PASHA Bank foresees the growth of non-traditional financial services players in the Azerbaijani market – Member of the Board of Directors (Interview) (PHOTO/VIDEO)

BAKU, Azerbaijan, June 21. Today, in the context of the COVID-19 pandemic, the need for e-commerce and cashless payment services has increased significantly, said PASHA Bank Board Member Jalal Orujov in an interview with Trend.

According to him, there were some projects in this direction even before the pandemic, but the issues and the conditions required the acceleration of the implementation of these solutions.

“Companies have emerged offering innovative solutions for small and medium-sized enterprises (SMEs), as well as service packages to accept and make non-cash payments. In addition, there has been a recent trend in Azerbaijan towards the use of electronic wallets.These solutions mainly represent fintech startups, with banks playing a secondary role as the provider.

In addition, in recent years, steps have been taken in Azerbaijan to cover the population with banking services. Today, it can be said that most of the country’s population is covered by financial services: salaries and pensions are provided by bank card. I also want to note that the popularity of payments using mobile phones creates long-term opportunities for a complete rejection of the usual plastic cards,” Orujov said.

According to him, in Azerbaijan in recent years there has also been a trend of development of “Open Banking” (Open Banking).

“The lack of a proper regulatory framework today prevents banks in the country from implementing ideas based on Open Banking. Our bank, in particular, and a few other financial institutions are doing work in this direction, but in a limited format. In fact, Open Banking will contribute to the emergence of new fintech startups capable of providing banking services in a different and more convenient format for the customer.The positive impact of Open Banking for banks is that they don’t have to create those solutions.

I believe that this trend will only really develop after the competent authorities have approved the regulatory standards. The most important thing is that the implementation of this initiative will create competition in the market not only between banks, but also between banking service providers,” Orujov stressed.

In his opinion, two more trends have acquired maximum diffusion.

“These include the growth of online payments and the use of bank cards not only to collect funds, but also for their use in the payment of goods and services through point-of-sale terminals. PASHA Bank is not very active in consumer lending, but we can say that we have the most developed network of POS terminals, in addition, our bank is the largest acquiring bank in Azerbaijan. we compare the results of 2020 and 2021, the turnover of non-cash payments in our network amounts to approximately 1.6 billion manats in 2020 and in 2021 – 2.8 billion manats. The upward trend also continues this year, so according to the results of the first quarter of this year, the turnover increased by 20%,” Orujov said.

A board member of PASHA Bank said that this summer a Google Pay contactless payment solution will be launched in Azerbaijan, which will allow paying for purchases using mobile devices on the Android platform.

Speaking about cybersecurity, J. Orujov pointed out that in 2018 PASHA Bank became the first bank to seriously invest in this segment.

“Our bank uses many systems that ensure information cybersecurity, including a fraud prevention system. Investments in this area continue to this day.

Additionally, PASHA Bank has a dedicated team that monitors and prevents cyber threats around the clock. This part of the banks job may not be as visible, but recently there has been an increase in cyberattacks against banks around the world, and our bank, seeing these trends, actively continues to invest in protecting its infrastructure.

When developing payment channels by all payment systems, including banks, security is always put first. Banks that issue payment cards in one format or another, serve Apple Pay and Google Pay, annually undergo an international audit of payment systems, where all physical information and cybersecurity are checked. Based on the results of this verification, a corresponding certificate is issued to a financial institution,” Orujov noted.

In addition, he also noted that one of the most “popular” types of fraud in recent years is social engineering (the so-called “phone fraud”).

“Fraudsters make phone calls and try to get bank details. All banks are focused on educating their customers not to give out their bank details. Not a single bank asks its customers for a card number, code (CVV), as well as a code from an SMS message,” a bank representative said.

“It should be noted that in our country, with Apple Pay, local contactless payment solutions based on mobile devices are already offered, and their number will only increase. I think that by the end of 2022, a legal act to regulate “open banking”. Its adoption will be an opportunity to develop services and start-ups aimed at increasing cashless payments and creating new financial technologies.

In addition, the number of non-traditional, ie non-banking, players will increase in the financial services market. We can expect an even greater shift towards e-commerce and cashless payments, as well as payments on online platforms. I hope that by the end of this year, a bank card acceptance system will also be introduced in public transport. The current number of bank cards in the country makes it possible to implement this initiative,” he added.

Stephen V. Lee