The FINANCIAL — 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 card 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 interview with The FINANCIAL banks stated that Georgians prefer to withdraw cash from ATMs and pay by cash rather than use POS terminals.
“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 case was the same with ATMs. “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 since January 2009 up till now, our clients ordered 34,000 plastic cards, the majority of which are salary cards,” Gzirishvili reveals.
Currently ProCredit Bank issues three types of Visa cards – Visa Electron, Visa Classic and Visa Business, and two types of MasterCard cards – Maestro and Standard. “Based on our target group – small and medium-sized businesses, ProCredit banks group-wide do not offer Gold cards,” Gzirishvili notes.
“It is a priority for ProCredit Bank to offer its business clients the products and services that best fit their business needs. At the beginning of 2009 ProCredit Bank introduced a new product – the Visa Business Card. This card enables business entities to manage the company card account. Business Card holders can use it as a convenient tool for payments for goods and services. It can also be used for ordinary transactions such as withdrawal of cash from ATMs and banks’ POS terminals, conversion of currency and other financial operations related to their business. The Visa Business Card is very handy when, for instance, company employees are on business trips, also, when making purchases or payments electronically on the company’s behalf, organizing or hosting events, and incurring other business expenses,” Gzirishvili declares.
The significant growth of plastic cards, compared with previous years, in ProCredit Bank, was observed in 2009. “The Bank started issuing salary cards in 2005, and since then the demand has been increasing. Today more public agencies and private companies pay salaries using plastic cards,” Gzirishvili says.
Since 2004, when ProCredit Bank started issuing plastic cards, the bank does not charge their customers any fee for GEL withdrawals from the ATMs of ProCredit Bank Georgia. USD withdrawals cost 0.3%.
The withdrawal commission from ATMs of other banks in Georgia is 1%. The minimum amount is 2.5 USD, and those in foreign countries – 2%, minimum amount – 3 USD.
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.
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