Why Spain could be the next FinTech powerhouse


The European FinTech market is currently led by market share by the UK, Germany and France. However, the arrival of a new big competitor may be about to shake things up.

According to Currencycloud, the Spanish market is currently looking to be a boon for the FinTech market.

Not only is Spain the main market for existing FinTechs in Southern Europe, FinTechs are also about to benefit from the country’s new Startups Law that is aimed at the unique needs of the country’s small FinTechs. It is due to be approved by the end of the year.

Spain’s FinTechs have increased six-fold since 2015, making Spain the sixth-largest global market in terms of Fintechs per capita. They have also benefitted from over €600 million invested between 2020-2021, putting them in a great position to build on their existing ecosystem.

Currencycloud said, “A combination of tech innovation and investment caused Spain’s FinTech market to triple between 2015 and 2019. Several companies that came from that period still dominate the B2C sector, which is increasingly influenced by Millennial and Gen Z consumers.

“Spain’s neobanks Bnext and Rebellion Pay, UK-based Revolut, and Germany’s N26 have, together, a 30% market share of Spain’s digital banking market. Other successful Fintechs from this period, such as Verse, Goin and Housers give people easy to use financial tools that are particularly attractive to Gen Z and Millennials.”

This, the firm claims, makes it not a surprise that Spain boasts a 56% FinTech adoption rate by consumers, and is currently ranked 21st globally and seventh in Europe in consumer Fintech adoption. This is a figure that puts Spain ahead of the US, Italy and France.

In addition, the EU’s Payment Services Directive came into effect in Spain in 2019. This, Currencycloud remarked, accelerated banks taking up specialist FinTech solutions – subsequently boosting the FinTech sector.

Due to be enacted by the end of 2022, the Startups Law aims to make Spain a more entrepreneurial country, attractive to international investors and talented innovators. With this considered, the law can be seen as very good news for Spain’s FinTech startups.

Currencycloud detailed, “Currently, Spain’s start-ups need €3000 capital in a bank account to get a legal entity formed, taking almost six weeks to obtain the necessary permissions to get a new business to market. The Start-ups Law will end this by cutting through time consuming red tape and making the process much more accessible by requiring just one euro as capital and placing all the application work online. The whole process will take just a few hours.”

Furthermore, the Start-ups Law intends to increase the current personal income tac deduction for investment in startups from 30% to 50%. If a start-up meets specific requirements, the Start-ups Law proposes to increase the base on which the tax deduction can be applied from €60,000 to €100,000.

The intention is that by unlocking capital it will make the country much more attractive to investors and innovators.

Currencycloud concluded, ”Spain can be a gateway to other EU countries, who, by using Spain as their base, can access the LATAM market. Spain, despite its relatively modest population of 47 million is in a unique position thanks to culture, its rapidly developing Fintech sector and a government actively promoting entrepreneurs, to interact with a continent almost ten times its size in population.

“As well as welcoming investors and talent from the world over, Spain’s Fintechs can expand further outward too – tapping into the opportunity-rich market of Latin America making the most of new regulations, historic cultural ties, and a common language and business culture.

“Although Spain’s Fintech market is less mature than its fellow European nations France and Germany, there are exciting opportunities for Spanish FinTechs to be had within the EU.

“With its one trillion-euro economy and huge talent pool, Spain is well placed for innovators and investors looking to open up their European-based business. It’s why the Spanish Fintech sector is growing year by year, with 80% of FinTechs based in Madrid, Barcelona and Valencia.”

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