The FINANCIAL -- Visa payment volume in Georgia increased by 15% in Q2 2014 over the same period last year. Georgia continues to lead the Caucasus region in terms of Visa cards issued by the partnering banks when compared to its neighbouring countries in the region. Visa payWave contactless payments is another prominent accomplishment reached by Visa in Georgia. mPOS, Visa payWave and e-commerce will be the most prioritized directions for Visa Inc. in Georgia during the upcoming period.
“The main indicator is when we measure the quality of card business – how frequently or how massively cards are being used, is a payment volume growth. Comparing Q2 of 2014 to Q2 of 2013 payment volume in Georgia grew by 15 %. In Azerbaijan it was 29% and in Armenia - 26%. We rate these numbers positively. We see that it is not just the volume itself, but also the number of transactions that is growing and the frequency of card usage means that card payments are becoming a daily habit,” Irina Kamkhadze, Visa’s country manager for the Caucasus, told The FINANCIAL.
According to the data of the National Bank of Georgia the number of transactions in Georgia was 7,999,604, worth GEL 963,840,000, as of September 2014, up from 6,036,481 units, worth GEL 807,327,000, in the prior-year period.
Significant growth has been shown in internet transactions as well. 1,171,912 transactions were made by September 2014, worth GEL 45,247,000. Meanwhile, the figure was 858,436 units, worth GEL 31,517,000, during the same period of the previous year.
The number of ATMs in Georgia amounted to 2,166 as of September 2014. The same figure was 2,040 in September 2013. Growth has been shown in the number of POS terminals. There were 12,891 POS terminals in September 2013, while the figure reached 15,545 this year.
“Visa is a company which is at the core of delivering business through financial institutions. Worldwide it has 14,400 financial institutions and clients. So we encourage them to use the capacity we have through the multiple types of platforms. We are providing a global scale whileconsidering the local needs. What I mean here is that we have a variety of products to offerdebit, credit, pre-paid and commercial products,” said Kamkhadze. However, a system of copy-and-paste does not work. Finding an individual approach for each client bank and via a bank to a customer is what the company deems its top priority. “We strive towards considering the needs and priorities of our clients and partnering banks. We provide the product, service or acceptance solutions to enable either growth of a number of cards and their acceptance or both of these. The payment volume, and the spending habit of using cards is growing double digit. The percentage of growth is different, but it’s always an upward trend because it is supported by the multiple activities that we do in the Caucasus regionlike for example national marketing campaigns” said Kamkhadze.
According to Kamkhadze, the target of Visa in Georgia is to encourage all the banks to promote card transactions among their customers. All the banks issue cards and their common goal is that the cards are being used. She asserts that with passive cards or their rare usage commercial banks will earn less money. To help bank to meet this common goal – which is card activation - Visa offers various campaigns for cardholders, talking about market level campaigns like, for example, FIFA 2014 national marketing campaign run this year.
“The whole world is gradually switching to electronic payments. It is no longer something that is rare. More and more countries are striving to become cashless and there’re economic reasons behind this drive. Electronic payments have a positive impact on the economy. This has been proven by various studies run worldwide. The recent study of Visa has been made with Moody’s analytics. They examined 56 countries, among them were emerging markets as well as well-developed. The research has shown that the growth in the use of electronic payment products, such as credit and debit cards, added $983 billion to the Gross Domestic Product (GDP) of the 56 countries examined between 2008 and 2012. The study concluded that increased credit and debit card usage contributes to economic activity by reducing transaction costs and improving efficiency in the flow of goods and services.” Kamkhadze told.
The popularity of Visa products varies per country. The direction is similar in terms of acceptance infrastructure, innovation, and bringing new means of payment. The mobile POS together with contactless Visa payWave will be prioritized directions for Visa in Georgia during the coming year.Beyond that we will certainly think about a specific action related to e-commerce development.It is extraordinary to think that, just 20 years ago, eCommerce did not exist. Today, in many countries, it is becoming the preferred way to shop. Georgians are very active not only in payments at points of sales but also actively transacting on-line, and we need to do more in this direction. Security innovations such as Verified by Visa, in concert with well-designed eCommerce transaction authorization policies, allow Banks to gauge risk accurately and quickly, which not only protects Visa cardholders from online fraud but can also substantially drive spending and positive cardholder experience,” said Kamkhadze.
“The readiness of people to make the next step towards progress and innovation by new means of payments is obvious. Georgia is a clear example of a country where cardholders are ready to embraceinnovations and adopt them easily. Take contactless for example. Georgian Visa cardholders are proving that convenience through payment which is fast, easy and reliable, is applicable for daily usage. And it’s not only for cardholders, but merchants as well. As of October 2014, penetration of Visa payWave transactions vs. all transactions at points of sales in Georgia reached 14,8% - a solid achievement since active Visa payWave cards issuance started in Georgia - as a comparison, in advanced markets Visa payWave cards penetration is about 23% in Singapore and 56,5% in Australia). The convenience and speed of Visa payWave has improved the shopping experience for consumers and retailers alike. Because without merchants accepting contactless the whole chain wouldn’t work. In everyday segments like grocery, supermarkets, petrol stations, fast-service restaurants we see a growth of transactions. Visa payWave became an instrument to drive not only innovations, but more importantly, usage of cards. I am confident this trend will grow. Millennials are our future in banking, those who are easy and fast adopters of new technologies. In June 2014 was launched a bridging solution between contactless card and NFC (Near-Field Communication) payments – a Visa payWave sticker. A sticker is perceived as one of the steps when you need people to adapt, to start using mobiles not only for calling or texting but also as a payment solution. This is payment cards usage transformation and we are going through it,” she said.
“The growth will not be possible without the involvement of regulators. Regulators oversee the banks, they partner with payment systems and without true partnership no one in this ecosystem of electronic payments will succeed. And the partnership means that we would like to understand what the vision is, what their goals and priorities are and where we as Visa can assist and cooperate. Like with the event we recently had in Tbilisi – Caucasus Law Enforcement workshop. This was an initiative of the National Bank of Georgia and Visa conducted this workshop for three countries of the Caucasus, Azerbaijan, Georgia and Armenia. We brought together banks, law enforcement and central banks’ representatives of three countries to talk about risk – how we should cooperate to mitigate risk issues in certain areas of electronic payments and how we do all this by joint efforts. The dialogue is becoming more productive because we’re talking to main participants of payments eco-system all together. Day-to-day and further cooperation continues and we at Visa are ready to share worldwide expertise to contribute to electronic payments development in cooperation with the regulators and Bank-partners.” she said.
“I believe that Georgia is very-well positioned for a dynamic growth of electronic payments and cashless society”, she added. Kamkhadzealso maintained that migration to electronic payments is an ongoing process. We are not mandating anything, we are taking direction towards co-developing cashless society for people who prefer paying by Visa cards over all the times paying only by cash.When you do your daily shopping at supermarket will you use your Visa card, when you go to lunch will you be paying with your Visa card, or when you fill your car - will you be using your Visa? Visa is positioning itself not as a seller of its products but rather as a partner to Banks, Regulators, Merchants, as a contributor and facilitator of developments towards driving electronic payments, in Georgia and in over 200 countries globally, to be the world's best way to pay and be paid for everyone and everywhere.” Kamkhadze told The FINANCIAL.