of having an ATM nearby outweighs a slightly worse interest rate, it might be worth considering a local bank over one abroad.
In general, choosing the best bank depends on what's most important to you- Low fees? Convenience? Interest rates? Ultimately, it's up to your personal preferences which type of bank will work best for you!
Spain banking fees and withdrawals at ATMs
ATM fees in Spain range from 50 cents to €6 per withdrawal. Deutsche Bank is the only major bank we found that charges no ATM fees. Local banks including Caixabank, Santander or BBVA will charge €0.50, while Caja Rural will also incur a cost of €0.80 during withdrawals.
Modern online banks vs traditional Spanish banks
When it comes to banking in Spain, you have a few different options. The most popular type of bank is the modern online bank. These banks are similar to what you would find in other countries. They offer all of the same services as a traditional bank, but they are operated entirely online. This can be convenient if you don’t live near a physical bank branch or if you want to do your banking from your phone or computer. However, because these banks operate without any actual branches, they typically don't offer anything beyond checking and savings accounts.
On the other hand, there are also traditional Spanish banks that still have few brick-and-mortar locations. Although they have been reducing the number of branches in recent years. These provide more variety in terms of their offerings (e.g., credit cards), but there may be some drawbacks to using them too. For example, traditional Spanish banks will often charge high fees for basic transactions such as withdrawing money at an ATM or over-drafting your account while abroad. If you're someone who needs access to these types of services regularly, then an online bank might not be the best option for you.
CaixaBank was recognized as the best bank in Spain for the eighth consecutive year. They were also awarded being the best bank in Western Europe for four years consecutively, at the annual Best Bank Awards held by Global Finance magazine. The bank’s core revenues amounted to €11.34 billion and pro forma recurring profit for the year was €2.42 billion. Fees and commissions stood at €4 billion, an increase of 6.7%. CaixaBank ended 2021 with a long-term savings market share of 29.4% and assets under management totaling 48.2%, or 16.5% through organic growth
Deutsche Bank is the only major bank that doesn't charge for withdrawing money from an ATM in Spain.
Yes, foreigners can open bank accounts in Spain. To do so, they need to show proof of non-residency in the form of an ID document (usually a passport), an NIE (a personal, unique, and exclusive number that is assigned to foreigners who need identification for various reasons such as economic activity, profession or social life which relates to Spain) and other documentation specific to the type of account they want to open.
Commission-free banking in Spain is provided by a mixture of online and traditional banks. Those banks include BBVA, N26, Wise, and Revolut.