During the first half of 2024, bank transfers accounted for 16.3% of all noncash payments, according to the Bank of Spain. That same year, Bizum recorded an average of 3 million transactions per day, with the majority being person-to-person (P2P) payments, despite having been available to businesses for 5 years. These figures demonstrate that both payment methods have become popular in Spain, and offering them in your business can therefore be a smart way to adapt to payment trends.

According to Stripe’s The state of European checkouts report, 86% of respondents indicated that they often abandon their cart if their preferred payment method is unavailable. Therefore, integrating both payment methods—Bizum and bank transfers—into your business can be ideal. That said, in certain situations, it might be preferable to opt for one system or another. Getting to know the differences between the two systems can help you make the best decision for your business and your customers.

What’s in this article?

• How bank transfers in Spain work
  
• How money transfers via Bizum work
  
• Differences between Bizum and bank transfers
  
• FAQs about the differences between Bizum and bank transfers
  

How bank transfers in Spain work

Bank transfers are money transfers that, within the European Union (EU), are processed through the Single Euro Payments Area (SEPA) system. Let’s see how they work in businesses:

• The customer chooses to pay by bank transfer: The customer selects the option to pay by bank transfer at the online store checkout or requests this payment method at the brick-and-mortar store.
  
• The business sends the necessary details: The business sends the customer the details they need to order the bank transfer.
  
• The customer enters the required information: The customer accesses their bank’s digital banking platform and enters the International Bank Account Number (IBAN), the account holder, and the item, which is usually the order or invoice number.
  
• The bank verifies and validates the transaction: After executing the order, the bank verifies that the source account has the necessary funds and, if so, validates the transaction.
  
• The bank transfer is completed: The bank transfer is processed through the SEPA system within 24 to 48 business hours. If it’s an immediate transfer, the processing time is reduced to 10 seconds or fewer.
  

How money transfers via Bizum work

Bizum is a payment method integrated into online banking applications that allows parties to send and receive money instantly. Although it began as a P2P payment service, since 2019 it has expanded its reach to B2C transactions. Let’s see how Bizum works when making payments in stores:

• The customer chooses to pay with Bizum: The customer selects Bizum as the payment method at the store checkout.
  
• The customer enters their telephone number: They enter their phone number, which fulfils the same function as the IBAN in traditional transfers.
  
• The customer starts the confirmation process: They receive a notification from their bank application, which they must tap to begin the confirmation process.
  
• The customer reviews and confirms the transfer details: They check the total amount and, if correct, accept the transaction.
  
• The bank receives the transfer request: The order is sent to the bank’s system, which, in a matter of seconds, checks that there are sufficient funds in the payer’s account.
  
• The money transfer goes through: The money is withdrawn instantly from the bank account associated with Bizum, and the payment confirmation is shown on the online store’s website.
  

Differences between Bizum and bank transfers

Essentially, bank transfers and Bizum money transfers work the same way: they allow the user to send money between bank accounts. However, the differences between these two payment methods are especially important for businesses, as they relate to transfer speeds and limits. Let’s look at the advantages of each payment method for your business.

Differences between Bizum, instant transfers, and standard SEPA transfers

Advantages of Bizum over bank transfers

• Immediacy
  Money transfers with Bizum are reflected in the recipient’s account instantly, while regular bank transfers can take up to 48 business hours. This difference can significantly impact cash flow, as well as increase operational costs associated with manual tasks such as verifying account deposits. While the customer has the option of ordering an immediate transfer from their bank account—which would also deposit the funds into the recipient’s account instantly—this option is not as widespread as Bizum: 95% of immediate transfers in Spain are made through Bizum.

• Simplicity
  The mobile number provided by the customer acts as an alias for the IBAN, which makes sending money much easier: instead of having to enter bank account details, the customer simply types in their phone number. This means that when using Bizum, manual errors are less likely to occur, helping your business reduce rejected payments.

• Very widespread local payment method
  According to Stripe’s The state of European checkouts report, Bizum was already the preferred payment method for 38% of Spanish consumers in 2022, despite only 22% of businesses accepting it. In 2024, the number of Spanish businesses offering Bizum increased by 56%, confirming its rapid expansion. Offering very popular payment methods improves the ecommerce customer experience.

Advantages of bank transfers over Bizum

• Full availability
  All business bank accounts support bank transfers, but some don’t offer the Bizum option for professionals. One example is Bnext, a Spanish neobank that supports SEPA bank transfers but does not offer Bizum compatibility.

• Greater international coverage
  With bank transfers, customers in all countries within the SEPA area can pay for the products or services your business sells. On the other hand, Bizum only allows payments in certain countries, such as Andorra, Italy, and Portugal, although the list is expected to expand. This limitation is especially significant if your business processes a significant volume of intracommunity transactions.

• Less restrictive limits
  In the case of both Bizum and bank transfers, each institution can set its own transaction volume limits. However, bank transfer limits are usually much higher: for example, BBVA sets a limit of €30,0000 per day for bank transfers, while it sets the maximum Bizum amount at €3,000 per day for online purchases.

• Possibility of cancellation
  While a money transfer performed with Bizum cannot be canceled, it is possible to cancel a bank transfer. To cancel a transaction, it is key to request cancellation before the bank processes the transfer and sends the money to the recipient.

As these points illustrate, both payment methods offer numerous advantages, so implementing both in your business can be ideal. To do this, simply add them to your payments tech stack, a very simple process if you work with a payment platform like Stripe Payments, which allows you to accept different methods with just a few clicks.

FAQs about the differences between Bizum and bank transfers

Which payment option is more secure, Bizum or bank transfers?

Bizum might create a greater sense of security since the customer doesn’t need to enter bank details, but the truth is that both payment methods are basically equally secure. In fact, Bizum’s level of security is equivalent to that of the online banking app into which it is integrated. In both cases, transactions are carried out under the strict measures required by the revised Payment Services Directive (PSD2) regulations, such as biometric payments and two-factor authentication (2FA).

Bizum or bank transfers: Which option is better for self-employed workers?

Each payment method offers specific advantages, so which one is better depends on the situation. Bank transfers are often best for sending or receiving large payments—such as when paying suppliers—while Bizum is ideal for speeding up smaller payments. For example, a web designer could receive payment via bank transfer for an invoice for creating an online store in Spain and receive payment via Bizum for small, recurring tasks, such as uploading new products to an ecommerce catalog. Ultimately, it is advisable to use the most appropriate payment method based on the circumstances.

Which method is more expensive, Bizum or bank transfers?

Payment gateways can impose their own fees associated with processing bank transfers or sending money with Bizum, but both methods are typically free or incur a very low cost. For international transactions, bank transfers typically involve a higher cost—for example, CaixaBank charges a 0.40% fee with a minimum payment of €3.95—while Bizum charges no fees for sending money to supported countries, such as Andorra, Italy, and Portugal.