The market of electronic means of payment continues to grow. Economic analysis by Info-Prim Neo

After rising by 48.8% in the first half of this year, the value of the operations with Moldovan bank performed inside the country totaled 5.34 billion lei (540 million USD), figure similar to the one for the whole 2006. The internal electronic instruments market has doubled in value during the past two years. The value of the operations with Moldovan bank cards abroad has grown over two times. The rise came on the back of the over 11% decrease in the number of cards in circulation in the first quarter of this year as the banks carried out a review at the start of the year in order to remove the cards that had been out of use for a long time. In the second quarter, the banks attracted more than 10,000 new clients, while the old customers spent more using the electronic means of payment. The value of an operation in the first half of 2007 was 698 lei, while in January-June 2008 - 792 lei. The electronic means of payment market in Moldova becomes more dynamic, while the development prospects are optimistic even if the infrastructure is poorly developed and a large part of the card owners, especially those that receive the salary on card, are not clients of the shops where they can pay for purchases by card. Banking experts’ forecasts come true – the market continues to develop, growing by 40-48% a year. "There is created the normative basis that insures the development of these financial instruments, with the banks are making efforts to extend the market,” experts say. In order to increase the market share, the banks implement new projects based on loyalty programs (bonuses, presents, discounts etc.), including companies working in different areas in these programs. Though the market develops quickly by the value of operations, the card is used mainly to withdraw money and rather seldom to buy things. This situation changes too slowly and we cannot speak about progress. The number of payments by card over January-June 2006 made up 1.6% of the value of operations with local and international cards, remaining at the same level the next year. In the first half of 2008, this figure was 1.9%. Bank experts say that the people do not make payments by card because many of the shops do not have ATMs and many of the card owners, especially those that receive the salary on card, do not go to the shops where they can pay by card. [Number of payments with the card abroad is on the rise] The Moldovan tourists and businesspeople in the first half of this year spent abroad over 351 million lei, an increase of 34.5% compared with the corresponding period of 2007. Though the growth rate has decreased compared with the first six months of 2007, when it was 47.8%, this segment of the market shows upward trends. Unlike the operations with international cards in Moldova, where withdrawals prevail, 53.35% of the operations abroad were performed by transfer, as against 50.2% in the same period last year. Half of the Moldovans that go abroad to holiday, on business or for other purposes prefer to pay for the services and goods by card. This refutes the assertion that they have not yet developed to the level to make payments by card because in a different situation, they behave in other ways than at home. The value of an operation continues to increase: from an average 1,274.8 lei in 2001 to 2,703 lei in the first half of 2008, though by 200 lei fewer than in 2007. The number of operations with Moldovan bank cards abroad amounted to 129,870, practically the same number as two years ago. [Foreigners spend more in Moldova than the Moldovans abroad] For the time being, the foreigners spend more in Moldova than the Moldovans abroad. In the first half of this year, the operations with foreign bank cards performed in Moldova totaled 639.8 million lei, by 7.9% more compared with the corresponding period last year. At least 26.9% of such operations were cashless payments. Though this figure is much higher than the number of bank card operations performed by the Moldovans, the fact that in seven out of ten cases the foreigners that are used to pay by card at home use the card to withdraw money while in Moldova proves the lack of infrastructure. [Shopping centers are obliged to install ATMs] The amendments to the Fiscal Code that took effect in the middle of June will give a new impetus to the market of electronic means of payment. The retail and wholesale stores with an annual turnover of over 10 million lei are obliged to set up ATMs by January 1, 2009 and do so that the customers could use these machines to pay for the purchases and services. The Chisinau economic entities (hotels and restaurants, filling stations) with a turnover of over 2 million lei are also obliged to install ATMs. The state obliges the banks to purchase and set up ATMs from their own money within a month. Economists say that this is a direct interference in the activity of private economic entities, regardless of the aim pursued. Anyway, the development of the market without a modern infrastructure and ATMs in shops, well-trained specialists and sufficient incomes that would enable more people to do the shopping in large stores is impossible. The growth witnessed the previous years is not forever.