A widespread power outage hit certain parts of Spain and Portugal last Monday, severely impacting a range of essential services, including payment access.
Beginning around midday, large parts of both countries experienced blackouts, disrupting traffic lights, train networks, airports and payment services. Early reports indicated that ATMs and point-of-sale (POS) systems were among the services affected, leading to residents and tourists relying on cash payments.
Talking to the BBC in Lisbon, Emily Lansdown said: “It’s crazy, we were trying to pay for our brunch and it all shut down. We’ve been trying to get a taxi to the beach because all the trains are down.”
Early on, there were no clear indications of what caused the blackout, leading Spain’s Prime Minister, Pedro Sanchez, to host a national security meeting.
Despite some concerns of a cyber attack, Spain’s power grid operator Red Electrica began to restore electricity and highlighted that extreme temperature variations in Spain contributed to the outage.
Portuguese energy company REN, said: “Due to extreme temperature variations in the interior of Spain, there were anomalous oscillations in the very high voltage lines (400 KV), a phenomenon known as ‘induced atmospheric vibration.
“These oscillations caused synchronisation failures between the electrical systems, leading to successive disturbances across the interconnected European network.”
Amid the chaos of the outage, merchants that were still able to operate could only accept cash. This serves as a reminder not only of the risks associated with an increasingly digital payments landscape, but also of the ongoing importance of cash as it has seemingly took on less importance.
Importance of cash
While this particular blackout was caused by unforeseen issues, banking outages have become a regular occurrence, particularly in the UK.
In February, the Treasury Committee reported that between January 2023 and February 2025, the top nine UK banks suffered at least 158 banking IT failures. These incidents resulted in a total of 803 hours of unplanned technology and systems outages.
Further disruptions occurred outside the timeframe of the investigation. On 28 February, Lloyds Bank, Halifax, TSB and Bank of Scotland apps all experienced failures. Additionally, Barclays customers were unable to access all of its services between 31 January and 2 February.
These outages have prompted some banks to reassert the importance of maintaining access to cash. In January, the European Central Bank (ECB) announced potential designs for new banknotes.
At the time, Piero Cipollone, Executive Board Member of the ECB, said: “We are developing new banknotes because we are committed to cash now and in the future.”
A recent ECB study further emphasised this point, revealing that 62% of consumers in 2024, up from 60% in 2022, consider access to cash an essential part of daily life.
