Payment methods in Spain

For the past 30 years I have used my nationwide visa credit card to pay most over the counter bills, food, petrol etc in Spain

There is no charge either end and I get within a smidgen of the inter bank rate.  Never found any better MO

I have a crown pension paid to my nationwide account in U.K. and my OAP paid directly to my Spanish bank account.   I again get the best rate possible.   I use the OAP income for everyday small transaction.

I get free banking in spain as a result of the OAP credit

PS.   I also use my Visa card in the same fashion when on holiday in Asia

We are pensioners. Until recently we used Spanish bank accounts and Spanish debit cards. Now we use N26 cards and some cards from other banks/fintechs abroad.

The benefits:

- Spanish banks charge outrageous fees if one does not transfer every month a salary or pension to them,

- we will NEVER transfer any money to Spanish banks as they are not only fundamentally nationalized, and an extension of Spanish government, but they are also very unsound financially, have bad opening hours, have an antiquated international transfer and credit/debit card system and often badly educated and selfcentered instead of customer centered staff without listening skills constantly ineterrupting what one says (and we converse in fluent Spansh), even people chewing gum while talking to customers,

- the only reason we kept Spanish bank accounts was because we were forced to as direct debits can only be done on Spanish bank accounts, a monopoly that teh Spanish government supports but is illegal in the EU (still teh Spanish refuse to change that), but since a few months N26 a German fi ntech opened a physical branch in Spain and was that way able to circumvent the Spanish shenanigans against its European customers, so now we can have direct debits with a bank that is located outside Spain AND there are NO FEES to pay beyond a tiny amount for a debit card,

- no more dealing with the often badly educated employees at expensive 900 numbers (which ought to be free since most problems are caused by the bank themselves but are not free despite Spanish government suggesting they are - try using your cell phone and see how they eat up your phone balance),

- no more tons of red tape to open a bank account including weeks of waiting time, only straightforward efficient 10-15 minute online  electronic signup.

- no more days to a week long waiting till a debit or credit card transaction is processed as happens with Spanish banks, instead immediate changes to one's balance so one is always aware what is left,

- far easier to open disputes if something goes awry with a transaction or if it is a chareg that one did not authorize.

We feel liberated from the time and money wasting Spanish banks.

And no, the pseudo-online banks the main Spanish banks invented are as bad, even if they have less fees or onr even none. They have software and procedures that are full of bugs and antiquated and they are still the same unpleasant and risky banks.

Still, when shopping in Spain I recommend not just having cards to pay but also carry some cash money. The number of outages of their networks or simply bugs in their software and procedures is substantial an dthen one has no alternative to pay. Also take into account that at markets it is often necessary to pay cash anyway and certain service providers will appreciate cash more than cards even if they can accept both.

Oh, and for a long time we did not have any scammer use one of our cards, but after moving here someone used one of our card details without our authorization. We successfully disputed it, but suspect that the card details were copied at one of the Spanish businesses we bought offline and there fore charged our policy to use far more often cash, especially with businesses we frequent/know little or for the first time.

Hello everyone,

Please let us not make a debate out of this topic. Our main aim is to inform expats and expat to be based on our personal experience. Members will read and consider enquiring from banks before opening an account/transferring money etc.

Thank you for your contribution,
Bhavna

At the risk of drawing ire from some quarters, I can vouch for the unfriendly and unprofessional attitude of Spanish banks mentioned by paperdetective citing my experience with 3 banks this month as follows:
1. BBVA - Said they can not open a bank account for me although I have the NIE number and a Spanish Residencia stamp in my passport. In a most unhelpful manner, all they could do was to give me their website and suggested I open an account online. Simple eh? Sure, their online application asks a lot of details and then bogs down without accomplishing anything.
2. CAIXA Bank -  Took all my details and said they can't do anything, but will ask the head office for authorization, and to come back in 5 days for an answer. When I went back after a week, they said they had no news and asked me to come back with my NIE paper (they didn't even mention this the first time I was in their office)! 2 weeks later - nothing! All the while, the attitude was like "Why are you here bothering us?"
3. Santander -  Said to come back when I have my official Tarjeta de Residencia.
I speak enough Spanish to get by and to make myself understood. The service at all these places was definitely not customer-friendly and no one bothered to see things my way, to consider that I am a foreigner, obviously not conversant with all their bureaucratic ins and outs, trying my best and with great patience to explain everything in their own language and asking politely for their kind help. I was only asking them to open an account (bringing them business), a process considered to be so simple everywhere else. The mind boggles at what their response would be should I ever have to ask them to ACTUALLY do something for me?

paperdetective, could you please elaborate on what is N26, how can I use that as an alternative to Spanish banks (paying bills on-line, credit/debit cards, my pension deposit, money-transfer, etc.) and whether it would work for Canadians? Thank you kindly.

I am a retired American. I have an American Airlines Citi Platinum card that I use for most expenses. It transfers money from my US credit union at approximate interbank rates with no commision, and gives me frequent flyer miles, as well as other benefits. Costs me $95/year. For large transfers I use transferwise. I track USD/EUR to try to get a good rate. I maintain a local bank account at banco Santander, with a credit and debit card for smaller purchases, backup, or for when the dollar is low with tespect to the Euro.

My main complaint about Spanish banks is that they don't pay any interest. I started a 123 account at Santander, and after a couple of years they have reduced the interest they pay, even with a large balance in the bank, to almost zero. Similarly, I started a couple of retirement accounts, and moved money to suggested "fondos de inversion". After 15 years, the yield from my investment was less than 1% per year. The "conservative" monetary fund in which I was last invested was actually costing me money, because it did not make enough to pay the management costs.

Looking elsewhere in Europe to invest my money, I have not found much in the way of a money market or conservative fund that both pays some interest and where my money would be secure. There are some Italian banks, but given the risk, I don't think it is worth it.

I have had accounts with four Spanish banks in the past 37 years,  involving probably hundreds of staff members.  No problems.

Maybe I have just been lucky,   although  the more polite and considerate I am the luckier I seem to be, not just with banks but generally.

Most of my transactions are carried out electronically - debit/credit card. I seldomly use cash and a great deal of places honor electronic transactions. Beware that American Express and Diner's Club Cards are not widely honored - just a few establishments.  In case of online transactions I use my very own bank account or PayPal. If buying things in Wallapop beware of scams and pay using Wallapay, this way your money will be protected.

In my case and being an independent contractor (autónomo) is the best way of keeping track of my expenses and also I can use this information/statements to file taxes at the end of the year. If you're one of those that likes to have bundles of cash you'll become prey of vultures (pickpocketers).

Please note that if you want to ask for personalized invoice (for expense reports, tax filling, etc.), make sure to state so before paying.

Hi, you can pay by cash or debit & credit card and also mobile payment easily.

This has been a very complex and at times heated thread.  So let me try to simplify matters:

1.  All methods of payment are accepted in Spain, much as they are in most other Western countries.
2.  Cash is theoretically less secure, but arguably easiest to handle.
3.  Debit cards are widely used almost everywhere, though you must have enough in your bank account to cover the amount.
4.  Credit cards are best used for larger amounts. But be aware that Spanish banks are very likely to insist that the bill is paid off in full at the end of each month.  Also credit limits tend to be on the low side compared to many countries.
5.  Try not to use foreign cards for payments; you'll lose out on charges and exchange rates.
6. If you need currency from your own country, don't use a foreign card in a Spanish cashpoint to withdraw cash.  You'll be hit by charges and exchange rates as above.  It's best to arrange a regular - or occasional - transfer from your foreign bank account to your Spanish one.
7.  The only certain charge-free way of withdrawing cash is to use a machine operated by your own Spanish bank.  The rest will charge varying amounts of commission.
8.  Store credit payment cards are generally not worth having, though discounts / cashbacks from store loyalty cards (free from some national chains) can add up usefully.

I hope this is of help.  I am British and have been living in Spain for almost 20 years.

Best wishes to all.

I have a local bank account, Santander.  I keep enough money in there for about 6 months of expenses. 
I use one of the following, depending on situation
- Cash; if it is smaller amounts like groceries, coffee, etc
- Bank debit card; which takes money straight from my bank account
- PayPal, with payment from my bank debit card if Euros, my US credit cards if in USD
-  US credit cards as last resort
Due to fluctuations in exchange rates, I watch what is going on and if rates are low, but I expect them to rise, I transfer over a larger amount of money.  If they are high, I avoid transferring money as much as possible.  Difference in exchange rate, in my experience, is the biggest money loser out there
I have found a service for making currency transfers that is a lower cost (but not free) and has better exchange rates than the banks have

I also note that the banks here don't give much in interest, as well as it is hard to invest and make money here in Spain.  I have about 15 years experience with a managed account in the US, and in that 15 years, even counting the 2008 debacle, I averaged welll over 8% net gain in my account.  I can't get anything like that here, so the majority of my money is invested and managed in US

Regards

I use the debit card of my local account most fo local purchases in Spain, the credit card for online or international purchases.

Mark.  5.  Try not to use foreign cards for payments; you'll lose out on charges and exchange rates.

Mark.  Just to qualify that. 

As I Posted

“For the past 30 years I have used my nationwide visa credit card to pay most over the counter bills, food, petrol etc in Spain

There is no charge either end and I get within a smidgen of the inter bank rate.  Never found any better MO”

I cannot comment on other cards/banks

Look at setting up a Revolut account. Done in minutes, safe as houses. The exchange rate I get is the same as the bank rate, and no commissions to pay. Great bank, fully registered and accredited. The day of the High Street banks, in ANY country, are dying now. And it's about time too! Just look at www.revolut.com

nowretired wrote:

paperdetective, could you please elaborate on what is N26, how can I use that as an alternative to Spanish banks (paying bills on-line, credit/debit cards, my pension deposit, money-transfer, etc.) and whether it would work for Canadians? Thank you kindly.

As requested, there are quite a number of international fintechs (online banks with almost no offices that one can sign up online in 10-15 minutes and have accounts in MULTIPLE currencies.

The best known ones that have been around longest are:
- Transferwise
- Revolut
- N26

They usually have a bank license in Germany or the UK.

Apart from also offering fast transfers and much lower rates than the classic large dinosaur banks in most countries, they obviously work at a lower cost that they pass on to us since they have virtually no B+M branches. Also, with their zero subscription free account they offer fee free ATM withdrawals with a cap per month that can be raised by paying a small subscription fee, but one can also stick to their zero version, which I do. The consequence is then that one uses their debit card more. It depends on what one's chosen style is.

Note that the fintechs mostly do not charge for SEPA (so inter-European bank to bank transfers) unless it is Transferwise.  A new development is that of instant payments. For those they may charge a small fee.

I recommend not to leave large amounts for a long time on any of these fintech accounts, but that is something I recommend nowadays with any bank. One should spread one's risks. Also make sure not to start with transferring huge amounts until they know you from smaller transfers, since they are bound, like your bank, by the now very strict money transfer laws worldwide. I believe with any bank there is now an automated scrutiny built in starting at 800 euro.

As tp foreign exchange, for example, if you transfer money from Canada, use a service like Transferwise as go between insteda of directly transferring to th Spanish banks which charge huge fees for that. From that go betwene you can then transfer to a Spanish bank or fintech. Some of the fintechs even play the role of go between for international tarnsfers. and offer a debit card to immediately start paying daily shopping in euros.

Why I especially prefer the fintechs beyond what was mentioned before? I prefer them especially because the laws of Germany or the UK protect them far better than teh Spanish legal system. In any dispute you have better recourse there.

Getting back to the N26 option, until a few months ago "IBAN discrimination" so Spanish banks and businesses discriminating against direct debits from non-Spanish IBAN (European) accounts despite the EU law forbidding it, was standard. One was forced to therefore have a Spanish bank account at one of teh dinosaur banks with the high costs and risk as a consequence. Since a few months  the fintech N26 opened a real B+M branch in Spain so they now offer Spanish IBAN bank account numbers to new online customers residing in Spain. The residence requirement is obvious of course, although I would not be surprised if some day they may drop that. It means of expats (and Spaniards) in Spain a liberation from being forced to use Spanish banks for the direct debit needs caused by the financial culture here of most companies contracting with one for periodic services demanding only direct debits.

As to whether these fintechs are always available for sign up from abroad, some are, some are not and some will soon be available. It is a quickly developing industry. That also means one ought to be careful and check reputations and first test the waters.
 
It is a banking business model that will eventually be the only one left. The old banks will have to find new employment.  We will see more and more only ATMs around instead of branch offices. Spain will probably be one of last EU countries to catch on with that as it still has numerous branch offices. The same is happening with processing cash here through ATM's. There are still quite a number of ATM's that only supply cash and cannot process deposits. The machines are being upgraded now at various banks but the process is far from finished, especially in many rural areas.

By the way, if you have a relationship with a trustworthy bank in your country of origin, please consider keeping it. That kind of relationship often remains gold even if far away.  It is one of three things of my country of origin I never threw away, the other two being a local hone number and a local mailing address.

Oh, and remember, cash business transactions are only allowed up to 2,500 euro nowadays. Above that amount by law you need to do transfers. Could be worse though. In Portugal it is a mere 1,000 euro. In some European countries they are even preparing to abolish cash business transactions completely.

Sorry, it got to be such a long story. :-)

Hi
I have one Spanish bank account that looks after standing orders and let bills be paid (elec, tel,ibi,security, ..).  This account never has a large amount as Spanish authorities can take money out (traffic fines, hacienda, etc).
From this account, we have a debit card for day to day payments.
Spain is easy just debit card and pin.
We can use this to raise bank cheques to pay for larger purchases etc.
Note that anything above 2500€ needs to be paid by either bank transfer, c card or bank cheque.
Once a year one gets a statement that is sufficient for tax purposes and keeps hacienda happy - They do know all about your Spanish transactions, income and assets.

For transfers, I use XE or just transfer inner Europe (Iban) which is regulated and cost a max of 6€.
For online I use PayPal linked to the Spanish account.
I have c cards based in Uk and Germany.
So far that works nicely and cost-effectively.
M

Thanks Johncar.

I sit corrected!   Unfortunately I can't open any British bank accounts since I don't have a U.K. address. But your information could be very useful for others.

You can open a British bank account. No need to be a resident of Britain. By the way, that is EU law with any EU country. Residency is no requirement.
I have one through fintech Revolut (remotely).
Even have a German one, both while living in Spain.
If I wanted I could step into any bank in any EU country get a local free tax number for non-residents and open a bank account there.

Yes, with a few exceptions,  you can open an Account in UK if you are an EU national, however, it is only the most basic type of account. I was going to do it so as my wife could be a joint account holder, we even went to UK, as it had to done in person at the bank, but we did not go ahead as it was not worth the effort

Of course Brexit if it  happens will almost certainly see the end of the UK being told what to do by Europe, so the facility will cease.

See ;-   https://europa.eu/youreurope/citizens/c … dex_en.htm

Hola @Paperdetective, I will try the virtual banking. Could you or anyone confirm this is the legitimate website please https://get.n26.com/?utm_source=google& … =homepage3

@GuestPoster134

Spanish banks are not all virtually nationalized, but privately owned, something British banks cannot boast.

It seems you may find It difficult adjusting to Spain if you distrust the country so.

@nowretired

It's called anti-money laundering laws/ due diligencie and everyone including the Spanish have to suck It up coz it's the LAW

@GuestPoster134

Spanish banks  are not fundamentally nationalized, not like some UK banks. If you want a solvent bank, Banca March is the most solvent in Europe.

Spain is a beautiful place to live - don't slag it off so much if you want to make it your home and be happy here

@getinthepool

Beware, not a registered bank in UK so - amongst other issues - there is no pushback fraud reimbursement, automated money laundering controls mean accounts can be blocked for weeks and abuse of workforce is under investigation.

I still have a non resident account at Bankinter (it took 15 minutes to open whereas I have been refused by Caixa, Santander and BBVA!), and my French account with its debit card.

In daily life I use either this debit card or cash.

As soon as I have official residency here I may change my local non resident account into a resident account w/ a Spanish debit card.

But in parallel I'd like to still hold onto my French bank account, even though Bankinter seems to work just fine.