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Artur Turemka, General Manager For The Balkans, Mastercard

Serbia Growing Cashless Society

“The matter of building a cashless society is a matter of the financial inclusion and education of citizens. Even in Europe, 138 million people are financially cut off from society, i.e. without a bank account or payment methods. In Serbia there is a similar issue. According to the World bank’s latest data, 17% of citizens are financially excluded,” says Artur Turemka, Mastercard’s manager for the Balkan region

“The rest are bank clients and the level of usage of electronic payment methods depends on their needs and their perception of the convenience that cash and cards bring them, the level of comfort in using electronic payment options, which is correlated to the level of financial education and the extension of the acceptance network for card payments, which varies greatly between Belgrade and other parts of Serbia.”

How can the development of a cashless society be accelerated?

– Growing a cashless society in Serbia is indeed a complex issue requiring a multifaceted approach.

However, what we do see is that people who use cards do so frequently, as they are quick to recognise the benefits they bring. Our MasterIndex Serbia 2017 study noted that 77% of respondents use their cards at least once a week, with 71% preferring cards to cash for payments exceeding 1,500 dinars.

There is openness among citizens towards electronic payment methods and the financial industry needs to make a push to educate citizens in order to ensure they understand that “plastic” means safe access to funds 24/7/365 anywhere in the world; that a card is a way for retailers to reduce their cash-related operational costs and risks and, finally, that a card is a solution that helps government reduce costs, gain efficiencies, curtail fraud and advance social progress.

The national eGovernment portal recently enabled the payment of services using payment cards. What will this mean for citizens?

– eGovernment is a major step in the digitisation of business in Serbia, as it basically sets up a one-stop-shop for institutional payments and obtaining documents, while the state – as basically the biggest provider of services and recipient and issuer of payments in the country – gets unprecedented traceability of transactions and makes a big step towards a cashless society.

The key benefits here are convenience and flexibility. MasterIndex Serbia 2017 has shown that 41% of respondents named precisely state and municipal institutions as locations where they would like to use card payments, so this option will not only respond to that need but will do so in a more consumer-friendly way.

The MasterIndex Serbia 2017 study noted that 77% of respondents use their cards at least once a week, with 71% preferring cards to cash for payments exceeding 1,500 dinars

What effects can we expect from the announced reductions in interbank charges?

– Interchange helps balance the benefits and costs of electronic payments, as well as ensuring that each participant pays their fair share of costs associated with processing and protecting card transactions.

An interchange cap was introduced in the EU in 2015. The reevaluating of effects has yet to be carried out, but practical experience has shown that although retailers do generate savings from the cap, they are not forwarded to consumers, while the cap also hinders the willingness of banks to introduce new solutions on the markets.

In circumstances when we wish to build a competitive and efficient cashless economy in Serbia, we need to assess the actual long-term effects of the interchange cap.

If this regulation is adopted, it is also essential to extend the regulatory efforts to proactive measures leading to increased retailer acceptance and consumer use, thereby properly addressing all aspects of electronic payment market development.

We are committed to constructive cooperation and dialogue with decisionmakers to ensure that any future legislation allows us to provide the most innovative and affordable payment solutions.

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