Azerbaijan Launches the New Digital Payment Platform
Posted on Oct 22, 2020 by Kamala Gurbanova, Director of the Payment Systems and Settlement Department, Central Bank of the Republic of Azerbaijan
Over the last few years the payment landscape of Azerbaijan has undergone a major development. The State Program on Expansion of Digital Payments for 2018-2020, which was approved by the President of the Republic of Azerbaijan, was developed to create a strong institutional environment for digital payments and establish an innovative payment ecosystem in the country.
As the result of measures envisaged in the State Program, all digital-related figures increased substantially over the last three years. We have observed volumes and values of domestic POS transactions go up by 3.8 and 2.5 times respectively, values of e-commerce by 7 times, and payments via smartphones by 16 times. Indeed, a huge increase in cashless payments is associated with improved transparency of economic activities resulting from the implementation of the country’s structural reforms.
Many projects aimed at fostering cashless payment behavior among economic agents are presently under the implementation. The project for the development of student ID cards with payment functionalities was introduced at leading universities, and it will be implemented at all educational institutions over the next year. These cards enable students to make all kinds of payments, including tuition fees.
Another project was developed to introduce contactless cards and mobile applications in the major cities’ transportation networks. Through these project-based initiatives the Central Bank of the Republic of Azerbaijan (hereinafter—CBA) has been making efforts to stimulate demand and supply for cashless payments.
The CBA continuously studies developed countries’ experiences to implement the best practices to enhance the shift to cashless payments. We highly benefit from those experiences in designing a regulatory framework for the development of a digital payments ecosystem.
Aligned with one of the main goals of the State Program, the CBA developed the Instant Payment System (hereinafter—IPS), which successfully launched on October 1st, 2020. The main rationale behind this initiative is to respond to the most recent challenges in the field of payment systems and ensure the timely completion of payment transactions among households and businesses within five seconds, making it available on a 24/7/365 basis.
Today, the IPS is one of CBA’s most critical ...
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