In 2023, non-cash card transactions reach 40% of  total volume of  plastic transactions

ArmInfo. In Armenia, the total volume of plastic transactions accelerated y-o-y growth from 26.3% in  2021 to 34.7% in 2022, exceeding 4.4 trillion drams or $11.3 billion (including transactions abroad with cards of Armenian issuing banks).  This is evidenced by the data of the Central Bank of the Republic of Armenia, according to which the volume of transactions carried out  abroad with the cards of the issuing banks of Armenia increased 2.1-fold on a y-o-y terms up to 456.5 billion drams or 1.2 billion  dollars (10.3% of the total plastic transactions).

According to the regulator, the growth of plastic transactions is  supported by high activity of transactions through Virtual  POS-terminals (vPOS), the volume of which accelerated the y-o-y  growth from 35.3% to 52.4%, exceeding 947.6 billion drams or $2.4  billion in 2022, as a result of which their share in non-cash  transactions reached 54%, and in the total volume of plastic  transactions amounted to 21.5% (against 19% in 2021). This made it  possible to further increase the share of non-cash transactions in  the total volume of plastic transactions - from 32% in 2021 to 40% in  2022 (1.8 trillion drams or $4.5 billion), with a sharp acceleration  in the y-o-y growth in absolute value from 39.7% to 69 .7%. And if in  previous years the activity of non-cash transactions was determined  by Internet commerce, the popularization of mobile and web  applications by banks and Armenian Card, such effective incentives as  CashBack, then in 2022, the introduction of a legislative restriction  on cash payments from July 1 became a powerful impetus. This, in  turn, somewhat reduced the dominance of cash transactions in the  total volume of plastic transactions - from 68% in 2021 to 60% in  2022, which amounted to 2.7 trillion drams ($6.8 billion) in absolute  terms, of which about 96% were carried out through ATMs. Moreover,  the slowdown in the y-o-y growth in cash transactions from 21% to  18.5% was accompanied by the same slowdown in the growth of ATM  transactions from 21.6% to 19.5%.

In terms of cards, the volume of plastic transactions showed almost  the same growth for both local and international cards. In  particular, the volume of transactions with local ArCa cards  accelerated y-o-y growth from 13.8% to 26%, amounting to 689.9  billion drams in 2022. The volume of transactions with Visa cards  also accelerated the y-o-y growth from 34.2% to 38%, exceeding 2.1  trillion drams in 2022. Then, in terms of growth rates, transactions  on other international cards (HSBC, AmEx, DC) follow, with an  acceleration in rates from 9% to 22.5%, the volume of which amounted  to 101.6 billion drams in 2022. And the fourth place in terms of  y-o-y growth of transactions is occupied by MasterCard cards, with a  slowdown from 19.9% to 17.1% and ensuring the volume for 2022 at the  level of 1.1 trillion drams.

In terms of the share in the total volume of plastic transactions,  Visa cards hold the lead - 53.4% (against 50% in 2021), MasterCard is  in second place - 26.6% (against 29.4% in 2021), ArCa is in third  place - 17.4% (against 17.9% in 2021), and the remaining 2.6% of  transactions (against 2.7% in 2021) are transactions on other  international cards.

In the total number of cards, Visa cards also remain dominant - 47.5%  (against 44.1% in 2021), followed by MasterCard - 23.2% (against  25.9% in 2021), ArCa - 23.5% (vs. 28.3% in 2021), and other  international cards (HSBC, AmEx and Diners Club cards) make up the  remaining 5.8% (versus 1.7% in 2021).

The acceleration of the y-o-y growth rate of plastic transactions is  explained by the acceleration of the growth in the number of cards  from 8.3% in 2021 to 17.8% in 2022, of which there are 3.184 million  pieces as of January 1, 2023. In particular, the number of local ArCa  cards worsened the y-o-y dynamics from 0.5% growth to a 2% decline,  while the number of Visa cards accelerated growth rates from 13% to  26.7%, MasterCard - slowed down growth from 10.3% to 5.4%, but the  growth of other international cards accelerated much more  impressively - from 0.4% to 4-fold. A tangible growth was also  recorded in the number of ArCa-MIR cards - 2-fold (against 14.7%  growth in 2021), of which there are already 12,237 thousand pieces.

It should be noted that on July 1, 2022, the RA law "On non-cash  payments" came into force in Armenia, according to which, from that  date, transactions exceeding 300 thousand drams began to be carried  out in Armenia in a non-cash way. In addition, for certain  transactions, such as scholarships, public procurement, payment for  medical, educational, notarial, lawyer, including consulting  services, the requirement to make them completely non-cash came into  force. Wages and loans provided by banks and credit companies became  non-cash. Repayment of loans and insurance indemnities also began to  be carried out in a cashless manner. For pensioners and persons  receiving benefits under this law, there is a cash-back program in  the amount of 10% (no more than 5,000 drams) when making non-cash  card payments (including utility bills).  VTB Bank (Armenia),  Ardshinbank, ACBA Bank and Armbusinessbank have joined the cash-back  program. In accordance with the 9th part of the 4th art of this law,  the Central Bank, by its regulatory legal acts, may establish the  maximum and minimum limits of commissions for non-cash transactions,  as well as the cases, procedure and conditions for their collection.  In this regard, the Central Bank will regularly analyze the limits of  commissions charged by Armenian banks and carry out work to optimize  them. The Central Bank announces that in parallel with the increase  in non-cash payments in circulation, a further reduction in tariffs  is expected.

It should be reminded that the Central Bank of Armenia is the  majority shareholder of ArCa, then the major holders are ACBA Bank,  Armeconombank and Ardshinbank, while the remaining 14 banks each own  2% of the shares. Through their own processing, HSBC Bank Armenia and  VTB Bank (Armenia) operate on the card market. Unibank and INECOBANK  also have their own processors. There are 17 Armenian banks operating  in the plastic market, and even the 18th Fast Bank, which entered  November 2022, plans to start issuing cards soon.