Global payment solutions such as Apple Pay and Google Pay were successfully introduced in Azerbaijan due to the availability of modern infrastructure supporting contactless payments in places widely used by the country’s population, the Head of the Expert Group on Payment Systems and Digital Banking of Azerbaijan Banks Association (ABA) Tamerlan Rustamov told Trend.
According to Rustamov, the introduction of contactless bank card payments in public transport and the use of the mentioned technologies in the country will be a successful step towards the development of digital payments.
“It’s important that digital payment platforms provided by fintech companies support payment technologies such as Apple Pay and Google Pay. Besides, the decision of the Central Bank of Azerbaijan on the direct exchange of information on card transactions within the country with card organizations operating outside the country isn't accidental,” he said.
"In the first half of this year, the total volume of transactions made with payment cards in the country amounted to 24.6 billion manat ($14.4 billion). Of these, 9.9 billion manat ($5.8 billion) accounted for non-cash payments. The share of non-cash payments using cards within the country amounted to 40.4 percent,” the expert noted. “According to the International Telecommunication Union, in our country, there were 104.5 mobile phones per 100 people in 2021. Payments in the amount of 121.3 million manat ($71.3 million) or 6.9 million transactions were made via Apple Pay for six months of the current year.”
Besides, according to Rustamov, given the fact that mobile phones are an integral part of everyday life, the widespread use of Android phones among the population plays an important role in the development of digital payments, including the launch of Google Pay.
"For the successful implementation of each payment solution, an appropriate infrastructure must be formed. Today, 72 percent (or 43,919 units) of our country's POS-terminal network accept contactless cards,” he further said.
“Also this year, as a result of the joint activities of the Central Bank, international payment systems and banks, for the first time in the country, the possibility of using smartphones as POS terminals was created, and the corresponding legislative framework was formed. This step will have a positive impact on expanding the infrastructure and improving the usability and formation of a network of POS terminals," he added.
The expert pointed out that the successful implementation of the 'Strategy for socio-economic development of Azerbaijan for 2022-2026' will create a new model for socio-economic development and will determine a new qualitative level of multidisciplinary development in Azerbaijan.
According to him, this strategy has set a goal to annually increase the share of non-cash payments in total turnover by five percent.
"Strategy for the development of non-cash payment for 2021-2023, implemented by the Central Bank of Azerbaijan, can be called a catalyst for the ecosystem of digital payments. Within the framework of this strategy, the adoption of the bill on payment services and payment systems, the introduction of the ISO 2002 standard, the preparation of unified API standards, and the creation and commissioning of the Know Your Customer (e-KYS) electronic system are considered," Rustamov said.
He stressed that as part of the strategy for the development of non-cash payments, progress has been made.
"Thus, the tasks for the share non-cash payment cards in the total turnover, non-cash circulation with payment cards, set for 2023, have already been achieved," the head of the expert group stated.
According to Rustamov, in order to build a competitive, innovative and comprehensive ecosystem of digital payments, it's necessary to create a new legislative base for digital banking.
"It's also required to support contactless payments in public transport, approve non-cash payments in a number of areas, strengthen the positions of fintech companies in financial markets, and apply a new approach to regulating rates for services in the field of digital payments," he concluded.