Portugal: an analysis of payments and ecommerce trends

Payments expert João Nordeste Parracho analyses the payments and ecommerce industry trends in Portugal.

Portugal’s payment ecosystem has evolved significantly over the last decade, blending the reliability of long-established systems like Multibanco with the growing adoption of modern digital payment methods such as MB Way, contactless cards, and wallets. While the country has traditionally leaned towards conservative financial habits, such as debit over credit, it has quickly embraced innovation in mobile and real-time payments.

This article explores the most widely used payment methods in Portugal, provides insights into the market’s evolution, and highlights key trends that businesses and fintech professionals should consider when entering or operating in the Portuguese market.

1. A snapshot of the Portuguese market

Portugal, with a population of around 10 million, has one of the highest banking penetration rates in Europe. Nearly all adults have access to a bank account, and cash usage has significantly declined, especially after the COVID-19 pandemic accelerated digital habits.

• Internet penetration: ~89%
• Smartphone penetration: >90%
• Ecommerce penetration: ~76% of internet users shop online
• Card ownership: 2+ payment cards per person on average

A high degree of trust in local institutions and centralised payment infrastructures like SIBS (which operates Multibanco and MB Way) has enabled Portugal to adopt payment innovation at a relatively fast pace, especially compared to other Southern European countries.

2. Most common payment methods in Portugal

2.1. Multibanco: the backbone of Portuguese payments

Multibanco is Portugal’s interbank network and a cornerstone of the national payment infrastructure. Launched in the 80s, it connects virtually all retail banks and supports over 60 functionalities beyond cash withdrawals, including bill payments, mobile top-ups, government services (taxes, fines), P2P transfers, public transport tickets, donations, direct debits, and so on. In 2023, the Multibanco network recorded a peak of 365 transactions per second on 23 December, an all-time high for the network.

One of the most common payment methods is still the ‘Multibanco Reference’ (Referência Multibanco), a widely used B2C payment method in ecommerce for SMEs. Merchants generate a reference code at checkout that customers can pay via ATM, online banking, or their mobile banking app. While this method is secure and well-trusted, it can be less convenient for real-time or mobile-first experiences and is prone to abandonments, as customers may choose not to proceed with the payment after checkout. 

2.2. MB Way: the rise of mobile payments

MB Way is a mobile payment solution launched in 2014 by SIBS, which allows users to make P2P payments using a phone number, pay with QR codes, or NFC in-store, shop online, withdraw cash without a physical card, split bills, and request money from friends and family. 

In 2024, MB Way overtook Multibanco Reference as the most-used online payment method in Portugal, according to Marktest.

Some adoption highlights:

• 6+ million users (over half the adult population)
• 70+ million monthly transactions
• Accepted by over 30,000 merchants
• ~45% of ecommerce payments made via MB Way

MB Way has been closely linked to various innovations and additional functionalities. For example, MB Way users can now send P2P money transfers via SEPA Instant to mobile phone numbers registered with Bizum in Spain and Bancomat in Italy. Also, after the European Payments Initiative (EPI) and the European Payments Alliance (EuroPA) reached a collaboration agreement to expand interoperability of mobile and online payments across EU countries, which include MB Way operator SIBS, users can make instant, seamless, cross-border transactions with an already very familiar payment method.

2.3. Debit and credit cards

Portuguese consumers show a strong preference for debit over credit cards, influenced by cultural attitudes toward debt and conservative spending habits.

Regarding card schemes, Visa and Mastercard dominate the landscape, although the majority of cards issued in Portugal are co-branded, ​​meaning they carry two or more payment brands on the same physical card. One of those is almost always the Multibanco (MB) brand and often an international brand like Visa or Mastercard. Due to the high fees that small businesses incur for card payments on the Visa/Mastercard networks, some smaller merchants outside the main urban areas only accept cards running on the local card network (MB).

2.4. Wallets, PayPal, and BNPL

Wallet solutions like Apple Pay and Google Pay are growing, especially among tech-savvy users and in urban centres like Lisbon and Porto, either for quick and easy payments in stores and online or for tap-in on public transport. 

PayPal is still one of the preferred payment methods for ecommerce shopping, with around 46% of Portuguese shoppers naming it as one of their preferred options.

On the contrary, Buy Now, Pay Later (BNPL) adoption has been steadily increasing among Portuguese consumers. According to Klarna, they have reached approximately 700,000 consumers and 6,000 local partner brands in less than four years of operations. This is a contrasting trend compared to other, more traditional credit solutions, like credit cards. 

3. Key players in the Portuguese payment space

3.1 SIBS (Sociedade Interbancária de Serviços)

SIBS is the key backbone of Portugal’s payments infrastructure, setting the standard for domestic payment rails.

As the operator of the Multibanco ATM and POS network and the MB Way mobile platform, it enables seamless digital payments across Portugal and beyond. Operating across Europe, Africa, and Asia, SIBS supports more than 300 million users worldwide and processes over 4 billion transactions annually via more than 350,000 terminals. 

Another major player is SIBS Analytics, which provides payment data insights to retailers, banks, and public institutions. This reflects a broader trend, where payments infrastructure isn’t just a utility, it’s a foundation for digital innovation and consumer insights.

At the centre of this ecosystem is a collaborative model: rather than competing with fintechs or banks, SIBS enables and connects them. This shared approach has allowed Portugal to be a first mover on many payment topics, such as instant payments and cross-border interoperability. 

3.2 Banks and issuers

Banks play a central role in Portugal’s payments landscape, not only as traditional custodians of consumer funds but also as enablers of digital payment innovation. Nearly all major Portuguese banks are deeply integrated with the SIBS ecosystem, making services like Multibanco and MB Way available to all account holders. 

Unlike in some European markets where banks compete on proprietary features, the Portuguese model emphasises universal access to a shared set of payment services. For instance:

• A Millennium BCP customer can pay a utility bill or make a mobile top-up through a Multibanco ATM just as easily as a CGD customer.
• All major banks support MB Way account linking (even Revolut customers!), enabling their customers to make instant mobile transfers, generate virtual cards, and pay online with one-tap authentication.

This harmonisation of services reduces friction and enhances consumer trust, which is why Portugal enjoys one of the highest levels of digital payment penetration in Southern Europe (source).

In addition to issuing debit and credit cards (typically branded with Visa or Mastercard, often co-badged with Multibanco), many Portuguese banks also act as acquirers for merchants. This role is increasingly challenged by international players like Adyen, Stripe, and Revolut, but local banks still dominate the SME and corporate segments due to trust, pricing, and integration with national infrastructure.

3.3 Fintechs and PSPs

Portugal is characterised by a strong domestic infrastructure and increasing international competition in the fintech and PSP market. At the heart of the market is SIBS, which provides the infrastructure for Multibanco and MB Way. This approach has allowed for a high penetration of digital payments. However, it has also led PSPs to rely on access to local infrastructure.

International PSPs such as Stripe, Adyen, and PayPal are already well-established in the market, primarily serving ecommerce and cross-border needs through EU passporting. Local fintechs such as Eupago, easyPay, and ifthenpay are focused on providing access to domestic payment schemes, especially for SMEs, acting as a bridge to the local infrastructure.

The market is characterised by a balance between local and international PSPs, where success is achieved by providing a combination of international coverage and strong localisation for access to domestic payment methods.

4. Regulatory environment

The payments regulatory framework in Portugal is dominated by the regulation set by the European Union, especially the PSD2. This framework regulates licensing, consumer protection, and Open Banking, allowing third-party providers to access bank accounts with users’ consent. This places Portugal in a larger ecosystem with consistent regulation across Europe.

The regulation and supervision of payment systems in Portugal are carried out by the Banco de Portugal, the national competent authority that regulates payment institutions, electronic money institutions, and fintech companies. The EU’s passporting regulations allow foreign players to enter the market without a license, making it easier for new players to enter the market (e.g., Revolut using its Lithuanian license to operate as a bank in Portugal).

In terms of operation, payment institutions must meet Strong Customer Authentication (SCA), fraud monitoring, and high levels of transparency. However, new regulations, such as beneficiary identification for bank transfers, have been added to payment systems to ensure security and reduce fraud.

The payment system in Portugal is dominated by SIBS, which runs the payment infrastructure, including Multibanco and MB Way. This places Portugal in a relatively centralised ecosystem, requiring partnerships to operate in some cases.

​​5. Opportunities and challenges

The payments market in Portugal shows both growth prospects and challenges, largely driven by the strong domestic infrastructure and alignment with the European Union. 

On the growth side, the digital payments segment is an area of considerable opportunity. For instance, MB Way has already demonstrated strong traction for peer-to-peer transactions and ecommerce.

Another area of opportunity is the under-explored potential of Open Banking. Here, the SEPA instant payments system proves to be a considerable promise for Open Banking payments, given it enables real-time, account-to-account (A2A) payments, which are core to Open Banking. 

Also, the alignment of the Portuguese payments system with the European Union makes it an ideal entry point for fintech companies looking to expand into the European continent by passporting into the European market.

However, there are also notable challenges. For instance, the centralised nature of SIBS means that there is a dependence on local infrastructure. In addition, the ability to access domestic payment systems may require partnerships. 

Lastly, the size of the Portuguese market is also a challenge. While the Portuguese market is an ideal environment for innovation, scale is often only achievable by going beyond the Portuguese market. Therefore, from an early stage, wider European strategies are crucial. 

In conclusion, the key to success in the Portuguese market is to take advantage of the digital (r)evolution and the opportunities provided by the EU while effectively addressing the challenges of infrastructure dependence, regulatory complexity, and the size of the Portuguese market.

About the author

João is a product manager specialising in payments, fintech, and ecommerce, with a strong focus on delivering complex enterprise-grade payment solutions. Experienced in leading end-to-end payment initiatives, from strategy to execution, across global platforms. He has a proven track record in integrating payment providers, enabling scalable payment solutions, and supporting large enterprise clients. Skilled in cross-functional stakeholder alignment and delivering high-impact products that drive growth, performance, and operational efficiency.