Azerbaijan's PASHA Bank talks developing trends in local financial services

Economy Materials 1 June 2022 13:38 (UTC +04:00)
Azerbaijan's PASHA Bank talks developing trends in local financial services
Sadraddin Aghjayev
Sadraddin Aghjayev
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BAKU, Azerbaijan, June 1. The need for e-commerce and cashless payment services has significantly increased against the backdrop of the COVID-19 pandemic, Board Member of Azerbaijan’s PASHA Bank Jalal Orujov told Trend.

According to Orujov, there were certain projects in this direction even before the pandemic, but the challenges and conditions required speeding up the implementation of these solutions.

“Companies offering innovative solutions for small and medium-sized businesses, as well as a package of services enabling to accept and make non-cash payments were created. Besides, the trend of electronic wallets has begun to actively develop in Azerbaijan. These solutions mainly represent fintech startups, with banks playing a secondary role as a provider,” he said. “Moreover, in recent years, measures have been taken in Azerbaijan to cover the population with banking services. Today, most of the country's population is covered by financial services: almost all employees have payroll bank cards, and pensioners have pension cards.”

The bank’s official further said that payment through mobile phones creates long-term opportunities for the complete refusal of the usual plastic cards.

According to him, in recent years there has been formed a trend of the Open Banking development in Azerbaijan.

"The lack of an appropriate regulatory framework today prevents the country's banks from implementing ideas based on the Open Banking. Our bank and some others have already launched some activities in this direction,” Orujov noted. “In fact, Open Banking contributes to the emergence of new fintech startups which can provide more convenient banking services to the client. Open Banking releases the banks from the necessity to create these solutions, which is its positive feature. This trend will really develop only after the adoption of regulatory documents by the relevant authorities.”

“The most important thing is that the implementation of this initiative will create market competition both between banks, and service providers of banking services," he stressed.

Besides, according to the bank’s board member, two more trends have widely spread.

“These include the growth of online payments and the use of bank cards not only for cashing out funds but also for their use in paying for goods and services through POS terminals. PASHA Bank isn't very active in consumer lending in the retail segment, but we have the largest network of POS terminals,” Orujov said.

“Our bank is also the largest acquirer (provider) of POS terminals in Azerbaijan. In 2020, the turnover of non-cash payments in our network amounted to nearly 1.6 billion manat ($940 million), and in 2021 - 2.8 billion manat ($1.6 billion), and this trend continues this year. In the first quarter of this year, the turnover increased by 20 percent," he added.