Bulgaria – Increase in Non-Cash Payments
Bulgaria seems to be pacing fast towards the European practice of money transactions and overall arrangement of financial relations between economic entities. Not long ago a country with limited trust in its own currency, Bulgaria can now boost with an impressive increase of non-cash national-currency transactions used for a high range of money transfers. Bulgarians seem to be getting accustomed to using credit/debit cards for everyday payments as well as for money saving and ATM use.
2014 statistics suggests that credit/debit card payments have increased by approximately 30 % in the first nine months of the year compared to the same period of the previous year. Simultaneously, retail payments have gone up with the impressive 65 %.
Along with the above mentioned tendency we should point out that cash withdrawal transaction have decreased by approximately 16 % on an annual basis and cash purchase ones – by nearly 20 %.
Practically, the use of credit/debit cards is becoming more and more common and is being preferred to cash payments by an increased number of Bulgarians. The reasons behind this trend lie in various areas:
• Foreign tendencies and behavioral patterns (Many European countries have already turned non-cash transactions into a method of everyday payments – these patterns are currently being applied in Bulgaria as well).
• Security considerations (Many Bulgarians start to realize the benefits non-cash payments safety by using virtual money that provides a far greater level of security).
• Intentional promotion and stimulation of credit/debit cards use (Aiming at the expanded use of credit/debit cards and their practical functionality improvement many card issuing institutions have launched campaigns popularizing these types of payments. A series of bonus offers and loyalty schemes were introduced encouraging the use of one or another card type for everyday payments).
Taking into account the great expansion of non-cash operations it is logical to expect this tendency to affect positively the local business processes. Such a stimulus could be very useful since it would contribute to higher overall liquidity of the economy, hence – to increased consumption that could be the key to economic renaissance.