Jelena Ristić, Country Manager, Mastercard Serbia, Montenegro And Bosnia And Herzegovina

We Are Embracing Digital Technologies

The MasterIndex study carried out by Mastercard showed that e commerce has boomed in Serbia with 81% of active online shoppers, of whom15% made web payments for the first time during the pandemic

In the battle against the shadow economy it is important to develop the regulatory framework, reduce taxes to encourage businesses to operate transparently but also to enforce a predictable inspection regime.

Last year brought many changes, including in Serbians’ financial habits. What have we learnt, adopted, rejected or embraced?

– With changes happening all around, one thing is certain – we have embraced digital technologies wherever possible. The convenience and safety of e commerce are why this form of payment is surging across all categories, from settling utility bills to ordering food. Online card payments alone increased by 39%. In physical stores, contactless payments by card or mobile phone are booming, with around 75% of card transactions made by tapping. To accommodate a growing consumer preference, we increased the limit for contactless payments without PIN last year from 3,000 to 4,000 RSD.

All these developments point to one thing – consumers are prioritizing practical, multi-functional and safe solutions that save them time and organically fit their lifestyle. Consumers recognize Mastercard solutions as giving them seamless consumer experience, and we will continue being there to support consumer and market shifts in times to come.

What are the best ways to counter the shadow economy, in addition to reducing income tax, regulating new forms of work and reducing fiscal and para-fiscal charges?

– High taxes, corruption, high unemployment, and a poor tax culture among people and companies are the main causes of the shadow economy. This is a highly complex issue so there is no one-size-fits-all solution. The stick and carrot measures should be well balanced to support sustainable market development, but it is arguably more important to work on educating all members of society about the actual implications of the shadow economy. When you say that it equals 10 or 15% of lost GDP, it may not mean a lot to the average person, but when you put in context and tell them it’s enough to pay the salaries of all healthcare workers for the next six years or build dozens of kindergartens and schools, those are values that each of us understands and can relate to.

The next step is understanding that small everyday actions matter, like choosing to use cashless payments over cash, insisting on a fiscal receipt, refusing to shop with unreported merchants or reporting unregulated labour. We need to understand that the shadow economy is not an abstract concept – it is an issue that directly or indirectly lowers the quality of life and work for all of us, so we need to adopt the mind-set that paying taxes is not an expense, that operating transparently is not an option, and that all our actions and transactions are investments in the local community.

Seven years ago, NALED and socially responsible companies started the Fair Competition Alliance of which Mastercard is a member. Is it one of the best examples of formalizing the public-private dialogue?

– As a vice-president of the FCA, I would say that it’s a platform for dialogue and action for both public and private sectors, and a string of successful reforms and improvements of overall market conditions proves this. FCA members – major corporate investors and employers, technology companies with international expertise, local governments and NGOs, provide valuable, real-life inputs that help the government tailor policies so that together we reach our joint goal – a modern and competitive market.

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