Around 25 fintech companies providing services in Azerbaijan’s financial market

by James · October 1, 2022

By Ayya Lmahamad

A total of 25 fintech companies provide services in the financial market of Azerbaijan, FinTech Association of Azerbaijan chairman Ruslan Talibov told “Fintech ecosystem in Azerbaijan – today and tomorrow”, Azernews reports.

He noted that 55.6 percent of them are stable and 44.4 percent are still developing, and emphasized that around 20 percent of these companies are international players.

“I believe that the adoption of a law on payment systems will accelerate their development, expand the number of fintech players, provide access to payment tools and provide a number of other benefits,” he said.

Ruslan Talibov also added that fintech organizations must create the conditions for closer cooperation with banks.

Startup Certificates

Speaking at the event, Deputy Director Samir Humbatov of the Small and Medium Business Development Agency stated that the agency issued around 60 start-up certificates over the past two years.

He emphasized that it is planned to investigate the issues of financing start-up projects that received these certificates.

“Some startup creators have received a certificate and unfortunately do not perform the powerful activities expected of them. Therefore, it is necessary to create financing and lending tools, he said.

Digital payments

The central bank is working to stimulate digital payments, said the bank’s CEO Farid Osmanov.

Noting that a strategy for digital payments was adopted in 2021, based on where efforts are being made to develop this type of payments, he added that a law on payment systems is expected to be adopted in the near future, which will accelerate the development of electronic financial services.

“We are also working on a number of other regulations that will facilitate the development of financial services and their compliance with international standards,” he said.

He stated that the number of bank card payments has increased significantly in Azerbaijan, adding that there are 13 million cards there, of which 9 million are contactless.

“Cashless payments of the country’s total turnover account for about 41 percent, and we aim to increase the share of non-cash payments in total turnover,” he said.

In addition, Farid Osmanov said that the bank is also working on a project that will help create synergy between fintech companies and banks, and develop open banking.

Moreover, he told reporters that Azerbaijan’s payment systems will be based on a license. He noted that the relevant decision is reflected in the bill “on payment services and systems”, which is still pending in various public agencies.

“The Central Bank is working to implement comprehensive measures to expand non-cash payments and create a competitive environment. When a draft proposal enters into force, the CBA will control the activities of payment organizations, non-banking organizations, as well as intermediary services. Such activity will be allowed and licensed, and these organizations will be subject to technological security and regulatory measures, he said.

Global payment solutions

Visa launched Apple Pay and Google Pay cashless payment solutions in Azerbaijan in 2019, said Regional Manager for Central Asia and Azerbaijan at Visa Nurlan Hajiyev.

He noted that the launch of these cashless payment solutions became possible due to the launch of tokenization.

“Visa was convinced that this would contribute to the launch of Apple Pay and Google Pay in Azerbaijan. Today, a number of banks continue to work on this, he said.

The regional manager added that Visa launched cashless purchase of train tickets on the Baku-Sumgait route.

“The relevant infrastructure has been installed at 14 stations on the Absheron Circular line. It is planned to extend this initiative to other routes,” he said.

Nurlan Hajiyev added that Visa plans to launch MTT (Mobility and Transport Transaction) in Azerbaijan, adding that this includes the implementation of tokenization in public transport.

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Ayya Lmahamad is a staff journalist for AzerNews, follow her on Twitter: @AyyaLmahamad