By AZE.US
New limits on card-to-card transfers and commissions charged through some payment terminals have raised concerns that customers in Azerbaijan could return to cash. Banking expert Emin Karimov says users are more likely to switch to QR and POS payments instead.
Azerbaijan is debating how new card limits and commissions will affect the country’s transition toward cashless payments.
A 500-manat ($294) limit on some card-to-card transactions has attracted particular attention. Customers are also reporting commissions on certain operations conducted through payment terminals.
The changes have prompted questions over whether bank customers will begin withdrawing more cash to avoid restrictions and additional charges.
Banking expert Emin Karimov told Demokrat.az that fees could influence how customers choose to pay but are unlikely to reverse the overall growth of electronic transactions.
Who Pays the Commission?
Banks, payment-terminal operators and payment organizations provide services under commercial cooperation agreements. Those agreements may include commissions or service fees for processing transactions.
The cost can be covered in different ways. In some cases, the bank or payment company pays the fee from its own revenue. In others, the commission is charged directly to the customer.
Large banks with extensive customer bases and high transaction volumes are more likely to absorb the cost themselves, Karimov said.
Smaller banks, particularly those that have only recently started accepting payments through terminals or have relatively few customers, may pass the commission on to users.
The amount and method of charging the fee can therefore depend on the size of the bank, its customer segment and transaction volume. The introduction of commissions does not necessarily mean that every bank, payment terminal or card transaction will be subject to the same charge.
What Does the 500-Manat Limit Mean?
Karimov said the 500-manat limit on card-to-card operations could encourage customers to use payment methods designed specifically for commercial transactions.
Instead of transferring money directly to a seller’s personal bank card, customers can pay through:
- QR codes;
- mobile POS systems;
- traditional POS terminals;
- banking and payment applications.
The limit therefore does not necessarily force customers to withdraw cash. They can select another electronic payment channel when paying for goods or services.
A broader shift toward QR and POS payments could also help separate personal transfers between individuals from commercial transactions conducted by businesses.
Why Customers Are Unlikely to Return to Cash
Karimov said electronic payments continue to expand primarily because they are more convenient.
Customers can transfer funds, pay bills and purchase goods without searching for an ATM, waiting in line at a bank branch or carrying large amounts of cash.
Even if a fee or limit is introduced for one channel, users can often switch to another cashless option. A customer restricted by a card-to-card transfer limit, for example, may still be able to complete the payment through a merchant’s POS terminal or QR code.
Banks and financial technology companies are also continuing to introduce new digital tools, increasing the range of available payment methods.
Fees May Change Over Time
Commission policies are not necessarily permanent.
Banks and payment organizations regularly adjust their pricing models. A fee may initially be introduced and later reduced or removed, while some customers may receive exemptions, discounts or free transactions under specific service packages.
Financial institutions can also absorb fees to attract customers or promote new products.
Consumers should therefore check the tariff schedule of their own bank rather than assume that one commission applies across the entire financial system.
Cashless Payments Expected to Keep Growing
Karimov does not expect the new restrictions to return cash use to the levels seen five, 10 or 15 years ago.
The limits may change the structure of electronic payments, with some users moving away from card-to-card transfers and toward QR codes, mobile POS systems and conventional card terminals.
The 500-manat limit and individual commissions may inconvenience customers and encourage them to compare banking fees more carefully. However, Karimov expects cashless payments to continue expanding rather than lose ground to paper money.
AZE.US