20 years ago it would have been hard to imagine, if not unthinkable, that it would take just a few clicks from the comfort of one’s armchair to order and pay for a product, instead of going to the store, carrying a wad of banknotes. Or to video conference online with a friend in Sydney, another one in London and a third one in Ploiesti, all at the same time. Payments in Romania are evolving faster than anybody could have aver thought.
Surely, it sounded more like a Sci-Fi movie script. Romania ranking among the countries with the fastest internet connection speed was equally inconceivable. And yet, 9 of the top 15 cities worldwide with the fastest internet access are now in Romania.
We are witnessing a technology and information revolution that has transformed the world, just like transportation and electricity did, a long time ago. And this revolution is now taking over the world of digital payments.
Over 20 years ago, Visa Europe launched the first bank card in Romania – a business card. Ever since, technology has profoundly changed the way we make or receive payments. What seemed groundbreaking in the past, like the first CHIP card or the first payments over the internet, has now become commonplace. The card has long ceased to be just a piece of plastic, currently helping us make mobile and remote payments. And the swiftness and ease of paying has had Romanians craving for new innovations in payment technology.
Romanians have started to increasingly favor card payments, so last year we managed to exceed a very important benchmark – more than one in two Visa card transactions is a POS payment. This means Romanians are using the card to withdraw cash from ATMs as much as they use it to pay at merchants. Compared to 2008, namely the period of economic boom, the number of Visa card payments has doubled. The network of active acquiring merchants has continuously spread nationwide, up 20% last year, while frauds on this payment instruments dropped to an all-time low of 0.003%.
Contactless technology has been crucial to this dynamics, giving a strong boost to card payments. Romanians are known for their high appetite for gadgets and new technologies. Accessing the internet on your smartphone has become a routine and many cannot even imagine leaving home without their mobile phone or spending a whole day without Facebook.
Despite the still existing reluctance towards digital payments, online shopping has picked up strongly every month and contactless payments have gained surprising momentum. In the past year, card spending in online shops in Romania was up 60% from 2014, indicating clear growth in e-commerce. Moreover, the value of contactless payments increased 50-fold, a trend which is most likely to be maintained in the upcoming period.
How can this accelerated dynamics be explained? Perhaps also through the initiatives carried out by Visa Europe and its member banks over the years, meant to boost card payments and educate the market and the consumers. Successful partnerships with local merchants and financial education programs implemented nationwide have translated into the positive developments in contactless and e-commerce. Building on this are the wider Visa efforts to support modernization of means of payments in the public sector: the local tax card payments campaign carried out nationwide for seven years, as well as initiatives to encourage acceptance of electronic payments in the public institutions included in the National Strategy to promote card payments in the public sector, launched by Visa in 2013.
These endeavors will continue this year. Especially since 2016 will be the year of very many opportunities, generated by NFC mobile payments, new security apps and electronic luncheon vouchers. We just need to go full throttle and stay on course. Final destination: the Future of Payments!