Since the end of summer, banks have been showering plastic cardholders with gifts, bonuses and discounts, in the manner of Father Frost
Banking cards come into fashion
The National Bank and the Government (the latter indirectly) are aiming to reach 50 percent non-cash payments in retail turnover by early 2016. The goal is ambitious, since the current figure is around 30 percent (achieved over the past decade). To reach 50 percent in just 15 months will be a breakthrough! With this in mind, bankers are extremely active, generously distributing bonuses to plastic cardholders. In recent months, Eurotorg JSC and Belarusbank have launched a joint discount project, while Technobank has joined the Belcard payment system in realising a ‘cash back’ idea (for ‘Talaka’ cards): a portion (1-3 percent) of the sum spent in card payments is refunded. Other market participants are preparing proposals and, if the trend continues, most Belarusians are likely to have several cards from which to choose, changing the structure of the card market. It’s yet unknown how far this aggressive marketing will affect the share of non-cash payments.
Almost all countries widely using non-cash payments have achieved progress using the ‘carrot and stick’. Belarus needs to expand its terminal network across retail and service sites, as well as installing new info-kiosks and other interactive equipment for money transfer. At the same time, all customers need to continue feeling safe and untroubled.
The potential of bonuses has been exhausted and Belcard JSC’s Director, Alexander Sotnikov, believes a breakthrough in non-cash payments will only occur once cash becomes ‘inconvenient and unprofitable’. Most people still find paying in cash easy and without too many disadvantages. Moreover, it ensures anonymity. From a corporate point of view, banknotes are a good commodity: the National Bank sells them to commercial banks to support cash liquidity. Financial organisations also often exchange their cash, resulting in the need for consumers’ banknotes. Low encashment tariffs are applied to encourage such actions, even though the service can result in losses. However, taking into account other operations, bank profits can, ultimately, rise.
