By Mirsaid Ibrahimzade
Non-cash payments facilitate the transparency of the economy and the Ministry of Taxes works very closely in this sphere with partners, Azerbaijani Taxes Minister Mikayil Jabbarov said at a meeting of the Azerbaijani Parliament.
Jabbarov noted a decrease in the share of money supply in December 2018 to 51.9 percent compared to the same period in 2017, when the figure was 60.1 percent. The minister said that this precisely demonstrates the dynamics in the payments market.
He also emphasized that the number of POS terminals dropped from 80,301 to 67,032, by 16 percent in comparison with 2016, and that today there are 6.7 million payment cards in circulation.
“The main question is which of the market participants is most beneficial – owners of retail outlets, banks or citizens?” the minister noted.
Further, Jabbarov said that attention needs to be paid to a number of factors in order to answer this question. Among the factors he mentioned, in particular, determining the sizes of commissions. Jabbarov said that currently, in Azerbaijan, the size of the commission when paying by POS-terminals varies in the range of 1.29-2.37 percent while this figure stands at 1.5-2 percent in neighboring Georgia, 1.5-2 percent in the UK, 2-2.5 percent in Italy, and 2-3 percent in Russia.
The minister noted that Azerbaijan’s expenses on commission and tariffs are comparatively lower than in other countries, and the government does not affect this in any way.
As for the non-cash payments which are considered part and parcel of market payments in developed countries and e-commerce in Azerbaijan, it is important to note that President Ilham Aliyev approved the state program to expand digital payments in 2018-2020, in September of 2018, according to which in 2021 the annual amount of cashless payments in Azerbaijan will reach approximately 17 billion manats ($9.97 billion).
Implementation of the program will allow increasing the share of non-cash payments annually by seven percent. The share of cash payments in transactions carried out in the economy will fall from 74 percent to 40 percent.
To speed up the implementation of the state program, three fundamental conditions and specific goals for each of them were defined. Creating a more supportive environment involves not only prohibiting regulations, but also the use of special incentive mechanisms.
In general, volume of non-cash payments through Azerbaijan’s national payment system reached 274 billion manats ($161.22 billion) in 2018, which is 32 percent more compared to the figures from the previous year.
The share of cash payments made up 52 percent, which is 8 percent less than the figure for 2017.
Mirsaid Ibrahimzade is AzerNews’ staff journalist, follow him on Twitter: @MirsaidIbrahim1
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