Baku – APA-Economics. “One of important segments of modern financial infrastructure National Payment System provides settlement of accounts among the economic entities quickly and usefully”, First Deputy Chairman of Management Board of the Central Bank of Azerbaijan (CBA) Alim Guliyev told APA-Economics.
According to him, the National Payment System, which operates safely and effectively, attaches importance in financial stability and economic development: “Existence of Wide-range and innovative payment structure increases access of economic entities to the financial services and improves their consumption. It’s not accidentally that taking into account development cashless accountings and socio-economic significance of extension of coverage, the head of state issued several decrees and orders in this sphere”.
“Popularization of development of the cashless payment and usage of e-payment services expands resource base of banking system, increases economic capitalization and influence of monetary policy on economy. The National Payment System p[lays an important role in financial stability, effective monetary management and deep financing of economic growth. According to Moody’s reports, development of e-payment during past 5 years allowed $1 trillion of additional GDP and 2 mln new jobs in the global economy. Development of e-payment increases GDP 0.3% in the Developed Countries, 0.8% in the Developing Countries”, he said.
“CBA is a state body providing creation of e-payment systems, as well as settlement of accounts and clearing systems and organization of their activity. As a result of intentionally reforms conducted by the CBA during past years, a National Payment System was established in the country. AZIPS (Azerbaijan Interbank Payments System), (large sum and express payments system) has been in operation since 2001, XOHKS (low-value settlements and clearing system) – since 2002. Operation of these systems allowed full electronization of interbank settlement of accounts.
Moreover, in order to extend the infrastructure of National Payment System access of population and economic entities to the financial services in the region, the CBA implemented Azerpoct project jointly with the Ministry of Communication and High Technologies.
As of July 1, 2015, 43 banks with 926 branches and departments, Azerpoct with 1,163 branches and departments providing financial services and 157 non-banking credit organizations operate in the country and these are main infrastructural elements of the National Payment System.
As of July 1, 2015, number of issued payment cards makes around 7 mln. Currently, there are AzeriCard LLC and MilliKart LLC and processing centre of 7 banks in the country. Totally 2,716 ATMs and 78,391 POS-terminals operate across the country.
24 banks provide internet banking, 15 banks – mobile banking services. The banks are working on increase number of services on e-banking, issuance of contactless payment cards, installation of modern payment terminals.
However, despite these opportunities and achieved results, cashless payment circulation is lower than other countries (cashless payment circulation/GDP ratio - 2.2 times in Azerbaijan, 70 times in the Developed Countries, 25 times in the Developing Countries). Cashing level in the country is high (58% in Azerbaijan, 15-20% in the Developed Countries and 30-35% in the Developing Countries). 92% of operations with the payment cards makes withdrawal of money from ATMs (70% in the Eastern Europe, 50% in the developing countries).
Regarding Government Payment Portal, utility organizations, 12 state bodies engaging in collection of budget funds, as well as 5 operators providing stationary and mobile communication services have been integrated to this infrastructure.
During 7 months of 2015, the system processed 16.1 mln payment transactions with the total sum of AZN 793.5 mln, relevantly up 6% (0.96 mln transactions) and 26.5% (AZN 210 mln).
Along with organization of stable and reliable activity of the National Payment System, we also pay attention to development of its key components in the international payment systems sphere. At the same time, the processes in the global economy are followed, preventive measures are taken to provide independence and security of payment systems.
One of main measures in this direction is a project of “Modernization of National Payment System”. As a result of works conducted within the project, along with the international infrastructures, AZIPS started to operate via Local Telecommunication Network created by the Ministry of Communication and High Technologies. At the same time, CB’s “Centre of Bank Certificate Services” are already used for provision of information security. At the next stage of the project, XOHKS functional opportunities will be improved and allow to conduct operations via directly debiting payment instrument. Information security will be provided by using national products. Along with these measures, CB’s reserve centre structure will be improved on the basis of relevant standards.
Another measure is a project of creation of “National Network on Card Payments”, which is for provision of processing of information on operations conducted via payment cards inside the country. As a result of the works, an interface will be created among the infrastructures of all card organizations engaging in processing and processing of operations with the payment cards issued in the country will be conducted via newly-established infrastructure. Realization of both projects attaches importance to provide safe and effective activity of payment systems, increase of effectiveness of cashless settlement of accounts.
Central Bank continues its activity for popularization of payment services market and usage of e-payment services. It has developed a draft law on “Payment services” in order to extend accesses to payment services, strengthen competitiveness in payment market and increase the defence of payment service users. This draft law, developed on the basis of analyze of the international practice, defines payment services, duties on these services, establishment of payment organizations and e-money organizations and economic, legal and organizational grounds of their activity. While developing this draft law, opinions and proposals of international financial organizations, as well as relevant state bodies have been taken into account. Adoption of the draft law will provide more effective regulation of payment service suppliers’ activity. Currently, final opinions and proposals of relevant state bodies are collected. The draft law will be submitted to the government soon.
CB takes several measures to promote population to use payment services more actively and stimulate the banks for development of cashless settlement of accounts and popularization of usage of e-payment services.
For development of payment infrastructure and cashless payments, the CB’s main goal is to form a society with high payment culture, increase the circulation on cashless payments to the level of developed countries, strengthening of institutional and legal base of e-payment services.
In order to achieve these goals, the CB has developed a “State Program on extension of application of modern e-payment services and cashless settlement of accounts in Azerbaijan in 2015-2020”. The program is currently being considered by relevant bodies.
The programs targets include: provision of National Payment System effectively and safely, involvement of population and economic entities in usage of e-payment services, development of e-banking, extension of innovative payment instruments, as well as usage opportunities of e-money and application of modern technologies in the banking services, increase of economic effectiveness and quality of banking services.