Cashless payments*
Cashless payments or payments with bank cards (electronic cards that allow you to buy goods and services without physical money) are the dominant payments in developed countries. They account for 63 percent of the total volume of sales and purchases in Italy, 59 percent in Greece, and 74 percent in Germany. Not to mention some of the Nordic countries, where the role of cash has almost completely disappeared. Even here, bank card payments have increased by 37 percent during 2021, reaching 34.9 billion ALL or 290 million euros.
Bank of Albania statistics show that at the end of last year we had about 1.32 million active bank cards. Taking an average of two cards per person, it turns out that more than 600 thousand people, or one in five citizens of the country have and use bank cards. The total number of bank cards continues to be dominated by debit cards, linked to citizens’ current accounts, which make up about 86 percent of the total. Payments without paper money, i.e. with bank cards, depending on both the citizen owning them and the merchant and service provider. The number of enterprises that have electronic devices for accepting bank card payments has also increased significantly in our country. There are 13,741 electronic devices in circulation today with us, with a 12 percent increase during 2021, compared to the previous year.
What prevents most of them from using these devices is the fact that cashless payments make it more difficult to hide real income, a phenomenon that is widespread in our sales. Therefore, the time has come for businesses to be forced by a government-central bank order or moratorium to be fined, in case they do not accept paperless payments, in addition to the usual cash payments. This moratorium fine has also been implemented by countries such as Greece and Hungary, and it has been very good for them to reduce costs in the sales made, due to the use of bank cards. Finally, in the first days of July 2022, Italy joined the fine for refusing bank card payments. The Italian state wanted to make the law binding at the end of this year, but high tax evasion convinced the Italian authorities to hurry and pass the law in early July 2022. The new law provides for fines for businesses that refuse electronic payments. Now, anyone who refuses electronic payment will be subject to an administrative fine of 30 Euros, to which is added 4 percent of the value of the transaction for which payment by bank card was refused.
The request for a similar law in our country has been made by the Albanian Association of Banks for several years. Rightly, the association has demanded that businesses in Albania be forced to accept at least one alternative method of payment, apart from physical money. Our government is not making enough efforts to reduce the use of cash in the economy. Also due to the history of its development, our economy is an economy with a high use of cash and a relatively weak culture in the use of electronic payment instruments. The damages and costs are very high. About 320 million euros per year. The reduction of physical money in circulation and in commercial transactions is a challenge and a requirement for a more organized, more measurable, more disciplined and more stable economy.
Today, it is a fact that if you do not have paper money with you, even if you have a debit or credit card, you may be unable to pay and not get the goods or services you need! This must not happen again. Every business unit should have the obligation to offer, in addition to cash, another payment option. The draft law on the basic account is under discussion and banks will have obligations for its implementation. The real challenge today is the consolidation of fiscalization, for the role that commercial banks have in reporting fiscalized payments. Likewise, the correct implementation of the register of accounts. Vigilance against money laundering and the financing of terrorism is a battle that the banks have so far won better than anyone else in our economy.
*by Fatos Çoçoli
Published in: sot.com.al