A round table on the topic ‘Who still needs cash?’ was held at the Croatian Journalists’ Association, with the main theme being mobile and contactless payments, discussed by representatives of commercial banks, merchants, mobile operators, and representatives of MasterCard Europe.
At the opening of the round table, Marina Ralašić from the magazine Banka, which organized the event, stated that thanks to technological advancements, there is an increasing reliance on electronic forms of payment and the digitization of money. According to the latest data from the Bank for International Settlements, only 9 percent of total transactions in the eurozone are conducted with banknotes and coins. Cash costs Europeans about 1,100 kuna per capita annually, and a World Bank study shows that the share of the shadow economy in Croatia amounts to 35 percent of GDP (around 13 billion euros). For this reason, participants in this round table are encouraged by research from the consulting firm A.T. Kearney, which shows that a 10 percent increase in card payments reduces the share of the shadow economy in GDP by 5 percent.
It was noted at the round table that mobile and contactless payments in Croatia are still in their infancy, but that banks, telecoms, and retail companies are preparing to be ready to accept new trends in financial transactions, and that 7 million euros in transactions were made in Croatia through the ‘snap and pay’ service.
The problem of mobile payments is also created by the fact that only about 20 percent of mobile phone users use smartphones that utilize such technology (NFC). As an example of a service that has not yet fully taken off, Luka Tomašković, the product director for card and transaction payments at Zagrebačka banka, stated that in Croatia about 388,000 mobile phone users have a mobile banking application, but only 50 percent use it for checking account balances, while very few people use the application for transactions.
– Banks have already introduced mobile banking, merchants will accept it, but they are probably waiting for some form of co-financing, mobile operators already offer such services, and 20 percent of mobile phone users already have the option to pay with their phones, but the problem lies in the perception of such a product, Tomašković believes, who expects a more active role from banks, merchants, and operators in this regard over the next two years.
Neven Barbaroša, director of the payment systems sector at the Croatian National Bank, stated on this occasion that e-money can be issued by any institution that obtains a license for it from the CNB, but also that there are still inconsistencies in the Croatian market, such as commercial discounts for cash payments. One solution for reducing cash transactions was proposed by Aleksandra Babić, marketing manager at MasterCard Europe. – The number of free transactions at ATMs should be limited so that people perceive cash and card payments equally, said Babić, who is also aware that banks will not decide on such a move because they know they will lose clients, as stated in the magazine Banka.
