The FINANCIAL — Utility Service Payment is the most popular online payment service in Georgia, according to research by The FINANCIAL. Less customers use the internet to buy electronic goods or clothes.
The FINANCIAL — Utility Service Payment is the most popular online payment service in Georgia, according to research by The FINANCIAL. Less customers use the internet to buy electronic goods or clothes. “In 2009 the number of payments increased by 34% y-o-y and the volume of payments by 61%,” David Kiknadze, General Director of Direct Debit Georgia, told The FINANCIAL.
The majority of Europeans go online 6 to 7 times a week now. Northern Europeans go online more frequently than Eastern Europeans who tend to go online for longer periods, research by IAB Europe showed. 57% of Europeans made an online purchase in the last 12 months. Eastern Europe again showed hesitancy with only 24% making online purchases.
Direct Debit Georgia operates one of the most popular online payment services in Georgia – ipay.ge. Currently, iPay offers distanced payment of mobile telecommunication, telephone and internet bills, all electric, gas and water bills, digital and cable TV bills, charity donations, and an internet store.
Kiknadze says that iPay also allows one to make Public Registry payments which has proved to be one of the most widely used services when it comes to online payments. “New services are being added on a regular basis. One of the recent additions was in the utility and communications payment section,” he says.
Making an online transactions via the iPay system is available by any card that is serviced by Georgian Card: Bank of Georgia, Bank Republic, HSBC, KorStandard Bank, and BTA Bank.
“Online payment is easily accessible; it saves a lot of time and is easy to use. That is why such a service is becoming very popular,” Kiknadze notes.
Representatives of Georgian banks say that Georgians still prefer using cash when it comes to payments. But they believe that changing the mentality of using an out-of-pocket sum is up to time.
“Apart from issuing cards, ProCredit Bank is involved in acquiring, i.e. installation of terminals at trade and service spots. In our work, we often encounter problems with the personnel of those sales units as well as card users. The problem is that some clients are apprehensive about using POS terminals as this is a relatively new product for them,” says Lasha Gzirishvili, Head of the Plastic Cards Department.
Gzirishvili says that several years ago the situation with ATMs was the same.
“We are devoting significant efforts to the education of our merchants and cardholders through presentations and trainings. The result is evident – an increasing number of POS terminals as well as a growing number of card owners using their cards for payments at trade and service outlets,” he says.
According to Gzirishvili, on average every tenth card issued by ProCredit Bank is involved in sales transactions. “The current number of transactions is low; however, we are observing 10% growth each month,” he says.
“ProCredit Bank has over 290,000 clients in Georgia. The demand for plastic cards among our customers has increased in the last few years, and from January 2009 up till now, our clients ordered 34,000 plastic cards, the majority of which are salary cards,” Gzirishvili reveals.
“As of December 31, 2009, Georgian Card had over 7.8 million transaction authorizations,” says Sophio Balavadze, Corporate Communication and PR Manager of Bank of Georgia, one of the leading Georgian banks.
Balavadze states that a customer is not charged when paying with their plastic card.
From the total volume of customers of Bank of Georgia there were over 537,000 cards outstanding, as of December 2009.
“Transaction authorizations by Georgian Card are over 7.8 million as of December 31, 2009,” Balavadze says.
According to the National Bank of Georgia (NBG), during the first 11 months of 2009, 299,304 plastic cards were issued by Georgian commercial banks.
“According to the results of December 1, the total number of plastic cards launched in circulation was 3,855,381. At the beginning of 2009 the number reached 3,556,077,” Kakha Barabadze, Representative of NBG, told The FINANCIAL.
In 2009 KOR Standard Bank issued over 12,000 salary cards, including newly issued and renewed ones.
“We have issued over 5,000 electronic cards and over 7,000 classic cards. The gold cards are occupying the lowest share,” Zura Azarashvili, Head of the Plastic Card Department of KOR Standard Bank, declares.
The fee for cash withdrawals from ATMs of KOR Standard Bank varies from 0% to 0.2%. The withdrawal commission from ATMs of other banks in Georgia varies from 0.5 to 1%, minimum amount – 3 USD.
Azarashvili notes that about 80% of their customers use ATM transactions and the remaining 20% are involved in sales transactions.
“Every fifth transaction is accomplished by card payments,” Azarashvili notes.
“In Georgia it is not possible to pay by card in every shop or outlet, as a result the owners of plastic cards prefer to withdraw cash from ATMs. Customers also face difficulties with technical problems and also the mentality of our customers which has evolved over decades to keep cash in one’s pocket,” Azarashvili explains.
Companies focused on increasing the popularity of online payment are firstly offering lower prices in order to encourage their customers. Recently Georgian Air Company Airzena stated that it was offering exclusive online prices to the destinations of Vienna and Paris: Tbilisi – Vienna – one way – from 149 EUR, round trip – from 280 EUR. Tbilisi – Paris – one way – from 179 EUR, round trip – from 315 EUR.
“The fares are effective only for e-ticketing. The fares are exclusive of airport taxes and fees. Air tickets are available only on our web-site: www.airzena.com,” representatives of the company say.