Financial services

PASHA Bank foresees the growth of non-traditional financial services players in the Azerbaijani market

By trend

The need for e-commerce and cashless payment services has increased significantly amid the COVID-19 pandemic, PASHA Bank Board Member Jalal Orujov said in an interview with Trend.

He noted that there were already some projects in this direction, but the challenges caused by the pandemic required the acceleration of the introduction of these solutions.

“Companies have emerged offering innovative solutions for small and medium-sized enterprises (SMEs), as well as service packages for accepting and making non-cash payments. In addition, there has been a recent trend in Azerbaijan towards the use of electronic wallets.These solutions mainly represent fintech startups, with banks playing a secondary role as the provider.

In addition, in recent years, steps have been taken in Azerbaijan to cover the population with banking services. Today, it can be said that most of the country’s population is covered by financial services: salaries and pensions are provided by bank card. I also want to point out that the popularity of mobile phone payments creates opportunities to completely stop the use of typical plastic cards in the long term,” Orujov said.

According to him, a trend of development of “Open Banking” (Open Banking) has been observed in Azerbaijan in recent years.

“The lack of a proper regulatory framework currently prevents banks in the country from introducing ideas based on Open Banking. Our bank, in particular, and some other financial institutions are doing work in this direction, but very limited. In fact, Open Banking would contribute to the emergence of new fintech startups capable of providing banking services in a different and more convenient format for the customer. The positive impact of the introduction of Open Banking is that the banks will not have to develop these solutions themselves.

I believe that this trend will only really develop after the competent authorities have approved the regulatory standards relating to it. The most important thing is that the implementation of this initiative will create market competition not only between banks, but also between banking service providers,” Orujov stressed.

In his opinion, two other trends have gained momentum in recent times.

“These include the increase in online payments and the use of bank cards not only to collect funds, but also to pay for goods and services through point-of-sale terminals. PASHA Bank does not is not very active in consumer lending, but we can say that we have the most developed network of POS terminals. In addition, our bank is the largest acquiring bank in Azerbaijan. If we compare the results of 2020 and 2021, non-cash payments revenue in our network is approximately 1.6 billion manats ($941.1 million) in 2020 and 2.8 billion manats ($1.6 billion) in 2021. The upward trend also continues this year, so according to the results of the first quarter of this year, the turnover increased by 20%,” Orujov said. .

Orujov said that this summer a Google Pay contactless payment solution will be launched in Azerbaijan, which will allow making payments using mobile devices running on the Android platform.