The Future is Cashless: Interview with Igor Stepanov – MasterCard Country Manager in Georgia and Central Asia

13 mins read

Q. Recently MasterCard launched a global network for urban co-development, which should improve transportation, transit between cities, and business cooperation. What are the steps MasterCard undertakes to make Tbilisi a Smart City? 

A. Georgia is a progressive country in terms of the adoption of payment technologies (98% of POS-terminals are contactless enabled, 3 banks offer digital wallets powered by MDES platform, and more than 70% of transactions are contactless).

Igor Stepanov – MasterCard Country Manager in Georgia and Central Asia

These numbers indicate that the country, as well as the local banks, are ready to explore other innovations. Tbilisi, as the capital city, certainly has the highest in the market card penetration rate in terms of daily usage. This is due to the fact that it is the political, economic, cultural and tourist center of Georgia and a fairly large part of the population lives in this city – around 1.1 mln out of 3.7 mln. total inhabitants. This, in turn, attracts many businesses and merchants to the area. For years, residents of the capital have used various payment options(bank cards, stickers, etc.) to pay for public transit. In 2018, one of the country’s leading banks, Bank of Georgia, upgraded payment terminals throughout the public transport system, thereby allowing to pay for rides using cards issued by other banks, including foreign banks. Georgia is a country that is quite welcoming to tourists, and such solutions help foreigners travel within the country with maximum simplicity and comfort. Q. What are other opportunities for Tbilisi to move forward towards the Smart City concept?

A. Transportation is one of the main areas fueling the transformation of Tbilisi into a Smart City. However this is not the only one. There are many other ways we can leverage the capabilities of payment card to bring even more benefits and convenience to citizens. They include such solutions as digital IDs, school and campus cards, as well as cards for retirees or medical cards.
A card for retiree includes payment and non-payment functionalities. For instance, it stores information about the cardholder’s hospital records, including doctor appointments and medical prescriptions. The pharmacist can easily access the prescription scanning this card and see what medicine the customer needs. Moreover, the cardholder automatically receives all social discounts, entitled by the government. The same technology is also applied for student cards. A Unified Card can be both a payment tool and an electronic student ID, which gives access to the campus, electronic university library, and provide access to the app where the timetable and grades are displayed. All these solutions are created and offered by MasterCard. We are open to cooperating with banks and government organizations to implement such solutions for the community.

Q. The number of MasterCard cards in Georgia increased dramatically over the last two years due to the active promotion at local Georgian banks. What are the main advantages offered by MasterCard to the local financial institutions?

A. First, I would like to note that without our partners – Georgian banks – we would not achieve these results. MasterCard now is the leader in the Georgian market according to the National Bank of Georgia data.

We, at MasterCard, have been working hard to provide the consumers with a safe and secure payment tool, and to make every cashless payment as simple and convenient as possible. In this regard, we can mention new technologies related to biometric identification, which will allow users to get rid of the long list of passwords and PIN codes. You will only need your fingerprint to confirm the payment, which makes the process even more convenient and safer.

We also engage cardholders through various promotional campaigns, both national and local. MasterCard sponsors major global sporting and entertainment events (UEFA Champions League, the Cannes Film Festival, the BRIT Awards, Disney World, etc.). Together with local banks, we offer priceless experiences to cardholders, who actively use their MasterCard cards to make purchases. In addition, MasterCard offers exclusive benefits for premium cardholders, including MasterCard Concierge service and access to MasterCard business lounges at international airports around the world – Tbilisi, Batumi, Kiev, Moscow, Prague, Budapest, Bucharest, Prague, Vienna, etc. Concierge service offers an array of assistance – ranging from minor things, like ordering a taxi, to much bigger ones, like planning the whole trip or event.

Q. Tell us about the habits of MasterCard users in Georgia.

A. This is where things get quite interesting! Georgia is one of the markets, where contactless sticker is the most popular payment tool. These are small stickers that can be stuck to anything, but most often to the back of any mobile phone. This preference motivates merchants to install more POSterminals that accept contactless cards. The share of contactless enabled POS-terminals has already reached 98% of the market. What benefits does it bring to consumers? Convenience, speed, and security. How does it improve Georgian economy? It increases the number of cashless payments. With such a strong network throughout the country, banks are interested and willing to offer their clients innovative solutions, such as mobile wallets, that store a digital version of the card on the smartphone.

MasterCard has its own MDES platform, which helps transform any connected device into a commerce device to make and receive payments. The MDES platform is helping power Apple Pay and other global digital wallets. If we talk about popular places for card payments, they include grocery stores and supermarkets, cafes and restaurants (including fast food), pharmacies and gas stations.

This suggests that the cards have become an integral part of Georgians’ everyday life.

Q. What is the development strategy of MasterCard in Georgia and plans specifically for 2019?

A. Next year will be a special year for MasterCard in Georgia – we will celebrate 20 years of doing business in this market. We plan to continue pursuing our strategy and offer new opportunities to push out our main competitor – cash. The decrease in cash flow and the transfer of cash to cashless format has a positive effect on the country’s economy. Innovations will play a big role, and we are working together with banks to bring to the market the latest innovations – from contactless solutions to biometric identification technologies. We also work on introducing new technologies for making quick peer-to-peer money transfers (this is where cash still rules). One of the important areas of work for MasterCard is promotion of financial literacy. We work together with the National Bank of Georgia to achieve this goal. Promoting cashless payments, spreading knowledge about how payment technologies help manage finances, improving the quality and standard of living, and saving for the future are all important topics for everyone. In our 20th anniversary year, we plan to run special promotional activation campaigns for consumers, which, I am sure, will arouse interest and involvement from all MasterCard cardholders in Georgia.

Q. What are the main differences between habits of MasterCard users in Georgia and other East European countries?

A. Georgia is a very innovative country, where the share of contactless transactions is fairly significant. One area that has untapped potential is the segment of micro-merchants. In Europe, even very small private company accepts cards. In Georgia, we are still working to achieve this result. Another market for potential growth is mobile commerce. It allows cardholders make payments and purchases directly through a mobile phone. This trend is actively spreading throughout Europe – our recent survey showed that already 80% of the European citizens use their mobile devices for making purchases. Georgia is not quite there yet. But rest assured, it is just a matter of time.

Q. What do you see for the E-commerce development perspective in Georgia?

A. Georgia has a fairly developed electronic payments sector, and the main reason is due to the banks. We all know that thanks to the Internet or mobile banking, we can pay for almost all possible services that are in Georgia. However, from the point of view of direct online commerce in Georgia, there is still a great potential for development. So far, the number of online stores, where it would be easy to buy, for example, appliances, clothing, or any other goods, is not yet popular in this country, although the global trend says that all purchases are being transferred from offline to online. There is room for development for everyone, and I think that Georgia is just opening the door to these prospects. This type of commerce is more cost-effective, both for merchants and for consumers (there are no margins related to renting retail space, paying consultants, etc.). And people, as we see, are willing to sacrifice the ability to “touch” a product before buying it in order to save money and time.

Q. MasterCard held a national promo campaign for MasterCard cardholders. Can you tell us a bit about the campaign? Do you consider it as successful?

A. Yes, indeed, we created this campaign precisely to show consumers that paying with our cards is not only easy and convenient but can also create benefits.

The idea of the campaign was simple – when paying for purchases or services, MasterCard cardholder automatically participated in a giveaway, with the top prizes including three cars. We launched the campaign in early November and it continued until December 31, 2018. In addition, to the cars, you could also win many smaller, but no less uninspiring prizes. Information was available on our official site promo Within the next year, we plan to launch our official Facebook page. MasterCard conducts such initiatives in Georgia, both independently and jointly with banks. So, I suggest that you get your MasterCard and pay with it as often as possible because every transaction you make increases your chance to win the top prize. Next year, I promise, we will continue to surprise MasterCard cardholders with new and interesting campaigns.

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