A public discussion of the draft “State Program on the Expansion of Digital Payments in the Republic of Azerbaijan for 2018–2020,” prepared by the Central Bank, was held at the Center for Analysis of Economic Reforms and Communication (CAERC).
The discussion was opened by Vusal Qasimli, Executive Director of CAERC. He noted that the development of cashless payments through e-government, e-commerce, and e-banking contributes to improving the business environment and increasing efficiency, which is the main objective of the economy. The Strategic Roadmap for the Development of Financial Services in the Republic of Azerbaijan also states that there are broad opportunities to expand cashless transactions that support financial inclusion.
Vusal Qasimli added that according to international reports, if Baku, which is included in the list of the “world’s 100 cashless cities,” fully transitions to a cashless economy, the estimated total additional income could reach 1.9 billion USD, including 0.1 billion USD for consumers, 1.4 billion USD for businesses, and 0.4 billion USD for the government. As a result of this process, employment could increase by 3.5 percent over 15 years. He also emphasized that a professional team was involved in preparing the draft State Program and that the document could play an important role in implementing the Strategic Roadmaps and applying strategic governance in the country.
Alim Guliyev, First Deputy Chairman of the Central Bank, stated that expanding cashless payments has always been a priority for both the Central Bank and the Government and remains highly relevant today.
According to him, the “Strategic Roadmap for the Development of Telecommunications and Information Technologies in the Republic of Azerbaijan,” approved by Presidential Decree dated December 6, 2016, assigns a specific task regarding the expansion of digital payments. Based on this mandate, the Central Bank, in cooperation with the international card organization MasterCard, conducted extensive analytical assessments and diagnostics to identify factors hindering the development of digital payments in the country. Proposals prepared based on international experience were discussed with relevant government institutions, service providers, banks, and other stakeholders within the working group. With the involvement of international experts and the Institute of Economics of the Azerbaijan National Academy of Sciences, the draft State Program for 2018–2020 was developed.
The strategic objective of the Program is to significantly expand non-cash transactions in the economy, minimize the scale of cash payments, strengthen the financial resource base of the banking sector, and reduce transaction costs associated with cash circulation.
Selin Bahadirli, Head of MasterCard Advisors for Southeast Europe, presented the results of a fundamental analysis of factors driving the cash economy in the non-oil sector, the current state of financial markets, and institutional barriers hindering the development of cashless payments. The draft State Program, prepared as a result of the project, identifies four main directions: further improvement of the institutional environment for digital payments based on advanced international practices, revitalization of the banking sector, formation of a digital ecosystem, and awareness raising and promotion of digital payments. Within these directions, 18 priorities and more than 60 measures have been defined.
Following extensive discussions, it was decided that the draft State Program would be revised, taking into account the proposals and recommendations presented. Additionally, proposals were put forward to develop mechanisms for supervision, monitoring, and overall project management of the envisaged measures.