The FINANCIAL -- MasterCard believes that mobile will be the new era in payments and Georgia seems to be catching up with this trend as well with a set of very good implementations, according to Hakan Acar, Country Manager, Emerging SEE Markets, MasterCard.
“Georgia has done a great job with contactless payment and has already inspired many markets. This country is proof of the concept with its fast adaptation in contactless cards and the community is very used to mobile banking and e-commerce as well. I also believe we will lever from big data and cloud solutions more often in the near future and wearable technologies will open new horizons in payment industries,” Hakan Acar told The FINANCIAL.
Despite the latest improvements such as development of internet technologies and e-commerce, MasterCard observes that cash is still dominant in payments in Georgia. Hakan Acar considers that having a supportive legal environment empowered with advanced technology, and a visionary mindset, is very important for the Georgian payment system. “I believe that Georgia has the combination of all and I am pleased to see the eagerness of further development in this regard in every stakeholder. On the other hand consumer education is essential to demonstrate the benefits and motivate usage,” he said.
“I expect to see a shift from cash to payment cards in the mid term with the new products and services that will be developed based on the facts that we see out of the MasterIndex survey. The development in payment systems brings many benefits like transparency in economy, efficiency and cost saving of public funds, facilitating economic growth and creating convenience for citizens,” Acar added.
Q. In your opinion, what are the motivations or barriers for using payment cards in Georgia?
A. Georgia is a fast-developing market and offers various options for consumers, however, we believe there is still a way to go for cash displacement and the customers should be offered more sophisticated card programmes that will match their needs and motivations. I believe we need to know better about our consumers, who they are, what they like, what they care about, what their real needs are, and how we can add value to their lives by using our products. This was our motivation when we first conducted the MasterIndex survey and we always take into consideration the results of these surveys while designing new products for our customers.
During the last two years, the Georgian market has evolved significantly and many innovative products have been launched that will ease the daily life of customers and encourage more card usage. Contactless cards especially have been in the centre of this evolution with a steadily increasing number of cardholders and acceptance points including transit. I believe that Georgian banks have also been doing a great job in mobile and internet banking during recent years and have launched services that make banking services and payments more convenient than ever.
Q. The research showed that more than half of the population possesses banking cards. What has caused this tendency?
A. We believe that this is mostly driven by the pension and salary card programmes as the majority of customers don’t intentionally apply to a bank to get a debit card. Due to these programmes card penetration is good when compared to similar markets however the main challenge is actually shifting these people from cash usage to POS.
Unlike debit cards, credit card products are not as common as other markets in Georgia and I believe the improvements in payment systems are attracting more people day by day as they are offered better products. I expect this trend will continue.
Q. Cash payments are reducing in parallel to increasing card payments. What is your opinion, how well does the contactless payment system work in Georgia?
A. We are happy to observe that contactless cards achieved a direct impact on card usage behaviour in a positive way. Cardholders are enjoying the convenience of MasterCard contactless cards in many merchant locations like transit, supermarkets, fast food restaurants etc. It is a common fact in many markets that contactless cards drive people to use their card more often and in more locations where they have not even considered using their cards before and we see the same trend in Georgia, which is amazing.
However, electronic goods stores, home appliances stores and furniture stores remain the places where cash is still largely dominant compared to other payment methods. The critical point is the source of cash for these payments and most of the time it is a consumer loan. I believe that cash dominance in these types of high ticket value merchants are due to a lack of budget-friendly payment card products in the market and we are working on an innovative solution to address the needs of consumers and merchants in this regard.
Q. What are the consumer’s needs in payment systems in Georgia today?
A. The Georgian market is very good at implementing new technologies and innovations, however, we also need to encourage people to use their cards more often by developing loyalty programmes based on their needs and expectations.
Q. In your opinion, are Georgian banks oriented on innovations? Why do you think so?
A. Actually the world is going in this direction. For the last 15 years we have observed significant change in the social lives of people as technology develops and the banking industry has to adapt itself to stay up-to-date. I believe that Georgian banks are in the right direction to follow this trend.
Q. In terms of contactless cashless payments Georgia is the leader of 17 countries in Visa’s CIS-SEE region. What about MasterCard?
A. We are very much satisfied with our results in Georgia. The majority of our cards in Georgia are equipped with contactless technology and our cardholders can enjoy the convenience of contactless payments in public transportation as well as many other locations, which makes MasterCard unique for the consumers in Georgia.
Q. What is the potential of a cashless economy globally and in Georgia? What is its importance in today’s world?
A. Cash displacement is one of the hot topics for many countries in the world. The governments are focusing on this area due to its obvious benefits such as reduced costs in efficiency, transparency, and financial inclusion of citizens. Cash is estimated to cost around 0.5 percent to 1.5 percent of GDP and we believe our solution is assisting the governments to save public sources.
Q. How would you assess your business in Georgia?
A. Georgia is one of our priority markets in this region and we are very happy to bring our global expertise to Georgia to develop payment systems in this market. We are working very closely with local banks to implement new innovative projects that will bring value and facilitate commerce in the country. The most encouraging thing for us is to see how our efforts are very much appreciated by all local stakeholders and we are cooperating very closely with them.