AZE.US
Azerbaijan’s new limits on card-to-card transfers and the number of permitted transactions could push some users back toward cash payments, potentially undermining years of efforts to expand the country’s digital economy, an economist has warned.
As AZE.US reports, economist Asif Ibrahimov told Globalinfo.az that restricting card transfers does not solve the underlying problem but merely shifts it elsewhere.
“For years, the government encouraged citizens to use bank cards,” Ibrahimov said. “People receive their salaries on cards, pay utility bills electronically and use cards for shopping. Now the same citizens are being told that card-to-card transfers and the number of transactions are limited. This is logically contradictory.”
He said efforts to combat tax evasion, the shadow economy and illegal financial flows should focus on suspicious transactions instead of making everyday payments more difficult for millions of ordinary citizens.
“Risky operations should be targeted, not society as a whole,” Ibrahimov said.
According to the economist, the restrictions could change consumer behavior. If people conclude that using a bank card creates additional difficulties, they may choose to make more payments in cash.
Such a shift would reduce financial transparency and weaken public confidence in the banking system, he warned.
“The government has spent years trying to digitalize the economy, but administrative restrictions of this kind undermine trust in that process,” Ibrahimov said. “When confidence in the banking system declines, it becomes difficult to speak about the further development of electronic payments.”
A decline in card transactions could also affect banks’ commission revenue, slow the development of digital services and reduce financial inclusion, according to Ibrahimov.
However, he said the greatest loss would be the convenience previously available to citizens.
“An economy develops through trust, not prohibitions,” he said. “If people begin moving away from the banking system, that becomes a problem not only for banks but for the entire economy.”
Ibrahimov argued that financial monitoring should be targeted, risk-based and focused on transactions that show signs of unlawful activity. Applying the same restrictions to every customer, he said, is an inefficient administrative approach that primarily creates difficulties for law-abiding citizens.
“Do we want to bring citizens into the digital economy, or force them to carry cash in their pockets again?” he asked.
AZE.US