Card Payments Continue to Overtake Cash in Georgia 

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The FINANCIAL — ATM transactions in Georgia have shared 42% as of January 2016, down from 47% during the same period of the previous year. With 7, 405, 260 the number of debit cards is almost twice that of the Georgian population. Cashless payments on domestic market have totalled 4, 974, 783 units, worth GEL 172, 303, 000 as of January 2016.  

In total, 7, 405, 260 debit cards were in circulation as of January 2016, up from 6, 287, 909 from the same period of the last year. With over 3 million Visa Inc. continues to maintain positions of leadership on the Georgian plastic card market.

The total number of transactions within Georgian economy with payment cards amounted to 8, 536, 319, worth GEL 872, 860, 000 as of January 2016. 

ATM transactions on domestic market have amounted to 3,561,536 units, worth GEL 700,557, 000. The number was 3, 420, 048 units, worth GEL 613,490, 000 for the same period of the prior-year. ATM transactions were sharing 47% out of total transactions in 2015. 

This year, the major share, or 58%, was spent via POS-terminals and imprinters, amounting 4, 974, 783 units, worth GEL 172, 303, 000. The number of transactions via POS-terminals and imprinters was 3, 822, 432 units, worth GEL 158, 669, 000 during the same period of the prior-year. 

Transactions via the internet that have been characterized with steadily increasing trend till 2014 has shown dramatic drop on the first month of the current year as well. The total value of transactions was 831, 297 units, or GEL 46, 038, 000 as of January 2016, down from 1, 116, 463 units, GEL 42, 841, 000 as of January 2015. 

There are 23, 999 POS-terminals in merchant and service outlets, as well as in bank’s branches for now. ATMs counted 2, 127 units. While the number of POS-terminals is increasing in Georgia from monthly bases, ATMs shows reduction. There were 19, 022 POS-terminals as of January 2015, while ATMs were counting 2, 198. 

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A total of 15 commercial banks operating in Georgia are engaged in payment cards issuing and acquiring activities. The three main card systems that operate in the country are: Visa, MasterCard and American Express.

Despite steady increase of cashless payments in Georgia, the share of cash operations in the country is still big. “Promoting cashless operations is first of all beneficial for banks. Keeping cash in ATMs is very expensive for us. We have quite a solid sum of cash in our ATM’s, which does not generate any direct revenue. Some positive news is that since 2010 cashless transactions have increased in Georgia by two and a half time. The rough estimate share of cashless payments amounts to 15% here in Georgia. In European countries card payment transactions make up over 47%. Eastern European countries are being left behind. Meanwhile Nordic countries, Norway specifically – plans to be the first cashless country. So, the global trend shows that minimizing cash is a future trend. Georgia is following this tendency. On its side, the role of the banking sector, we see our mission in offering secured, trusted and flexible instruments for payments. We also provide proper infrastructure in order to allow cardholders to make a cashless payments. Card payment is one of the guarantors of transparency of the economy. It minimizes the share of shadow economy,” Valerian Gabunia, Chief Retail Banking Officer at VTB Bank Georgia, Member of the Board, told The FINANCIAL during his interview after the Bank has launched the first cloud based payment system in Georgia and the Caucasus. 

“Accordingly, promoting this payment system is in the combined interest of banks, the Government and the whole of society. From the current outlook, I am optimistic that cashless payments will amount to over 50% in Georgia in 10 years’ time,” Gabunia added. 

“Modern technological development makes the national payment system more varied,” says NBG’s annual report. “The number of companies who are engaged in payment services has increased in Georgia due to the new law about Payment System and Payment Services which was introduced in 2012. Traditional as well as new participants were represented on the payment market in 2013, which include commercial banks, micro financing organizations, remittance entities and other providers of payment services, who provide payment services as a result of registration at National Bank of Georgia,” the report says.

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“The development of internet technologies and e-commerce has also contributed to the development of innovative services. Internet and mobile payment providers were registered at National Bank of Georgia in 2013. In addition, networks of self-pay kiosks are actively used by people and the share of their payments make up a large part of electronic payments in general. Electronic money has appeared, which has also contributed to the development of the payment system in Georgia. More foreign companies are expressing their interest in the Georgian payment market as time goes by,” says the report.

“The Georgian card payment market is characterized by a high rate of introducing innovative products. Alongside commercial banks, the Government has also played a big role in the development of card payments. Namely, launching pensions and all the social benefits started via banking channels; public service employee salaries are bound to their personal bank accounts; also, in a number of schools cash payment has become limited,” said Giorgi Melashvili, Executive Director at National Bank of Georgia.

In Melashvili’s words, the main advantages of non-cash are: security, as it reduces the risk of carrying cash; convenience – unlike cash it is easy to carry, secure while travelling or is not required to carry at all; time-saving – you can order goods and services over the internet from your very home; you have operational control of account transactions via sms, online, mobile banking and other remote sources; also, you are able to participate in various promos and discounts.”

 

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