Only 6.5% use cards for payments

TIRANA, June 11 – Despite the number of credit and debit cards in circulation increasing, the Albanian economy remains overwhelmingly cash based when it comes to payments. Data from the latest Bank of Albania annual report show an overwhelming majority of 93.5 percent of total transactions are ATM withdrawals with card payments accounting for only 6.5 percent, registering a slight 1.5 percent improvement compared to 5 percent at the end of 2010. Card payments at POS terminals unveil predominantly debit card transactions.
As regards infrastructure, the number of ATM and POS terminals at end-2011 was up 4.4% and 4.5%, respectively, from end-2010. Data on the distribution of ATM and POS terminals in 2011 show they are concentrated in the most developed regions and industrialized areas of the country. Tirana has the largest share, that is 55% to total ATM and 78% to total POS terminals.
Cards are a payment instrument whose use is considered to be lower than in other countries of the region and Albania’s potential, taking into account that the share of customer accounts remotely accessible, through a debit or credit card, is 28% to total customer accounts.
As of end-2011, the number of cards in circulation rose 5.3% from the corresponding period of a year earlier. By function, credit cards increased 39%, against the 4% of debit cards. According to banks’ reporting, debit cards accounted for 95% to total cards in circulation at end-2011, from 96% at end- 2010.
As regards cards operators, VISA has the biggest share, about 82 % to the total, followed by MasterCard. Maestro and American Express have the smallest share. Only two banks issue local cards, which account for 1% to total cards in circulation.
By cardholders’ gender and age, 25-35 year-old males dominate the group.
Recently, home banking services are increasingly expanding. After the introduction of this product in 2005, as at end-December 2011, home-banking services were provided by 11 banks. Expansion of these services is reflected also in the annual growth (35.6%) of remote banking accounts. The upward number of these accounts is followed by upward home-banking transactions in terms of both volume and value at end-2011, by 15.4% and 11.8%, respectively. During 2005- 2011, home-banking transactions expanded more in volume than in value.
In its latest country report, the European Commission warned there was limited progress as regards payment systems. “There is no complaint system in place for the settlement of disputes between the customers and the payment service providers, although there are some mechanisms for out of court arbitration. There was no progress as regards the establishment of a Banks Ombudsman as recommended by the Competition Authority,” adds the EC report.
A recent study published by the Competition Authority showed commercial banks operating in Albania are not transparent with their customers and charge higher fees even compared to regional branches in the Balkans, creating barriers in the use of banking services in Albania.