Government efforts to promote cashless transactions have contributed to the steady growth of the cards and payments industry in Azerbaijan up to 2012. According to Timetric, continued support from the government will help the payment channel grow at a healthy Compounded Annual Growth Rate (CAGR) of 7.74% up till 2017. The number of transactions is expected to grow at a CAGR of 4.32% for the same period.
Government partnerships with card providers are instrumental
The Central Bank of Azerbaijan has undertaken a number of initiatives to promote cashless payments in the country. In May 2013, the government joined Visa for the ‘Life is easier with Visa’ campaign. The campaign is intended to promote electronic payment systems through a variety of promotional activities. According to Visa, card payments increased by 51% in 2012, largely due to growing consumer awareness of cashless payments.
Plans for launching MasterCard contactless cards for retailer consumers are also underway. Timetric predicts that benefits such as no value added tax on card payments will promote the medium amongst users.
An example of a cashless government initiative is the Transport Ministry’s single-card system across public transport buses in Azerbaijan. The project is expected to be launched in 2015 and allows passengers to pay their bus fare with card instead of cash.
The launch of new technology is expected to support the industry
According to Timetric, government plans to introduce new technology will help to provide safe and convenient card payments in the country. Card issuers and service providers are encouraged to embed new technology such as contactless use into cards. All major banks are expected to implement such technology up till 2017 which in turn is likely to drive card use.
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