Non-cash transactions surpass cash ones in Armenian plastic card  market

ArmInfo.The share of non-cash transactions in 2023 increased to 51% of the total volume In the Armenian plastic card market, (from 40% in 2022), to 3.2 trillion drams ($7.9 billion) in absolute terms. Moreover, the y-o-y growth rate of the volume of non-cash transactions accelerated from 69.7% to 2-fold. The increase in the share of non-cash transactions with Armenian cards resulted from a legislative restriction on cash transactions introduced from July 1, 2022. 

According to the data from the Central Bank of the Republic of  Armenia,  54.5% or 1.8 trillion drams ($4.3 billion) in non-cash  transactions, were carried out through virtual vPOSs with an  acceleration of y-o-y volume growth from 52.4% to 85%. In the total  volume of plastic card transactions, the share of transactions  through vPOSs is already reaches to 28%.

The significant growth in non-cash transactions accelerated the  growth rate of the total volume of plastic card transactions from  34.7% to 43.2%, as a result of which, 6.3 trillion drams or $15.6  billion were reached by the end of 2023,  (including transactions  abroad using cards of Armenian banks-issuers).  Moreover, the volume  of transactions abroad using cards of Armenian banks- issuers slowed  down in y-o-y growth from 2-fold to 54.3%, to 704.6 billion drams  ($1.7 billion), which only slightly increased their share in total  plastic card  transactions from 10.3% to 11.1%.

Among plastic card transactions, international cards recorded the  highest growth rates. The leadership in terms of transaction volume  is held by Visa cards - 3.6 trillion drams in 2023, with y-o-y growth  accelerating from 38% to 76%. Second place was held by Mastercard  cards - 1.7 trillion drams, with growth accelerating from 17.1% to  54.5%. local ArCa cards are in fourth place  - 853.2 billion drams,  with a growth slowdown from 26% to 23.7%. And fifth place is taken by  other foreign cards (HSBC cards, AmEx, Diners Club, MIR) - 189.1  billion drams, with a sharp acceleration in the growth rate from  22.5% to 86.1%. Such growth rates, according to data available to  ArmInfo, were largely caused by MIR cards, which VTB-Armenia Bank  started issuing in July 2022, issuing almost 188 thousand cards by  October 2023.

In terms of the share in the total volume of plastic transactions,  Visa cards hold the lead - 57% (compared to 53.4% a year earlier),  Mastercard is in second place - 26.5% (compared to 26.6% a year  earlier), ArCa is in third place - 13.5 % (versus 17.4% a year  earlier), and the remaining 3% (versus 2.6% a year earlier) are  transactions with other foreign cards.

Visa cards remain the leader in the total number of cards as well-  46.3%, followed by Mastercard - 23.6% and ArCa - 23.4%, and the  remaining 6.7% are other foreign cards (HSBC cards, AmEx, Diners  Club, MIR). In terms of y-o-y growth in the number of cards, the  highest rate, as in the case of transactions, was shown in the  reporting year by other foreign cards - 35.3%, international Visa and  Mastercard cards increased numerically by 14% and 19.1%,  respectively, and local ArCa cards grew by 16.1% from decline. 

In total, by 2024 there were over 3.722 million cards, with a y-o-y  growth of 17%. According to the latest "Armenian banks in the card  business" analytical review, prepared by ArmInfo IC, transaction  activity (activity coefficient by transaction volume) accelerated in  y-o-y growth from 15.9% to 17.4%, amounting to 0.162, i.e. The  average monthly transaction volume per card is 162 thousand drams or  $412.

According to ArmInfo financial analysts, the card market of Armenia,  which has received a significant quantitative impetus in its  development over the past 2 years, including thanks to the law on  non-cash payments adopted in 2022, is entering a new period of its  qualitative growth in conditions of fierce competition. The market  continues to experience unprecedented growth in the volume of  non-cash payments and Internet transactions, which for the first  time, both in quantity and in volume, began to exceed cash  transactions. ArmInfo experts especially note the role of the  Armenian Card (ArCa) National Payment System (NPS), which has  prepared a number of important technological innovations for  implementation on the market, thanks to which the functionality of  local ArCa cards will reach international technological levels and  security standards.

The quantitative growth of the market is accompanied by its  qualitative and innovative development. The number of new generation  ATMs,   contactless or cardless  ones,  is growing significantly. The  noticeable growth of the POS-terminal (POSs) network is supported by  an increase in the number of vPOSs and a sharply increased number of  relatively recently appeared mPOSs. In terms of technological  development of the card segment, activity in e-commerce and  contactless cards remains active. Banks began to offer Apple Pay and  Google Pay apps for Visa and MasterCard certified by the ArCa  national payment system, for contactless payments. Soon the same  technological capabilities will be available for local ArCa cards  through the ArCaPay system.

Out of 18 banks operating in Armenia, 17 operate in the plastic  market. The new 18th bank, Fast Bank, plans to enter the card market  in 2024, with the simultaneous issuance of international Visa and  Mastercard.