Azerbaijan 2025

Key Statistics 2023
Population	10.13 million, 1.68 cards per capita
Cards	Debit:  14.71 million Credit: 2.21 million Total: 16.92 million
Card Payments	Debit: 358.95 million; value AZN 9.70 billion ($5.70 billion) Credit: 57.95 million; value AZN 1.97 billion ($1.16 billion) All cards: 416.91 million; value AZN 11.67 billion ($6.86 billion)
POS Terminals	86,383
POS Payments	All cards 416.91 million; value AZN 11.67 billion ($6.86 billion)
ATMs	3112
ATM Withdrawals	All cards 162.40 million; value AZN 37.21 billion ($21.89 billion)

Market Overview
Payment Organisation	AzeriCard, owned by International Bank of Azerbaijan; MilliKart, owned by 17 banks and EBRD.
Domestic Card Brand	AzeriCard, (few) Millikart.
Market Structure	VISA and Mastercard are the principal payment cards issued in Azerbaijan. Also: American Express cards and Diners Club cards. An estimated 50% of cards are VISA-branded. Salary cards have been widely introduced in Azerbaijan. Based on central bank figures, there were 16.92 million cards in Azerbaijan by end-2023, up by 27.67% from 2022. CBA, the central bank, has been mandated to promote electronic payments, with a focus on payments for state services and extension of payment facilities to the mass market. E-commerce payments sustained its uptrend, rising by 116% in 2023 compared to 138% between 2021-2022, while POS payments rose by over 109.3%. ATM withdrawals grew, but at a similar rate as in previous years, at 27% in 2023. In 2016, a bank sector consolidation was carried out by CBA, according to the Financial Sector Modernisation Project (FSMP). State-controlled International Bank of Azerbaijan is the dominant player.
Notable Market Trends	Rollout: contactless cards, POS terminals, Mobile POS service, mobile banking apps, Debit Mastercard cards, VISA Debit, MPOS terminals.
Major Card Issuers	International Bank of Azerbaijan, Kapital Bank, Xalq Bank, Bank of Baku.
Major Card Acquirers	International Bank of Azerbaijan, Kapital Bank, Xalq Bank.
Major Card Processors	AzeriCard, MilliKart, and gateway Interbank Card Centre

Introduction – Payments in Azerbaijan

Azerbaijan is a presidential republic with a unicameral parliament, the National Assembly (Milli Mejlis). It has a strategic location between East and West based on large reserves of oil and gas.

It is a member of the Commonwealth of Independent States (CIS), the Organisation for Democracy and Economic Development (GUAM), the Economic Cooperation Organisation (ECO), and the Organisation of the Black Sea Economic Cooperation (BSEC).

The Nakhchivan Autonomous Republic is a landlocked exclave of the Republic of Azerbaijan.

Nagorno-Karabakh is a landlocked region in the South Caucasus. Most of the region is governed by the Nagorno-Karabakh Republic, a de facto independent but unrecognised state established on the basis of the Nagorno-Karabakh Autonomous Oblast that was part of the Azerbaijan SSR in the Soviet Union. Azerbaijan has not exercised political authority over the region since the advent of the Karabakh movement in 1988.

Since the end of the first Nagorno-Karabakh War in 1994, representatives of the governments of Armenia and Azerbaijan had been holding peace talks mediated by the OSCE Minsk Group on the region’s disputed status.

The regional security situation deteriorated during 2014 when skirmishing broke out over Nagorno-Karabakh between Azerbaijan and neighbouring Armenia. Armenia occupied the disputed enclave.  In September 2020, a war broke out due to the Nagorno-Karabakh conflict, with Armenian and Azerbaijanian forces clashing. A November 2020 ceasefire agreement ended the six-week war.

With most of the former Soviet Union polarised increasingly between states leaning towards the EU and those joining the Russian-led Eurasian Economic Community, Azerbaijan is attempting to follow an independent path.

But its foreign policy is officially described as “integration into European and Transatlantic security and cooperation structures including NATO, the EU, the Western European Union and the Council of Europe,” while also maintaining equal partnership relations with regional neighbours.

The launch of instant payments, a high mobile phone penetration rate and the continuing roll-out of contactless cards from a low number are the main trends driving digital payments in Azerbaijan in 2023, with several mobile payment initiatives being implemented with international payment schemes. It is expected that e-commerce volume and values will rise significantly over the next few years, thanks to bank efforts to expand mobile banking and app usage among Azeri consumers.

Banking Sector

Established in 1992 and renamed in 2009, the Central Bank of the Republic of Azerbaijan (CBA) is a state-owned independent legal entity operating in accordance with the Constitutional Law, the Law on the Central Bank of the Republic of Azerbaijan and the Law on Banks of the Republic of Azerbaijan. The Central Bank’s Credit Institutions Supervision Department, FIMSA, supervises the banking sector within Azerbaijan.

Payment systems in Azerbaijan are regulated by “Civil Code”, “Law of Azerbaijan Republic on banks”, “Rules on issuance of permissions and supervision of processing systems”, “Rules on security of information systems of banks” “Rules on issuance and use of payment cards”, and “Charter of FIMSA”.

As well as its strategic location between East and West, Azerbaijan is important because of its large reserves of oil and gas, which have enabled the economy to grow rapidly for most of the period following the break-up of the Soviet Union.

Azerbaijan’s President Ilham Aliyev has thrown his weight behind modernisation of the country’s payments system, through a series of presidential decrees supervised by CBA which is mandated to lift the level of cashless payments to those prevailing in developed countries. With support from the World Bank, the post office utility, Azerpost, is also being modernised to provide financial services, and has won recognition from Universal Postal Union for its progressive approach.

After the GDP decline in 2016, economic growth in Azerbaijan was almost flat in 2017 and 2018, rising slightly to 2.2% in 2019. GDP for 2020 was initially estimated to fall by around 3%, but the economic impact of the COVID-19 pandemic led to GDP falling by 4.3%. In 2021, GDP recovered to grow by 5.6%, largely driven by rising oil prices and gas exports. In 2022, GDP grew by 4.6% driven by non-energy sectors, supported by recovering demand and fiscal expansion. The fiscal accounts were buoyed by high global energy prices in 2022. The World Bank had expected growth to moderate to 2.2% in 2023. Against expectations, the rate of economic growth slowed to 1.1% in 2023 due to lower energy prices, declining oil production and subdued growth in the non-oil sector.

Since April 2017, exchange rate fluctuations have remained within a narrow band amid stringent monetary conditions and a recovery in the oil price. Inflation rose slightly from 2.3% in 2018 to 2.4% in 2019, and to 2.6% in 2020, largely due to a rise in food prices globally. Low non-food inflation was mainly attributable to deferred demand due to the pandemic. By 2021, average annual inflation was 6.7%, primarily driven by an increase in consumption in the non-oil economy. In 2022, inflation accelerated sharply to 13.8%, driven by the impact of import prices on food. Inflation softened to 8.2% in 2023 due to monetary policy tightening.

Bank Sector Consolidation – Commenting in late 2012 on banking sector consolidation to date, the CBA chairman, Elman Rustamov, noted that over the previous 15 years, the number of Azerbaijan banks had fallen from 250 to 43 and called for the process to be completed, not least to match the scale of the country’s economy, which has grown threefold since 2003. However, in 2013 the share of banking sector assets controlled by the 32 smallest banks increased to 32% from 24% in 2012.

CBA announced in July 2012 that the minimum total capital requirement for existing banks and authorised capital of newly established banks would increase from AZN 10 million to AZN 50 million from January 2014. The process was designed to lead to 15 or so large and mid-sized banks.

In January 2016, the licenses of six banks were revoked by the CBA as part of the banking system restructuring: Teknika Bank, Atra Bank, Bank of Azerbaijan, Gandja Bank, United Credit Bank, and NBC Bank. In July 2016, CBA revoked the banking licenses of Dekabank, Kredobank, Parabank, and Zaminbank. In September 2016, the license of Bank Standard was revoked.

In February 2017, FIMSA, the Swiss Secretariat for Economic Affairs (SECO) and the World Bank launched the second phase of the Financial Sector Modernisation Project (FSMP2). The objective of the Project was to support stabilisation and development of Azerbaijan’s financial sector by enhancing the legal and regulatory framework, strengthening FIMSA supervisory capacity and improving the financial safety net to protect the interests of depositors and financial services to consumers.

Structure

In 2023, there were 26 commercial banks operating in Azerbaijan, including two state banks, 21 private banks and 9 banks with foreign capital. In addition, there are two branches of foreign banks and four representative offices of foreign banks. Additionally, 55 non-bank credit institutions, and 40 credit unions operate in the country. The banking sector is fully privatised apart from IBA and one other state-owned bank, though several private banks are owned by families close to the ruling elite.

1 - Banks in Azerbaijan
	2018	2019	2020	2021	2022	2023
Number of banks	30	30	26	26	25	23
State-owned	2	2	2	2	2	2
Private	28	28	24	24	23	21
- with foreign capital	15	14	12	12	10	9
- with 50%+ foreign capital	8	7	7	7	6	5
Bank branches	508	509	455	479	487	475
Source: Central Bank of Azerbaijan (CBA).

The Azerbaijan banking sector avoided upheavals such as those in Ukraine and Kazakhstan during the period of the global financial crisis. The sector is dominated by the state-controlled International Bank of Azerbaijan (IBA), which accounted for 27.9% of total banking sector assets as at end-2023. Assets of banks with foreign capital accounted for 15% of total banking sector assets in 2021. By 2023, among the banks in operation, 9 banks had foreign capital participation in their capital structure.

The five largest banks represent 73.8% of the total bank assets in Azerbaijan, but with a total of 23 banks at end-2023, there is a long tail of small-scale operations. According to CBA, the national network amounted to 475 bank branches at end-2023, down from 509 in 2019.

In 2017, AtaBank merged with Caspian Development Bank. DemirBank’s license was revoked in December 2017.  Parabank’s license was revoked in 2016. However, the non-bank credit organisation PARA appeared in Azerbaijan in March 2017. In fact, this is the first bank in the history of the Azerbaijani banking sector that turned into a non-bank credit organisation. The process of abolishing banks’ licenses ended in 2017.

In 2020 banks’ restructuring continued in accordance with the ‘Strategic Roadmap on development of financial services in the Republic of Azerbaijan’. Measures to rehabilitate and capitalise the banking sector were continued to support lending. In general, banks increased share capital by AZN131.7 million in 2020, with the banking sector’s capital adequacy exceeding the regulatory requirement by more than two times.

In 2020, Azerbaijan’s central bank revoked licences of four banks whose capital position was negatively zoned with no recovery potential (AtaBank, AmrahBank, AGBank and NBCBank) and the banks were declared bankrupt by a court decision.

2 - Major Banks in Azerbaijan in 2023
Bank	Ownership	Assets (AZNm)	Assets ($m)	Assets in %
International Bank of Azerbaijan (IBA)	State: 96.37%; others: 3.63%	13,668.2	8,040	27.9%
PASHA Bank	Pasha Group (AZ): 57%, Bless (AZ): 28%, investor (AZ): 15%	8,651.4	5,089	17.6%
Kapital Bank	Pasha Group (AZ):81.08%, others: 18.92%	8,659.6	5,094	17.7%
Xalq Bank	Ideal Business-Ko: 50%, EuroStandard:33.85%, Amal Invest: 16.15%	3,082.6	1,813	6.3%
Bank Respublika	Guliyev Family: 90.25%, SIDT (D):4.22%	2,131.0	1,254	4.3%
UniBank	Eldar Garibov: 87.03%, Others: 12.97%	1,590.7	936	3.2%
AccessBank	ADB: 19.9% EIB: 17.4%, IFC: 16.56%, Others: 46.14%	1,392.3	819	2.8%
Azer Turk Bank	Azerbaijan Republic: 75%, Ziraat Bank 13.5%, others: 11.5%	995.5	586	2.0%
RabitaBank	private investors (AZ)	1,138.5	670	2.3%
Yelo Bank	Marina Kulishova: 98.94%, Investor (AZ): 1.06%	1,566.5	921	3.2%
TuranBank	Eight companies (41.90%) and 20 private investors (58.10%)	822.8	484	1.7%
Muganbank	Mehdiyev's Family: 89.35, Vafa Valiyeva: 10.65%	Oluwadara Olunuga: Bank has been liquidated	-	0.0%
ASB Bank	Anadolu Investment (TR): 98.43%, others: 1.57%		-	0.0%
Bank of Baku	NAB Holding: 35%, Private Investors: 28.89%, Individual Investors: 36.11%	870.9	512	1.8%
Premium Bank	two private investors (84.79%); one legal entity (15.22%)	685.1	403	1.4%
Ziraat Bank Azərbaycan	Ziraat Bankasi: 99.98%, others: 0.02%	636.7	375	1.3%
Yapi Kredi Bank Azerbaijan	YKB: 99.8%, Others: 0.2%	514.9	303	1.0%
Other banks		2,649.8	1,559	5.4%
Total		49,056.4	28,857	100.0%
Note: total banking assets were AZN 38.45bn ($22.62bn) as at end-2021.
Note: the licenses of AtaBank and AGBank were revoked by the Central Bank in early 2020.
Source: Aberbaijan Banks Association.

3 - Azerbaijani Bank Accounts - Key Figures
(000s)	2018	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Number of bank customers	6,335.4	8,342.0	10,349.7	12,181.6	13,535.7	14,654.4	8.3%	18.3%
- individuals	6,233.9	8,227.4	10,238.2	12,059.7	13,395.4	14,513.7	8.3%	18.4%
- businesses	264.4	323.4	392.5	504.9	636.8	712.2	11.8%	21.9%
- legal entities	101.5	114.6	111.5	121.8	140.2	140.2	0.0%	6.7%
Number of customer accounts	17,953.0	21,129.9	24,842.8	26,587.8	32,132.0	39,590.7	23.2%	17.1%
- of which current accounts	14,957.9	17,125.7	20,863.8	22,034.0	25,911.8	31,492.1	21.5%	16.1%
- of which for individuals	14,741.2	16,900.0	20,633.1	21,770.3	25,603.7	25,603.7	0.0%	11.7%
- of which deposit accounts	368.0	396.6	222.6	256.8	299.9	325.6	8.6%	-2.4%
Note: figures from 2018 have been restated, CBA states " The change in indicators is due to the reclassification of data on the number of customers and accounts of statistical units."
Source: Central Bank of Azerbaijan (CBA).

International Bank of Azerbaijan (IBA) is 96.37%-owned by Azerbaijan’s Ministry of Finance, with individuals and foreign shareholders owning the balance of the shares. In its results for 2023, IBA reported 69 branches servicing more than 2.2 million individual customers, and 18,000 legal entities.

IBA plays a key role in Azerbaijan’s payment card infrastructure by virtue of its 100% ownership of AzeriCard, the biggest card processor, formed in 1996. Also, IBA has subsidiaries in Russia and in Georgia.

In 2017, the IBA worked closely with the Ministry of Finance of Azerbaijan, CBA and FIMSA regarding its financial restructuring plan, in order to address issues relating to the IBA’s financial position and the sufficiency of its regulatory capital in accordance with the aims of the Presidential Decree dated 15 July 2015.

IBA began life as the Azerbaijani office of Vnesheconombank of the USSR. It obtained a banking licence from the central bank in 1992 and was converted into a joint stock banking company in 1999. IBA has since established International Bank of Azerbaijan Moscow as a 100%-owned subsidiary, the first active foreign subsidiary of any Azeri bank and also owns 100% of International Bank of Azerbaijan Georgia.

In June 2011, the State Property Committee chose PWC and the law firm Salans to manage the process of privatising IBA. However, the June 2012 deadline set for completing the process expired without any conclusion.

Judging by the trends in its retail and customer accounts, measured in AZN millions, IBA continues to maintain a strong focus on the retail segment.

As of 2023, IBA had 4,817,897 active payment cards, 957 ATMs, and 14,070 POS terminals.

In August 2020, in order to improve business activity of the government-owned organisations, the President of Azerbaijan approved a decree on establishment of Azerbaijan Investment Holding (AIH) and in November 2020, the list of state-owned companies to be transferred to the management of AIH was approved. The transfer of IBA to the management of AIH was approved by a presidential decree in September 2021.

PASHA Bank – Established in 2007, PASHA Bank is the largest private bank in Azerbaijan by total equity, and one of the top three private banks by assets. PASHA Bank is headquartered in Baku and has a total of six business centres and three branches cross Azerbaijan. It opened offices in Georgia (2013) and in Turkey (2014). PASHA Group, the main shareholder of PASHA Bank (57%), has major investments in the construction, real estate, insurance, travel sectors of Azerbaijan’s economy. Other shareholders are Bless (28%), and 2 individual investors (15%).

Kapital Bank – Privatised in 2008 and now controlled by the PASHA Holding conglomerate, Kapital Bank is Azerbaijan’s second-biggest. Formerly United Universal Bank, Kapital was formed by the merger in 2000 of three major government banks in Azerbaijan, Agro-Investment Bank, Industrial-Investment Bank and Savings Bank.

As the successor to Savings Bank, its history dates back to 1874, when the first Savings Bank branch was opened in Baku. In 2023, Kapital Bank had the biggest branch network in Azerbaijan with 118 branches, 25 departments, and more than 5 million individual customers and 22,000 legal entities.

Kapital Bank’s major shareholder is PASHA Group, which owns 99.87% of the bank’s shares, and the bank is ultimately controlled by the PASHAyev family and associates. According to western media reports, shareholders include the family of Azerbaijan’s first lady, Mehriban Aliyeva (born Mehriban PASHAyeva), and her uncle Hafiz PASHAyev, Azerbaijan’s former ambassador to the US.

Xalq Bank – Though founded only in 2004, Xalq Bank has become Azerbaijan’s fourth-biggest bank measured by total bank assets. Xalq is controlled by three shareholders: Ideal Business-Ko (50%), EuroStandard (33.85%) and Amal Invest Group (16.15%). In 2023, Xalq reported 30 branches servicing around 60,000 individual clients.

In January 2021, Xalq Bank launched a new mobile banking app to accompany its internet banking platform XalqOnline, marking the first internet and mobile banking system in the country, serving individual and corporate customers through a single platform.

In mid-2022 Xalq Bank launched XalqKart Petrol and Cashback cards. XalqKart Petrol OIL bonuses on cashless payments everywhere which can then be exchanged for free fuel at Azpetrol gas stations while the Cashback cards allow customers to receive cashback on favourable terms when making various purchases.

Unibank, one of the larger private, independent commercial banks in Azerbaijan, is 87.03%-owned by Eldar Garibov, with the remainder held by minor legal and individual shareholders. As of 2023, the bank had 30 branches.

In 2021, Unibank established Leobank in Azerbaijan as a mobile-only bank. Leo customers are offered a VISA credit card.

Bank Respublica – Sparkassen International Development Trust, part of the Sparkassen-Finanzgruppe, owns 4.22% of Bank Respublika, which was established in 1992. DEG’s investment was made in 2005; the balance of the shares is owned by Azeri shareholders. In 2023, the bank had 33 branches and 12 service points.

With encouragement from the central bank, investment by foreign banks has stepped up in recent years. Turkish banks have been the most prominent, with YapiKredi setting up a subsidiary, YapiKredi Bank Azerbaijan in 1998. Though originally supported by the World Bank’s IFC arm with a 20% shareholding, it is now owned by YapiKredi.

The other significant Turkish-influenced bank, Azer-Turk Bank, was established by T.C. Ziraat Bank and Agrarcredit of Azerbaijan in 1995; T.C. Ziraat Bank retains a 50% interest.

YapiKredi Bank Azerbaijan is principally a corporate bank but reported a network of 7 branches, 1 customer service unit, and 1 exchange office, providing banking services to 140,000 customers as at end-2023. Although trading under the name of YapiKredi, the bank is now owned by the Koc family, a Turkish Group that took over Yapi in Turkey in 2007, with participation from Italy’s UniCredit Bank.

The parent bank said that the rapid growth of the credit card platform at its subsidiary in Azerbaijan was a significant development. Since the launch of the platform in 2012, YapıKredi said it had become a leading bank in the Azerbaijan credit card POS acquiring sector, with a 1.0% market share in 2022 and a 10% credit card volume market share. By 2023, the parent bank claimed a 14.9% market share in number of credit cards and 15.9% market share in POS Acquiring volume (inclusive of ATM)

Bank of Baku – NAB Holding, a Turkish conglomerate, is a founder shareholder (with 35% currently) in Bank of Baku, a progressive mid-sized bank, and was involved in the launch of Bank of Azerbaijan. The oil company Azpetrol owns a further 28.89%. The other shareholders are investor Hikmat Abuzar oglu Ismayilov (31.11%, sole owner of “Azsigorta”), and investor Elchin Hamid oglu Isayev (5%). As of 2023, the bank had 19 branches and three servicing outlets.

VTB Bank (Azerbaijan) – VTB, the Moscow-based banking group whose strategy is to expand into Eurasian countries, purchased 51% of AF-Bank in 2008, changing the name to VTB Bank (Azerbaijan) in February 2009.

VTB Bank (Azerbaijan) provides corporate as well as retail banking services. In 2020, VTB Bank (Azerbaijan) operated five branches. Effective mid-2019, VTB Group (RU) owned 99.99% of the shares in its subsidiary, with 0.01% held by individuals.

Following the outbreak of the Russia-Ukraine conflict, as of mid-2022, VTB said it planned to maintain its presence in Azerbaijan, Armenia, Belarus, and Kazakhstan.

Digital Banking

All retail banks in Azerbaijan offer online banking and mobile banking apps to their clients. In addition, services are provided through AzeriCard’s “MobilBank” service.

There is no bank-independent electronic banking standard in Azerbaijan; each bank offers its own proprietary system for banking purposes. In 2022, the State Statistical Committee recorded internet penetration of 88%. Poor telecom infrastructure, along with low information and communication technology literacy, expensive consumer equipment, and high tariffs for satellite connections remain key obstacles to ensuring greater internet access across the country. Internet remains expensive for most of the population, with Azerbaijan lagging behind its neighbours on indicators such as Internet speed and affordability. In early 2017, the Ministry of Communications followed through with a plan to roll out more free Wi-Fi spots in public areas around central locations in Baku. Only two operators, AzerTelecom and Delta Telecom, are licensed to connect international IP traffic.

There is a positive trend in the development of digital banking in Azerbaijan. As of end-2023, all banks operating in the country, including the AzerPost LLC provide Internet banking. 20 banks are providing mobile banking services. In 2023, total number of transfers from current accounts of bank customers in hard copy and through digital banking was 200 million units, while the value made AZN 340 billion. 73% (137.4 million units) of transfers in terms of number and 77% (AZN 244 billion) in terms of value were conducted through digital banking. This represents YoY growth of 136% and 49% respectively in volume and value of digital transactions from 2021.

Table 4 shows the emerging penetration of communication infrastructure for banking services. At the end of 2023, Azerbaijan had a mobile penetration rate of 107%, with 91.3% of users accessing the internet via mobile phone.

4 - Communications in Azerbaijan
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Fixed telephone lines (000s)	1,499.9	1,485.7	1,484.3	1,483.1	1,487.7	0.3%	0.3%
Mobile cellular subscribers (000s)	10,771.0	10,193.4	10,817.1	10,752.8	10,836.0	0.8%	0.9%
Mobile phone subscriptions per 100 capita	107.0%	102.2%	104.8%	106.9%	107.0%	0.1%	0.6%
Proportion of households with an Internet access	79.1%	84.8%	86.5%	87.1%	88.0%	1.0%	2.4%
Distribution by purposes of Internet use
- of which for: ordering or selling goods and services	3.2%	4.1%	4.6%	5.2%	5.2%	0.0%	10.9%
Purposes and nature of Internet use at enterprises
- of which for: banking and financial services	22.5%	23.0%	24.0%	25.0%	25.0%	0.0%	2.7%
Note: approximately 80% of fixed telephone lines and 70% of mobile subscribers are in urban locations.
Source: The State Statistical Committee of the Republic of Azerbaijan, ITU.

IBA has reported fluctuating numbers for its electronic banking, which it defines as “all services of the bank provided to public via ATMs, information booths, internet banking and mobile banking services.” Among the services are payments to mobile and conventional telecoms providers, internet service providers, instant money transfers and electronic deposits.

Reporting in February 2013, IBA said that 464,900 transactions valued at AZN 14.1 million had been conducted by electronic channels in 2012, compared with 243,800 worth AZN 9.9 million in 2007. IBA added that 90% of 2012 transactions were conducted via ATMs, while 94.5% of the total number of transactions were made to mobile network operators for payment of phone bills. However, the value of these transactions was only AZN 2.63 million, or 18.6% of the total. IBA provided no subsequent updates.

In 2018, IBA launched a new mobile banking app providing digital banking services, IBAm. The digital services include:

• Information about customer accounts
• Types of plastic cards, their status, as well as information on the current balance
• History of transactions on card and current accounts
• Blocking and unblocking plastic cards
• Activation and deactivation of the SMS notification service
• Transfers to cards of both the International Bank of Azerbaijan and cards of many other banks of the country
• Transfers from card to card and from account to account
• Information about the location of bank branches, ATMs and payment terminals
• Constantly updated exchange rates and currency converter
• Payments for utilities, mobile communications, cable television and other services

Additionally, three banks, IBA, Kapital Bank and Bank Respublika have connected to the VISA Token Service technology in Azerbaijan and several more banks are being connected. The VISA Token Service was launched in September 2019, and in May 2021, the CBA and VISA signed an agreement on strategic cooperation to expand digital payments in Azerbaijan.

The new strategic agreement will accelerate the development of non-cash payments in the Azerbaijani market, the introduction of innovative payment solutions, as well as through mobile devices, as well as the implementation of initiatives to expand financial literacy and inclusiveness. In mid-2021, VISA reported that after the launch of the Token Service, there was a 189% increase in the number of mobile payments and a 264% increase in value.

In November 2020, PASHA Bank, along with Mastercard and the Umico mobile app, enabled consumers to pay with in-app cards by scanning barcodes and receive extra bonuses by paying via Masterpass in the Umico mobile app. Consumers can any payment card to the Umico app and to have purchases scanned with barcodes.

In 2018, Kapital Bank launched its BirBank mobile banking app, which by mid-2021 had been downloaded over 3 million times with the bank claiming it is the most popular mobile app in the country. The bank also launched QR code payments and QR code ATM cash withdrawals through the app, and NFC payments for Mastercard cardholders.

In May 2021, Kapital Bank and VISA announced the launch of VISA B2B Connect to address limitations in existing processes by significantly shortening funds settlement speed. VISA B2B Connect enables Kapital Bank and its corporate and business clients to send and receive corporate cross-border business-to-business (B2B) payments quickly, securely, and at a lower operational cost. VISA B2B Connect is currently available in more than 80 markets around the world.

In July 2021 Kapital Bank joined Sberbank’s instant money transfer system, using mobile phone numbers. The service allows customers to transfer money to Kapital Bank cards via Sberbank’s mobile app. In June 2021 Kapital Bank launched Mushtari Bank Mobile, a new mobile banking app for business customers.

In January 2021, Xalq Bank launched a new mobile banking app to accompany its internet banking platform XalqOnline, marking the first internet and mobile banking system in the country, serving individual and corporate customers through a single platform. In May 2021, the bank launched a VISA-branded virtual card activated in its mobile app, enabling users to purchase goods and services online and offline with contactless functionality. Bank and non-bank customers can use the mobile app to use the card.

Over 2021 and 2022, PASHA Bank, Xalq Bank, Kapital Bank, and Bank Respublika launched Google Pay and Apple Pay services for their customers. In 2022, Bank Respublika also introduced Open Banking based on modern authentication models, enabling both the bank and customers to use an expanded portfolio of banking instruments.

In October 2022, the E-PUL Azerbaijani payment system together with Unibank announced the joint issuance of virtual Visa cards that are linked to Apple Pay and Google Pay. The eCards can be used for card-to-card money transfers and to pay for purchases in foreign online stores.

Payment Services

In 2024, the more than 300 different payment services offered in Europe can be grouped into:

• Card brands and card types
• E-Money and prepaid products by issued brand
• Account-based payment services by issued brand, e.g. IBAN-based SCT/SDD services
• Advanced payment services. e.g. wallets by issued brand
• Digital payment services, e.g. digital scheme wallets by issued brand

Card Brands and Card Types

All retail banks in Azerbaijan issue cards. Additionally, salary cards are widely introduced in Azerbaijan. Most cards are internationally-branded and there is no significant domestic scheme.

Azerbaijani card products like consumer cards, commercial cards and purchasing cards range from classic cards to gold cards and platinum cards. Additional card features (e.g. picture cards, bonus points, PIN selection at ATMs and card control by SMS notification) are used to attract cardholders. Also, individual picture cards and collector cards can be issued on demand. Further, card-to-card P2P services have been launched. In 2021 and 2022, the EMV migration continued.

From July 2023, banks and other card issuers will no longer issue Maestro cards. Instead, they will need to issue Debit Mastercard. Maestro was launched in 1991 and was the world’s first debit card that could be used via an online network. About 400 million Maestro cards are in circulation worldwide, mainly across Europe. However, Maestro is not enabled for the demands of e-commerce and cannot be used for online or in-app payments, hence the decision to phase it out in favour of Mastercard Debit products. Visa announced that Electron cards will be phased out globally in 2024. The features of the Visa Debit card have been modified to match the features of the Visa Electron card.

Debit cards issued are Debit Mastercard and VISA Debit cards. There are no V PAY cards in circulation. Additionally, there are domestic AzeriCard cards and Millikart cards.

Credit Cards issued are cards branded VISA, Mastercard, American Express, or UnionPay. The Royal Bank of Baku began issuing JCB cards in 2018.

Prepaid Cards – Leading Azerbaijani banks issue prepaid cards, including virtual prepaid cards for internet use only.

Co-branded cards – In Azerbaijan, few co-branded cards are in circulation.

Contactless Cards and form-factors

Contactless Cards – The banks in Azerbaijan now issue contactless cards. In June 2014, IBA became the first Azeri bank to issue VISA payWave-branded cards, having previously launched Mastercard contactless cards. According to estimates, all plastic cards will have a contactless payment function from early 2022.

In late 2019, the Azericard payment system launched contactless payment services to its bank customers. In mid-2020, VISA and Mastercard stated that around 30% of payments in Azerbaijan are contactless, with the share of cashless transactions growing every year.

Enabling contactless payments in public transit systems is a key element of modernising Azerbaijan’s payment infrastructure. In June 2021, the CBA, Azerbaijan Railway, VISA, and the International Bank of Azerbaijan launched a project on payment of fares in suburban railways, with contactless payment cards issued by any bank, at all stations of the Absheron Ring Railway, which provides high-speed passenger transportation between Baku and Sumgait. Contactless fares can be paid at stations of the circular railway using contactless payment instruments of all banks. In September 2022, Visa stated that 95% of transit passengers in Azerbaijan opt for contactless payments when buying transit tickets. In October 2022, Visa launched Mobility & Transit Transaction (MTT) technology for the first time in Azerbaijan. This technology allows combining payment for travel on public transport for 24 hours in a single transaction, which is deducted by a single payment at the end of the day. This has been launched in all 14 stations of the Baku Ring Route and passengers can pay the fare not only by bank cards but also using devices with built-in NFC-module (phone, watch or payment ring).

In 2022, Kapital Bank, in partnership with Visa, announced the launch of Azerbaijan’s first Mobile POS solution based on Visa Tap to Phone, a technology that turns modern Android smartphones or tablets with an NFC (Near Field Communication) chip into a full-fledged payment terminal for accepting contactless payments.

As of 2022, 9.8 million cards in circulation in Azerbaijan supported contactless payment technology, from 7.5 million in 2021, while the number of POS terminals that accept contactless payments increased by 55.6% to 68,373, representing 85% of the country’s POS terminal network. The number and value of contactless payments increased from 2021 by 2.6 and 2.0 times respectively. As of January 2024, Azerbaijan’s banking sector reported a total of 16.6 million bank cards in circulation, marking a 23% increase from the previous year. Notably, 95.4% of these cards, approximately 15.8 million, support contactless payment technology.

With the launch of Google Pay and Apple Pay services by leading banks in 2021 and 2022, contactless payment usage is rising exponentially. As of end-2023, 17 banks offered the ‘Google Pay’ service, and 4 million payments worth AZN 85.7 million were made through this service in 2022. Payments made through Google Pay in 2023 reached AZN 813.2 million ($478.4 million), marking a 9.5-fold increase compared to 2022. The total number of payments processed via Google Pay rose to 39.6 million, reflecting a 9.9-fold increase from the previous year.

Interchange Fee Arrangements

International and Intra European Non-EEA Interchange Fees are set by the members of the international card schemes to be applied in case of cross-border transactions or foreign cards used in Azerbaijan, respectively. The effective rates of Mastercard and VISA Europe can be found on the respective Mastercard and VISA websites.

Domestic Merchant Interchange Fee (DMIF) for Azerbaijani cards is defined by Mastercard and VISA, respectively.

E-Money 

In April 2018, the CBA and Financial Market Supervision Authority, FIMSA, presented the draft Law on Payment Services and Payment Systems, including Electronic Money. By mid-2021, further progress was made to develop the Draft Law on Payment Services and Payment Systems, although no definite timeline for its expected introduction has been announced.

In July 2019, the government announced the launch of the AzerPay “PostPay” e-wallet system, designed to offer integrated electronic money transfers through the country’s network of regional post offices. Users will be able to take out cash in post offices, while they can also use these locations to add more cash to their e-wallets. In addition to using post offices, customers who sign up to the new service will be able to use their bank cards, such as credit or debit cards, to maintain their e-wallet.

Digital Account-to-Account Payment Services 

In the Yearbooks, account-based payment services are classified as bank payment services on bank accounts offered by banks or by independent payment initiation service providers (PISP).

Credit transfer is an important cashless payment instrument in terms of both volume and value. The majority of all credit transfers are automated. They are used by companies for salary and supplier payments. High-value and urgent credit transfers are cleared and settled via AZIPS, the national RTGS system, in real time. Low-value, non-urgent and high-volume credit transfers are processed via the BCSS on a same-day basis.

Direct debits are used for low-value recurring payments such as utility bills. Their usage is low. Direct debits are processed via the BCSS on a same-day basis.

As in many European countries, bank transfers have been adopted for online payments, enabling consumers to pay direct from their bank account as an alternative service to payment cards.

In October 2020, a 24/7/365 Instant Payment System (IPS) was launched for individuals, businesses, and public institutions to make instant mobile payments. In mid-2021, efforts to expand the infrastructure capacity of the IPS included new IPS functionalities, allow registering customers and their bank accounts to obtain balance information and maintaining operations based upon Open Banking principles for the first time in Azerbaijan.

During 2021, the coverage and functionalities of the IPS expanded, including the creation of QR codes to allow small businesses to accept cashless payments. At the same time, the CBA developed and approved the ‘Methodological Guideline on QR code payments in the Republic of Azerbaijan’.  To support measures on the expansion of the IPS scope and create favourable conditions for participating banks and the national operator of postal communication to stimulate individuals to use opportunities of the system the Central Bank decided not to charge service fees from participating organizations for the use of the system for QR code payments and transfers by individuals (excluding individuals engaged in entrepreneurial activity).

As of 2022, 24 banks, the AzerPost LLC, the State Treasury Agency of the Ministry of Finance and the Mortgage and Credit Guarantee Fund were integrated into the IPS. The number of transactions in the IPS increased by 2.9x in 2022 to 338,000, while the value rose by 95% to AZN 549 million. No update was provided for 2023.

Advanced Payment Services

In the Yearbooks, advanced payment services are classified as online wallets, e-wallets, and/or mobile wallets with any type of payment service chosen by the wallet user to complete the payment.

In selected Azerbaijani online shops, the online wallets PayPal, Yandex and Webmoney are offered as payment means.

PayPal – Currently, Azerbaijani consumers can send money using PayPal to 59 countries abroad but cannot receive payments. As of end-2023, PayPal reported 426 million active customer accounts globally, down 2% from 435 million in 2022. This consisted of 391 million customer active accounts and 35 million merchant active accounts across approximately 200 markets. PayPal’s total payment volume increased to $1.53 trillion (up 12% from 2022) and customer engagement grew to an average of 58 transactions per active account, driving 14% growth in transactions per active account at the end of 2023.

During 2020, with consumers worldwide embracing digital wallet capabilities, the company launched several related services including QR Code Checkout, Buy Now Pay Later, Crypto purchasing, and Xoom direct transfers to bank accounts and debit cards.

In June 2018, PayPal continued its shopping spree with a $400 million cash deal to acquire e-commerce platform Hyperwallet. The acquisition followed deals to buy Venmo, Xoom, Sweden’s iZettle (renamed Zettle) for $2.2 billion and AI-based merchant marketing outfit Jetlore, as PayPal bids to extend its reach to all corners of the payments market.

In May 2022, PayPal Ventures invested in Modulr, an embedded payments platform for digital businesses, as part of a $108 million Series C funding round led by General Atlantic, Blenheim Chalcot, Frog Capital, and Highland Europe. Modulr delivers payments infrastructure for over 200 top-tier customers, including Revolut, Wagestream, Sage and BrightPay, and processes an annualised transaction value of more than £100 billion. In 2023, PayPal is exploring the sale of Xoom, its international money transfer subsidiary, in a bid to cut costs and focus on high-growth business areas. Also, Stax Payments – an all-in-one payment provider for businesses – announced its partnership with PayPal in July 2023. This partnership will allow PayPal’s users to easily make payments with more than 20,000 merchants of Stax through a fast checkout process as well as new payment options such as Buy-now-pay-later solutions.

In 2023, PayPal launched its own US dollar-denominated stablecoin, PayPal USD (PYUSD), which is fully backed by US dollar deposits, short-term US treasuries, and similar cash equivalents and designed for digital payments and Web3. Eligible US PayPal customers who purchase PayPal USD will be able to transfer the token to external wallets, send person-to-person payments, fund purchases at checkouts supported by PayPal, and convert cryptocurrency holdings to and from PayPal USD.

In January 2024, PayPal launched AI-powered features to drive personalised offerings for both merchants and customers based on the data it possesses. These features include Smart Receipts (for merchants) which predicts what shoppers may want to buy next from the merchant. The merchant can then offer personalised recommendations and cashback offers on this receipt. A major feature for users is CashPass which will use give users personalized cashback offers based on an AI analysis of their spending activity.

In March 2024, PayPal launched a complete suite of payment processing tools for online small businesses in the UK, Canada, and across more than 20 European markets. The PayPal Complete Payments package enables small businesses to accept an expanded range of payment instruments including PayPal, buy now pay later, Apple Pay, Google Pay, credit and debit cards, and alternative payment methods from around the world. By April 2024, PayPal added new features to its complete payments solution for small businesses to enable small businesses to accept a range of payments including PayPal, Venmo and PayPal Pay Later products. PayPal also gave small businesses access to four new features to help them drive payment acceptance and enhance how they run their business, and this will include Apple Pay as a checkout option.

Digital Payment Services

In the Yearbooks, digital payment services are classified as card-based payment services using EMV tokenisation security on the internet combined with HCE NFC technology in case of contactless payments at POS terminals.

As of mid-2021, the Click to Pay online payment checkout service was not yet available in Azerbaijan. Click to Pay replaces the previous MasterPass and VISA Checkout services respectively. Click to Pay is a joint service between Mastercard, Visa, Discover, and American Express, enabling consumers to make secure one-click payments without having to enter card details or passwords online.

Contactless payments on cards using Apple Pay, Samsung Pay, or Google Pay (previously Android Pay) made by foreign users at contactless POS terminals in Azerbaijan are processed as payments on contactless cards.

Global contactless transaction values will reach $10 trillion by 2027, up from $4.6 trillion in 2022, with contactless mobile and wearable payments expected to grow by 221% and contactless card payments by 119% over the same period.

Contactless ticketing spend will increase by more than 440% globally between 2022 and 2027, with growing prominence and support for OEM pay solutions, such as Apple Pay, Google Pay and Samsung Pay being a key enabler for mobile NFC ticketing across many markets.

Overall growth in contactless transaction values will be catalysed by growing mobile payments adoption, with 99% of all smartphones capable of making contactless payments by 2027, up from 94% today, and average transaction values for Apple Pay reaching $28.20 and $33.40 for Google Pay.

Apple Pay has become one of the world’s most used digital payment methods. Its user base increased from 521.4 million to 535.8 million in 2022. By 2024, the total number of Apple Pay users was estimated at 640 million and is projected to exceed 700 million by 2027,

According to Apple’s Q2 last 2022, they saw a record of transactions with more than 1.8 billion processed during the quarter, up 40% year-over-year. This payment method is also available in over 90% of the US and 60% of stores globally.

Apple Pay is the #1 most popular digital wallet with a 92% market share, processing a global total of $6 trillion in payments in 2022 and produced a revenue of $1.9 billion.

As of 2023, Apple Pay processed 14.2% of all online consumer payments and 3.5% of all in-store purchases.

Around 51% of global iPhone users have enabled Apple Pay in 2022. There are 10 million Apple Pay-friendly contactless payment terminals worldwide.

The transactions made using Apple Pay are mostly in-store purchases, online transactions, and peer-to-peer payments. It is trendy for contactless payments, especially during the COVID-19 pandemic.

There were about 38 million Apple Pay users in the United States as Apple Pay has gained popularity since its launch in 2014, accounting for 43.2% of mobile payment users. These numbers expect to increase and grow up to 101.2 million this 2023.

Putting it all together, Apple Pay is increasingly becoming an effective customer acquisition and retention feature for Apple. In June 2022, Apple Pay added Apple Pay Later, its own buy-now-pay-later service, allowing users to split purchases into four equal instalments with no interest or fees. Initially launched in the US, the service is expected to roll out to other countries during 2023. In 2023, Apple launched its Card savings account from Goldman Sachs with a 4.15% annual percentage yield. Apple Wallet users can set up and manage a savings account directly from Apple Card in Wallet, with no fees, no minimum deposits, and no minimum balance requirements.

As of November-2024, 14 banks in the country supported Apple Pay. According to the CBA, 21.8 million payments in the amount of AZN 658 million were made via Apple Pay in 2022.

Google Pay has 150 million active users across 42 global markets.

In January 2022, it was reported that the company was planning to transform Google Pay into a “comprehensive digital wallet”, following the app’s reported slow growth and the shutdown of Plex. In April, it was reported that Google was planning to revive the “Google Wallet” branding in a new app or interface and integrated with Google Pay. Google officially announced Google Wallet on May 11, 2022, at the 2022 Google I/O keynote. The app began rolling out on Android smartphones on July 18, replacing the 2018 app and co-existing with the 2020 Google Pay app in the US. While the app name itself was changed from Google Pay to Google Wallet, the service name of actually paying for things online or in-store remains “Google Pay”.

In the US, Google Pay has over 25.2 million users.  Also, Google Pay is used on nearly 800,000 websites as a secure payment gateway. Roughly 20% of all mobile purchases are made using this digital payment processor.

As of November-2024, 17 banks in Azerbaijan supported Google Pay.

Samsung Pay is available in 29 countries worldwide and has an estimated 140 million users. Samsung Pay works with Galaxy phones, including the latest Galaxy S22. Samsung claims that its system will work with almost all point-of-sale systems: NFC, magnetic stripe, and EMV (Europay, Mastercard and Visa) terminals for chip-based cards. In June 2022, Samsung Pay was renamed to Samsung Wallet in the US, UK, France, Germany, Italy, and Spain. Along with the renaming came new features such as the ability to store digital assets and digital keys within the Wallet app.

Samsung Pay is not yet available in Azerbaijan.

Overview of Cashless Payments

Cash is the predominant method of payment in Azerbaijan for both individuals and companies. Credit transfer is an important cashless payment instrument in terms of both volume and value. The use of direct debits is low.

The use of payment cards in Azerbaijan, particularly debit cards, has increased rapidly in recent years.

Cheques are only issued to juridical persons (legal entities) and not to individuals. They can only be used for the purpose of cash withdrawal from accounts.

Exchange Rates

The Azerbaijani currency is the new Manat (AZN), established in 2006.

5 - Average Exchange Rates
	2018	2019	2020	2021	2022	2023
1 EUR in AZN	2.0093	1.9037	1.9398	2.0125	1.7929	1.8766
1 USD in AZN	1.7000	1.7000	1.7000	1.7000	1.7000	1.7000
Note: all figures have been restated.
Source: Central Bank of Azerbaijan (CBAR).

Market Infrastructure

Central Bank of Republic of Azerbaijan (CBA)

CBA, the central bank, has been mandated by Azerbaijan’s President Ilham Aliyev to promote electronic payments, with a focus on payments for state services and the extension of payment facilities to the mass market. In May 2013, first deputy governor Alim Guliyev reported that CBA had delivered to the government a package of complex measures on stimulation of cashless payments, expansion of cashless payments infrastructure and enhancement of the legal basis.

Guliyev said that IT systems of public institutions had been integrated with the National Payment System within the e-Government structure, with the key step being transformation of the Government Payment Portal (GPP) – created by CBA – into a unified payment platform to accept taxes, duties, rent fees, administrative fines, and other budget payments.

In 2022, the GPP continued to expand in the reported period, with 11 central executive power institutions, 3 state agencies, 4 utility enterprises, 5 landline, and mobile operators, 122 judicial bodies, 19 insurance companies, 1,438 municipal bodies, and other Socially important institutions integrated to the GPP. Payments are made for over 1,100 services with the institutions integrated into the GPP via 26 banks and about 2,500 payment points of AzerPost, about 4,000 payment terminals in cash and digitally. The total volume of transactions conducted over the GPP amounted to 85 million units (+42% Vs 2021) for a total value of AZN 5 billion in 2022, a growth of 23% from 2021, and comprising 62% of all cashless payments, an increase of 58% from 2021. Np update for 2023 as of the time of writing this report.

The process of driving towards cashless payments began when CBA was given responsibility for the implementation of Azerbaijan’s ‘State Programme on Development of National Payment System in the Republic of Azerbaijan in 2005-2007.’

The broad objectives of the 2005-2007 programme were to ensure usage of electronic payment systems by all businesses and individuals in general; to create a single electronic payment area covering the entire country; to improve access to financial services; and to replace cash in circulation with non-cash means of payment.

Within CBA, the key unit is the Payment Systems and Settlements Department. Its mission is described as “to create up-to-date digital payment systems, ensure their stable and non-stop operation, permanently develop and improve them given international trends.”

The principal components of the Azerbaijani payment system are AZIPS (Azerbaijan Interbank Payment System, which manages the RTGS system), XOHKS (the Retail Payment System, formerly BCSS) and KOMIS (Centralised Information System of Mass Payments – see below), all of which are owned and managed by CBA.

AZIPS is constructed on the basis of the SWIFT network. All banks and some government departments are system members, along with Azerpost branches. All banks are likewise members of XOHKS. KOMIS infrastructure supports APUS, the Azeri public utilities payment system, which enables users to pay utility companies online at the website www.apus.az (see below). By mid-2012 Azerpost and all the banks were linked to APUS. Gas, water and electricity service payments formed the bulk of APUS transactions (see below) and unofficial estimates are that more than 4 million Azeri are KOMIS users.

In May 2012, the newly-formed National Payment Council held its first meeting. NPC’s members are drawn from CBA, the Ministry of Taxes, the Ministry of Communication and Information Technologies, the Ministry of Customs, the State Securities Committee and top commercial banks.

According to CBA, NPC was launched at the direct instigation of President Aliyev “to coordinate the work needed to increase the volume of cashless turnover in the country, alignment of payment card utilisation to the level of developed countries, integration of public structures to the National Payment System within the e-Government framework, as well as involvement of all economic agents and the broad population to more active use of e-payment services.”

The president’s office is well aware of the importance of a modernised payments system and has issued several decrees since the 2005-2007 plan, including ‘On Some Measures to Organize e-services of Public Institutions’ (2012) and ‘On some measures on organisation of electronic services by state bodies’ (2011). These call for real time e-payment of duties and other payments, not only to improve efficiency, but also to reduce corruption.

The State Program on Expansion of Digital Payments in the Republic of Azerbaijan for 2018-2020 is strategically aiming to significantly expand the cashless payments in the economy and reduce the volume of cash payments, to strengthen the base of financial resources of the banking sector, and to reduce transactional costs associated with cash circulation.

The Program covers systematic and comprehensive reform efforts aimed at elimination of institutional factors that prevent the development of digital payments, improvement of financial intermediation, introduction of innovative payment systems, and strengthening of financial inclusion.

As a result of the Program, annual volume of cashless payments is expected to increase by approximately AZN 17 billion, corresponding to 7% increase in the share of cashless payments annually. The total share of cash payments in economic transactions is expected to decrease from 74% to 40% in five years upon implementation.

In 2020, the CBA together with the representatives of the SWIFT developed an action plan for the financial system to transit to the ISO2002 standard, which will allow the establishment of single data formats on exchange among payment system participants, minimisation of risks in payment transactions, decrease resources allocated to automation (finance, time, human), and creation of wide reporting functionalities.

Also during 2020, in an effort to promote financial inclusion, the CBA together with the Azerbaijan Bank Association, developed and introduced a free package of basic banking services proposals for low-income groups, including free opening of bank accounts for low income groups, delivery of free debit payment cards, no service fees on encashment operations, no service fee on payments made via e-banking services and a number of other discounts.

By 2021, as a consequence of measures taken in the State Program on Digital Payments, the CBA reported that card infrastructure had been improved, cashless payments increased, and the blockchain-based Digital Identification System had been developed. As a result, the Digital Payments Strategy of the Central Bank of Azerbaijan for 2021-2023 has been developed.

The main goal of the Digital Payment Strategy is to provide convenient and affordable payment services for government, businesses, and citizens. The strategy has set a goal to annually increase the share of non-cash payments in total turnover by 5%. Within the framework of this strategy, the adoption of legislation on payment services and payment systems, the introduction of the ISO 2002 standard, the preparation of unified API standards, and the creation and commissioning of the Know Your Customer (e-KYS) electronic system are being considered.

For 2023, the CBA targets to increase the weight of electronic banking in customer transfers from current accounts to 85%, the total market share of cards that support contactless payments to 75%, and the weight of cashless circulation in domestic operations to 48%

Centralised Credit Registry (CCR)

The CBA is responsible for administration of the country’s Centralised Credit Registry (CCR), which developed strongly from 2010 onwards after five years of low-key operations since its launch in 2005. Growth in 2012 and 2013 in particular reflects the widening of the credit card market by mid-sized banks such as Bank Respublika, DemirBank and Bank of Baku.

In 2018, the CCR became the Azerbaijan Credit Bureau in partnership with eight banks. As of November 2024, ACB, being one of the main components of the financial infrastructure, has signed contracts to exchange information with 257 organizations that include Central Bank of the Republic of Azerbaijan, the Ministry of Internal Affairs, State Tax Service under the Ministry of Economy of the Republic of Azerbaijan, Ministry of Justice of the Republic of Azerbaijan, Mortgage and Credit Guarantee Fund of the Republic of Azerbaijan, Ministry of Labour and Social Protection of Population of the Republic of Azerbaijan, 22 banks, 24 banks that are in liquidation process, 56 non-bank credit organizations, 9 non-bank credit organisations that are in liquidation process, 37 credit unions, one credit union that is in liquidation process, 20 leasing companies, 15 insurance companies, seven insurance companies under liquidation process, 3 mobile, 3 utility services operators, 46 retail companies, 5 factoring, one collector and 2 Lombard companies.

MilliKart

The National Card Processing Center, MilliKart, was created by CBA with the aim of developing card payments and completing the architecture of the National Payment System. It was launched in 2005 as a department of the CBA.

In 2006, this became MilliKart, formed by 18 banks with share capital of AZN 4 million. In January 2009, the EBRD acquired a 10% stake of MilliKart’s capital.

MilliKart is certified by VISA and Mastercard as a card personalisation bureau and third-party processor. DemirBank and Unibank were the first banks to migrate their processing fully to MilliKart. Azerpost is also a MilliKart card processing customer.

In 2023, MilliKart reported 358 ATMs, 25,977 POS terminals, and 519,863 cards serviced. In 2023, MilliKart described its transactions as follows: support of active card accounts, 90%; support of POS terminals, 83%; card personalisation, 90%; SMS banking, 75%; printing PIN envelopes, 90%.

To help support MilliKart’s mission, the CBA established the Interbank Card Centre (ICC) with the mission to “increase the effectiveness and safety of card payments.” All banks and card processing centres operating in the country are ICO members. AzeriKard LLC, MilliKart LLC, Kapital Bank OJSC, and Yapı Kredi Bank Azerbaijan CJSC are directly integrated to the ICO infrastructure, while exchange of information with other banks is maintained via the service centres which work for them.

AzeriCard

Now wholly-owned by International Bank of Azerbaijan, AzeriCard is the biggest and longest-established card processor in Azerbaijan. AzeriCard is the first Processing Centre in Azerbaijan completely certified by international payment schemes: Mastercard, VISA, American Express, Diners Club, JCB and UnionPay.

AzeriCard actively implements new state-of-the-art, high-technology projects such as: municipal transport payments by contactless bank cards, payments for telecom services, communal payments, customs and tax payments, Internet and Mobile Banking, Card-to-Card transfers (Kart Transfer, VISA Direct, Mastercard Money Send), insurance and deposit payments via ATMs, different Loyalty programs, Multicurrency card and others, including 3D Secure for e-commerce.

At end-2023, AzeriCard provided its processing services for 17 banks in Azerbaijan and abroad. In 2016, AzeriCard stated that it handled transactions through more than 1,700 ATMs and more than 40,000 POS-terminals in shops and cash-paying departments. During 2016, AzeriCard processed 2.2 million cards. Subsequent updates were not provided.

With the start-up of MilliKart, AzeriCard had lost about 0.5 million cards, 100 ATMs and 1,000 POS terminals by mid-2010. In June 2013, Bank Standard announced the migration of its cards, amounting to about 50,000, to its own processing centre, and said it had sold its AzeriCard shareholding to IBA. Kapital Bank was reported to be migrating its 2.2 million cards portfolio in-house as long ago as May 2009.

Core functions of AzeriCard are clearing and authorisation of card transactions, embossing and encoding of plastic cards. International transactions are settled through correspondent accounts, via the relevant card organisation, while settlement for domestic transactions is done through CBA.

The integration of IBA into APUS, the national utility payments system went live in January 2010, enabling bank cards to be used for paying electricity, gas, water and other utility bills as well. AzeriCard has connected a number of online merchants to its processing centre, particularly mobile network operators and internet service providers. During 2009, AzeriCard completed integration of all cards operating in its system into 3D-Secure technology, with the 3D password being made available through ATMs for use on the internet.

Other AzeriCard services and projects include municipal transport payments by contactless cards, internet and mobile banking, card-to-card transfers, insurance and deposit payments via ATMs, loyalty programmes and multicurrency cards.

In January 2013, with the support of OpenWay’s WAY4 Cash by Code technology, AzeriCard launched a new service, “Cash by Code” through “MobilBank”, enabling cash withdrawals and transfers at ATMs using only a mobile phone. Users can download the MobilBank application to their mobile phone from the AzeriCard website, or from Google or Apple. In August 2013, AzeriCard said the service was being activated by 600 new users every month.

To use this service, the cardholder selects “Cash by Code” in the main menu of “MobilBank” in his mobile, then selects the currency and enters a sum to be transferred. The system creates a special code. The “MobilBank” user can withdraw cash from the ATM using this code or pass the code to the recipient in any convenient and secure way. The recipient enters the code at an ATM and gets money even without a card.

Clients offering “Cash by Code” to customers in August 2013 included IBA, AGBank, Bank Respublika, Bank Technique, Nikoil, Parabank, Turan, Amrahbank, ATA Bank, Silk Way Bank, Bank of Azerbaijan, and Xalq Bank.

In July 2020, AzeriCard launched contactless NFC payments for smartphones. Customers of its bank partners can download their bank’s mobile payments app to make NFC payments at POS locations.

In November 2020, AzeriCard and VISA signed a partnership agreement to develop innovative payment solutions and digital payment services in Azerbaijan.

In January 2021, AzeriCard began developing a new mobile app for bank clients, which will combine the services of all banks served by AzeriCard and will simplify the use of all banking services for clients. At the initial stage, the application will integrate the services of banks that are most ready for the conditions of open banking. The project is being implemented jointly with VISA.

In August 2022, AzeriCard announced that Google Pay was available for partner banks of AzeriCard.

AzerPost

With most of its 1,500 branches across Azerbaijan offering financial services options in 2023, Azerpost has been given the task by government of providing basic financial services, under a universal service obligation, in rural areas without a banking presence. Azerpost received the necessary licences in April 2010, including debit and credit card issuance. Issuance of Mastercard cards began in 2013, when Azerpost issued 9,684 Mastercard-branded payment cards.

Over the three years to 2010, Azerpost received $8 million of funding from central government and $17.75 million from the World Bank’s IDA to upgrade its systems and reported that 1,200 of its branches were fully automated and connected to the central network at end-2010. Azerpost is recognised by the Universal Postal Union as one of the most ambitious developing country postal financial services suppliers.

Specific tasks under the World Bank/IDA programme are:

• Development of financial services, including electronic payments (benefits, social allowances, money transfers, etc.), collecting of payments (utility payments), deposits, improvement of money transfers and issuance of debit cards
• E-government services – issuance of certificates and business and personal documents by local government agencies and collection of taxes and duties
• E-business services – e-trade, access to internet network and data bases.

Azerpost’s 2010-2012 strategy was to capture 60% of the domestic postal market and 20% of personal financial services. Over the period, it aimed to increase client accounts to at least 500,000 and annual transactions to at least 5 million.

Azerpost began issuance of plastic cards for salary and pension payments in 2011 and expected initially to issue 100,000 cards, with pensions to be distributed via the ATM and cash terminal networks.

For 2012-2015, Azerpost’s strategy was to increase the number of individual accounts to 1 million, create an in-house processing centre and extend the distribution of card-based pensions and salaries in rural areas. CBA, the central bank, sees Azerpost as a key component of the national payment system infrastructure, particularly in rural areas. Apart from the breadth of its overall branch network, 63 post offices were authorised to act as CBA agents.

Azerpost launched electronic domestic and international money transfers in 2003. Azerpost says that electronic transfers are made within 15 minutes, even to rural areas. Many AzerPost branches are connected to the Western Union international money transfer service.

In June 2019, Azerpost launched the PostPay e-wallet in partnership with the Information and Computing Centre (ICC), and the Ministry of Transport, Communications and High Technologies. PostPay is available in all regions and remote locations of Azerbaijan where post offices operate. It is expected that cash transactions conducted by Azerpost will also be carried out via PostPay in the near future.

The PostPay e-wallet is also available as a mobile app and enables users to conduct money transfers, account and balance checks and QR code payments.  In December 2019, Azerpost integrated online payments into its website to encourage online banking and e-commerce.

In March 2022, in order to expand access to financial services in the country, an agent banking model was launched as part of the joint cooperation between Azerpost under the Ministry of Digital Development and Transport and Access Bank. According to the agreement reached between Azerpost and Access Bank, the agent banking project will cover several other regions.

Azeri Public Utilities Payment System (APUS)

Azeri Public Utilities Payment System (APUS) is a unit of the CBA, which enables users to pay utility companies online at the website www.gpp.az or in bank branches, at ATMs and by direct debit. KOMIS, formerly CISMP, the Centralised Information System of Mass Payments, holds details of more than 7 million individuals and companies. Following completion of the electronic subscriber database, APUS was launched in July 2008, with every subscriber being allocated a single registration code. There is no fee for subscribers to the system.

Azerpost and all Azerbaijani banks are linked to KOMIS and the APUS system, along with the four processing centres. Most payments are made with cash through Azerpost branches (see Table 6).

In 2023, the public utilities involved include the state-owned gas and oil group, the electricity producer Azerenergy and the water company AzarSu. The APUS system also enables payments to fourteen government and municipal organisations for fines and taxes. In addition, the system enables payments to four communication companies for payment of mobile and fixed line telecoms bills: Azercell Telecom, Azerfon, Bakcell and Stasionary Phone Services.

As the performance of the APUS System shows, card payments to service providers are still at an emerging stage of development in Azerbaijan. They accounted for 58.05% in 2023, with cash payments for the balance, though this figure rose by 37% between 2022 and 2023.

The number of card payments has grown substantially since 2009. However, in 2022, they amounted to 42.67 million card payments (+95.57% from 2021) compared with 32.04 million cash payments – this latter figure declined by 2.5% from 2021.

The total value of payments to service providers in 2022 was AZN 4.77 billion, giving an ATV per cash payment of AZN 53.29. Taking card payments alone, the 42.67 million made in 2022 amounted to AZN 3,062.45 million (up 35.1% Vs 2021), an ATV per card payment of AZN 71.77 – down 30.9% compared to 2021 thanks to the growing popularity of card payments.

6 - Payments through the APUS Network
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Number of payments (m)	48.84	49.71	54.67	85.02	100.71	18.5%	22.0%
- of which cash payments (m)	35.32	30.58	32.85	32.04	31.47	-1.8%	-1.6%
- of which card payments (m)	13.52	19.14	21.82	42.67	58.46	37.0%	79.8%
Value of payments (AZNm)	3,237.27	3,216.34	3,979.34	4,770.07	5,632.85	18.1%	18.5%
- of which cash payments (AZNm)	1,815.04	1,493.54	1,712.76	1,707.62	1,682.16	-1.5%	-2.7%
- of which card payments (AZNm)	1,422.23	1,722.81	2,266.58	3,062.45	4,134.31	35.0%	54.0%
ATV per cash payment (AZN)	51.39	48.85	52.13	53.29	53.45	0.3%	-1.1%
ATV per card payment (AZN)	105.20	90.02	103.88	71.77	70.72	-1.5%	-14.3%
Source: State Payment Portal of CBA.

APUS Payments Breakdown by Banks – In 2022, Azerpost accounted for 23.02 million (71.86%) of the 32.04 million cash payments on APUS. Headed by Kapital Bank and TuranBank, the other banks recorded a total of 9.01 million (28.14%). In 2022, Kapital Bank accounted for 39.29% of the 42.67 million card payments on APUS.

7 - Number of Cash Payments on APUS By Main Banks
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Azerpost	26,421,491	23,848,062	24,339,359	23,023,947	22,170,475	-3.71%	-3.34%
Kapital Bank	3,000,281	2,112,361	2,995,779	2,840,368	2,880,605	1.42%	6.26%
TuranBank	156,433	930,089	1,792,157	1,655,891	2,548,907	53.93%	74.90%
International Bank of Azerbaijan (IBA)	1,314,512	850,563	1,169,986	1,157,946	1,130,639	-2.36%	-0.31%
Expressbank	824,469	1,088,138	1,007,690	743,327	772,228	3.89%	-2.38%
AFB Bank	488,897	391,389	398,402	280,381	246,016	-12.26%	-14.51%
Xalq Bank (People's Bank)	171,280	134,633	177,955	230,985	254,271	10.08%	8.67%
Naxcivanbank	97,879	91,908	139,813	180,719	252,064	39.48%	38.02%
Azer-Turk Bank	288,958	196,653	111,664	23,697	15,213	-35.80%	-41.50%
Muganbank	192,474	109,839	96,903	82,202	70,835	-13.83%	-19.04%
Bank Respublika	89,032	65,943	85,155	89,514	90,148	0.71%	2.19%
Rabitabank	168,193	85,052	65,761	26,561	16,510	-37.84%	-43.83%
Bank of Baku	27,239	16,173	24,828	30,341	30,763	1.39%	3.53%
NBC Bank	1,335,753	288,412	-	-	-	na	na
Amrahbank	71,236	17,716	-	-	-	na	na
AtaBank	118,141	1,203	-	-	-	na	na
other banks	2,080,041	655,163	447,640	1,675,439	990,541	-40.88%	-13.18%
Total	35,321,179	30,575,966	32,853,092	32,041,318	31,469,214	-1.79%	-1.64%
Note: totals include all other Azerbaijani banks and so are more than the sum of the banks shown.
Note: in 2021, CBA revoked the bank licences of NBC Bank, Amrah Bank and Ata Bank.
Source: State Payment Portal of CBA.

8 - Number of Card Payments on APUS by Main Banks
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Kapital Bank	10,594,831	14,453,227	11,873,742	16,764,555	22,548,326	34.50%	70.09%
International Bank of Azerbaijan (IBA)	272,116	527,627	3,012,663	9,699,330	13,579,062	40.00%	143.51%
Unibank	470,410	1,866,544	2,430,665	8,628,348	12,252,254	42.00%	125.21%
Pasha Bank	420,732	521,246	1,234,222	2,199,437	3,739,043	70.00%	94.40%
Bank of Baku	202,598	187,181	308,649	457,021	600,338	31.36%	39.11%
Yapi Kredi Bank	213,625	203,956	203,493	184,666	211,202	14.37%	10.98%
Bank Respublika	151,959	171,610	201,744	237,832	300,047	26.16%	28.56%
AccessBank	124,515	161,298	192,478	167,265	215,483	28.83%	30.26%
Expressbank	176,111	160,658	154,413	114,942	121,345	5.57%	-5.53%
Azerpost	4,342	6,028	6,246	7,334	8,749	19.30%	27.51%
other banks	887,820	878,440	2,200,992	4,212,146	4,032,532	-4.26%	53.31%
Total	13,519,059	19,137,815	21,819,307	42,672,876	57,608,383	35.00%	79.26%
Source: State Payment Portal of CBA.

Card Issuers – Overview 

The banks in Azerbaijan issue credit cards, charge cards, debit cards and prepaid cards in combination with bank accounts. Addressing the specific needs of personal banking and business banking, the card portfolio is composed of consumer cards, business cards and corporate cards.

Dedicated card products are offered for the individual client segments: families, millennials, students, affluent clients, small business clients, corporate clients, and even basic account clients. The credit cards offered range from classic cards to gold cards and platinum cards.

The Azerbaijani retail banks issue debit cards branded Debit Mastercard, Maestro, VISA Debit or Electron, and delayed debit cards and credit cards branded Mastercard or VISA. International Bank of Azerbaijan was previously the exclusive American Express issuer.

Out of Azerbaijan’s 25 authorised banks, as of January 2016 there were 29 VISA issuers, 27 Mastercard issuers and 23 issuers of both brands. According to CBA, 30 Azeri banks issued cards in 2016. The CBA did not provide subsequent updates.

Other than IBA and Kapital Bank, significant issuers include Xalq Bank, PASHA Bank, Bank of Baku, AtaBank and Yapi Kredi Bank Azerbaijan, all of which have promoted credit cards which have become increasingly popular in recent years. In January 2018, Muganbank started issuing UnionPay cards. Table 9 illustrates the card brands issued by the Azeri banks as of mid-2024.

9 - Leading Card Issuers in Azerbaijan
Domestic Issuers	Issued Card Brands	Owned by
International Bank of Azerbaijan (IBA, incl. AzeriCard)	Mastercard, VISA, AmExp, UnionPay; Debit Mastercard, VISA Debit	state: 96.37%; others: 3.63%
Xalq Bank	Mastercard, VISA; Debit Mastercard, VISA Debit	Ideal Business-Ko: 50%, EuroStandard:33.85%, Amal Invest: 16.15%
Kapital Bank	Mastercard, VISA; Debit Mastercard,VISA Debit	Pasha Group (AZ):88.6%, others: 11.40%
UniBank	Mastercard, VISA; Debit Mastercard	Eldar Garibov: 87.03%, Others: 12.97%
PASHA Bank	Mastercard, VISA; Debit Mastercard, VISA Debit	Pasha Group (AZ): 57%, Bless (AZ): 28%, investor (AZ): 15%
Bank of Baku	Mastercard, VISA; ViSA Debit, Debit Mastercard	NAB Holding: 35%, Private Investors: 28.89%, Individual Investors: 36.11%
AccessBank	Mastercard, VISA; VISA Debit, Debit Mastercard	ADB: 19.9% EIB: 17.4%, IFC: 16.56%, Others: 46.14%
Bank Respublica	Mastercard, VISA; VISA Debit, Debit Mastercard	Guliyev Family: 90.25%, SIDT (D): 4.22%
Express Bank	Mastercard, VISA; VISA Debit, Debit Mastercard	Azenko Group (AZ): 40%, other AZ interests: 60%
VTB Bank Azerbaijan	VISA, Mastercard	VTB Bank (RUS): 51%, AtaHolding (AZ): 49%
YapKredi Bank Azerbaijan	Mastercard; Debit Mastercard	YKB: 99.8%, Others: 0.2%
other banks	Mastercard, VISA; VISA Debit, Debit Mastercard	Private investors
Note: some banks in Azerbaijan issue also domestic AzeriCard cards and local cards (e.g. Millikart cards).
Source: PCM research

Outlook – By mid-2024, Azeri card issuers face the following notable challenges:

• The enactment of the Payment Services and Payment Systems Law in July 2023
• Rollout of contactless cards and online/mobile bank payment services combined with mobile apps
• Implementation of 3D-Secure 2.3, launch of digital wallets, in-app payments, in-store payments
• Competition from card-less payment service providers: PISPs, AISPs, FinTechs
• Tokenisation security combined with HCE NFC and card credentials stored-on-file
• Open Banking ecosystem and demanded access to card accounts (XS2A)

Card Processing and PSPs

In Europe, the payment processing industry is composed of card processors, ATM/POS network hub processors, e-/m-payment service processors (PSPs), and specialised processors (e.g. CSM processors, TSM services).

In Azerbaijan, card issuer processing services range from technical issuer processing, including card printing, to full cardholder processing services. They include all types of cards and card technologies allowing for card use at multiple channels (i.e. at ATMs, POS terminals, on the internet and in-store – mobile payments in the future).

Acquirer processing services in the country range from technical acquirer processing, including POS terminal services, to full merchant processing services.

In 2023, the leading card processors were MilliKar and AzeriCard. Besides, Kapital Bank (KapitalKart), PASHA Bank and YapiKredi Bank operate their own in-house processing centres. Also, Royal Bank operates an in-house processing centre for its ‘Royal Card’ programme. From April 2016, the Interbank Card Centre (ICC) has acted as a domestic payment gateway.

AzeriCard is the card-processing centre owned by the International Bank of Azerbaijan (IBA). AzeriCard is used by 16 banks in Azerbaijan and abroad, to process domestic and international card transactions. It is completely certified by International Payment Systems: Mastercard, Visa, American Express, Diners Club, UnionPay and JCB.

Millikart began its activity as a card processing centre and, like AzeriCard, handles both domestic and international card transactions. Then the company was transformed into a limited liability company with a stable shareholder structure consisting of 18 banks and the EBRD (10%). Millikart provides card processing services to banks, Azerpost, non-bank credit organisations, investing, insurance and other companies.

As of 2023, the participants of the of the charter capital of Millikart AtaBank, Demirbank, Azerbaijan Industrial Bank, Azer-Turk Bank, AccessBank, Bank of Baku, Zaminbank, Turanbank, Amrahbank, Xalq Bank, KredoBank, AccessBank, Para Bokt, Rabitabank, Bank, Respublika, Bank Standard KB, Texnikabank, Unibank, and Urbis Holding participated in Millikart.

Interbank Card Centre – In April 2016, the Central Bank of the Republic of Azerbaijan (CBA) created an Interbank Card Centre (ICC) to ensure full control over the domestic transactions by supporting local VISA and Mastercard branded payment card authorisation, transaction routing, interbank clearing, and settlement, including full cycle of disputes case processing.

Implementation of the ICC started in 2014 and it is now in operation at the CBA. The processing and clearing of transactions on cards issued by the resident banks that were carried out in the country with between processing centres is now performed by the ICC. This process was carried out by the international card schemes (VISA and Mastercard) until this time.

The ICC provides the interface between infrastructures of all organisations involved in processing activity in the country. Thus, domestic transactions with payment cards issued by resident banks are processed through this infrastructure. Alongside this, the infrastructure also ensures the resolution of disputed cases on transactions and clearing and completion of final settlements between participants. Transactions over the ICC are conducted in accordance with the Collective Agreement on Conducting transactions over the ICC, the legislation of the Republic of Azerbaijan.

Online Payment Service Processors (PSPs) 

Online payment service processors (PSPs) are specialised technical processors for all kind of secure online payments and mobile payments. Some of them also offer virtual PSP platform services (VPSP) for bank acquirers who want to take advantage of being a kind of ‘internet network processor’.

Online shops of merchants are directly connected by an API interface or a hosted payment page either to the internet payment gateway of a bank acquirer, or they are connected to multi-acquirers through a PSP.

PSPs usually partner with more than one card acquirer and payment initiation service providers. Core services offered by PSPs may include payment gateways to card acquirers and other online payment service providers, online payment processing, risk management services, and collection services for merchants.

Security technologies applied to ensure secure online card payments include EMV tokenisation and strong 3D-Secure (MCSC, VbV, SafeKey) combined with one-time tokens. For card-less payment services, the security technologies applied include userID/password combined with one-time tokens and online banking access with one-time TAN.

The card processors in Azerbaijan and UniCredit (I) claim to be leading PSPs in Azerbaijan. Launched in December 2008, GoldenPay claims to be the first and largest online payment service provider in the country as of mid-2024, with 300 banking clients and more than 70 non-bank clients.

Acquiring and Acceptance

In Europe, most acquirers offer multi-channel card acceptance and value-added merchant services at POS terminals, MPOS terminals and online shops. The leading acquirers usually offer their services cross-border.

In addition, innovative acquirers also offer the acceptance of card-less payment services based on partner agreements with the issuer of those payment services (e.g. account-based payments, wallets, prepaid products).

Most acquirers either operate their own acquirer systems and ATM/POS/MPOS network service hubs, or they use the processing services of external processors. In order to service online merchants in Europe, they might operate their own PSP processing platforms or they co-operate with one or more specialised online payment service processors (PSPs).

From 2012, Eurasian acquirers compete in their home markets, cross-border in the CIS region, cross-channel at POS terminals and servicing online merchants. From 2016, innovative acquirers started to offer omni-channel and multi-payment acceptance.

By mid-2024, omni-channel acceptance includes the ability to service all channels (i.e. POS/MPOS terminals, mobile in-store, online shops, in-app), and to accept multiple payments means in all of these channels. Multi-payment services demanded by merchants include cards, online bank payments, online wallets, digital wallets, and prepaid products.

Outlook – By mid-2024, Azeri acquirers face the following notable challenges:

• The enactment of the Payment Services and Payment Systems Law in July 2023
• Rollout of contactless POS/MPOS terminals; Interchange++
• Complete acquirer service portfolio beyond cards, i.e. acceptance of card-less payment services
• Omni-channel payment acceptance: POS/MPOS, online, mobile in-app, mobile in-store
• Cross-border competition, omni-channel competition, finding PSP partners and PISP partners
• New security standards: e.g. 3D-Secure 2.0, tokenisation security, Strong Customer Authentication

International Bank of Azerbaijan, Kapital Bank and Xalq Bank are the leading acquirers in Azerbaijan. Others include PASHA Bank, DemirBank, Bank of Baku, and YapKredi Bank (TR). They all acquire Mastercard and VISA brands. IBA was the exclusive American Express acquirer and, from 2016, the exclusive JCB acquirer. UnionPay transactions are acquired by AtaBank, IBA, MilliKart and Azericard as of mid-2024. Table 10 illustrates the card brands accepted by the Azerbaijani acquirers as of mid-2024.

10 - Leading Acquirers in Azerbaijan
Domestic Acquirers	Acceptance Brands offered	Owned by
International Bank of Azerbaijan (IBA)	Mastercard, VISA, American Express, Diners, JCB, UnionPay; Debit Mastercard, Electron	state: 96.37%; others: 3.63%
XALQ Bank	Mastercard, VISA; Electron	Ideal Business-Ko: 50%, EuroStandard:33.85%, Amal Invest: 16.15%
Kapital Bank	Mastercard, VISA; Electron	Eldar Garibov: 87.03%, Others: 12.97%
PASHA Bank	Mastercard, VISA; Electron	Pasha Group (AZ): 57%, Bless (AZ): 28%, investor (AZ): 15%
Bank of Baku	Mastercard, VISA; Electron	NAB Holding: 35%, Private Investors: 28.89%, Individual Investors: 36.11%
YapKredi Bank Azerbaijan	Mastercard, VISA; Electron	YKB: 99.8%, Others: 0.2%
other acquirer banks	Mastercard, VISA; Electron; UnionPay	Private investors
Source: PCM research

ATM Terminal Infrastructure

ATMs are owned by individual banks and form an interoperable national network through AzeriCard. Fees of 1% are typically charged for ‘on-us’ withdrawals and 1.5% for withdrawals at other banks’ ATMs. In respect of interbank obligations arising from ATM transactions, banks receive details of their bilateral clearing positions from AzeriCard each day, and obligations must be settled bilaterally via CBA within two days.

Accepted card brands at most Azerbaijani ATMs are debit cards (Debit Mastercard, Maestro, VISA Debit and Electron) and credit cards (Mastercard, VISA, American Express, Diners, Discover, and JCB). Accepted card brands at ATMs also include Cirrus, Plus, and Pulse. UnionPay cards can be used to withdraw Manat from some ATMs of IBA and MilliKart. The EMV migration of ATM terminals continued.

Based on Azerbaijan’s population of 10.13 million, ATM terminal density is at relatively low levels, and the ATM estate has grown by just 4.46% since 2018. Some 51.9% of ATMs are located in Baku, the capital.

Central Bank of Azerbaijan reported 3,112 ATMs at the end-2023, up by 1.43% from 2022. In 2023, there were 162.40 million cash withdrawals on cards (+27.04% Vs 2022) with a total value of AZN 37.21 billion (+22.91% Vs 2022). The ATV per cash withdrawal accounted for an average of AZB 229.13 (-3.25% Vs 2022), and there were 4,348.9 cash withdrawals on cards per ATM per month over the last year.

11 - ATMs in Azerbaijan
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
ATMs with cash function	2,647	2,715	2,907	3,068	3,112	1.43%	4.46%
- in Baku	1,421	1,429	1,560	1,591	1,621	1.89%	4.05%
- regional	1,226	1,286	1,347	1,477	1,491	0.95%	4.91%
Market share of ATMs in Baku	53.7%	52.6%	53.7%	51.9%	52.1%	0.45%	-0.39%
Ø Number of TXs per ATM per month	2,387.4	2,585.6	2,850.5	3,472.3	4,348.9	25.24%	14.22%
Number of ATM cash withdrawals (000s)	75,832	84,240	99,436	127,837	162,404	27.04%	19.31%
Value of ATM cash withdrawals (AZN m)	16,420	20,156	23,333	30,276	37,212	22.91%	23.07%
ATV per cash withdrawal (AZN)	216.53	239.27	234.65	236.83	229.13	-3.25%	3.15%
# ATM Terminals per 1m capita - Azerbaijan	262.9	272.2	289.9	304.9	307.3	0.79%	4.16%
# ATM Terminals per 1m capita - EA10 total	728.9	713.6	698.7	679.4	706.3	3.96%	-0.17%
Source: Central Bank of Azerbaijan (CBA).

In December 2020, a joint network of ATMs was launched, using the capabilities of the Interbank Card Centre, operated by the CBA, with the aim of expanding financial inclusion. The local banks (AccessBank and Yapi Kredi Bank Azerbaijan, AFB Bank, Azer-Turk Bank, Bank of Baku, Expressbank, Gunay Bank, TuranBank, Unibank, Yelo Bank and Ziraat Bank Azerbaijan) and Azerpocht signed an agreement on the joint use of existing ATM networks.

As a result, customers of these banks will be able to use the joint ATM network of 500 ATMs. The shared network will help to optimise the costs of banks for the network of ATMs with the purpose of providing customers with more affordable financial services.

In 2021, it was made possible to receive pensions and social benefits from ATMs of any bank without paying additional service fees.

POS Terminal Infrastructure

Growth of the Azerbaijani POS acceptance network has been stimulated by official plans for all retailers with monthly sales of more than $1,000 to install EFTPOS terminals.

Accepted card brands at most Azerbaijani POS terminals are debit cards (Debit Mastercard, Maestro, VISA Debit and Electron), and credit cards (Mastercard, VISA, American Express, Diners, Discover, and JCB). UnionPay cards can be accepted at some POS terminals under IBA and Millikart, in Baku and a few other major tourist cities. The EMV migration of POS terminals continued.

Central Bank of Azerbaijan reported 86,383 POS terminals, up by 8.22% from 2022. Over 67.4% of the national POS estates are located in Baku, the capital. The impact of the COVID-19 pandemic can be seen in the rapid rise of POS payments and value. In 2023, there were 416.91 million POS payments in Azerbaijan with domestic and foreign cards (+109.33% Vs 2022) with a total value AZN 11,674.00 billion (+59.33% Vs 2022) giving 402.2 POS payments per POS terminal per month on average (+93.43% Vs 2022). The ATV per POS payment on cards accounted for an average of AZN 28.00, down by 23.89% from 2022.

12 - POS Terminals in Azerbaijan
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
POS terminals	67,468	57,120	60,936	79,820	86,383	8.22%	5.50%
- in Baku	40,898	37,627	40,549	53,820	57,054	6.01%	7.93%
- regional	26,570	19,493	20,387	26,000	29,329	12.80%	1.56%
Market share of POS terminals in Baku	60.6%	65.9%	66.5%	67.4%	66.0%	-2.05%	2.30%
Ø Number of TXs per POS terminal per month	31.6	70.6	143.7	207.9	402.2	93.43%	84.57%
Number of POS payments (000s)	25,565	48,420	105,088	199,160	416,907	109.33%	94.71%
Value of POS payments (AZN m)	2,290	3,619	5,001	7,327	11,674	59.33%	43.63%
ATV per POS payment (AZN)	89.58	74.74	47.59	36.79	28.00	-23.89%	-26.24%
# POS Terminals per 1m capita - Azerbaijan	6,701.8	5,726.9	6,077.7	7,932.0	8,529.9	7.54%	5.19%
# POS Terminals per 1m capita - EA10 total	15,041.9	17,950.0	19,042.0	21,172.0	23,259.9	9.86%	12.48%
Source: Central Bank of Azerbaijan (CBA).

MPOS Terminals – Small and mobile merchants have started to use their smartphones and tablet PCs as a mini-POS+ECR device with added chip reader dongle. Also, merchants can initiate MOTO-like card payments on smartphones and tablets by downloading a payment app.

In December 2012, Square clones like iZettle, SumUp and others have launched their services in Europe and also are expected to support Azerbaijani merchants in the future.

In September 2014, MilliKart launched a new mobile payment app solution, M+, paired with a Chip & PIN card reader. According to MilliKart, M+ is a highly scalable MPOS terminal solution for small merchants as well as large merchants who might have many thousands of agents on the ground.

As of 2022, digital payment infrastructure development and CBA initiatives enabled the possibility of using smartphones as POS terminals and the corresponding legislative framework was formed. This step will have a positive impact on expanding the infrastructure and improving the usability and formation of a network of POS terminals. The legislative framework supporting this advancement was established through amendments approved by the Cabinet of Ministers on May 18, 2022. These changes simplified the installation and use of POS terminals, including mobile devices equipped with the necessary software for cashless payments.

By 2023, the adoption of mobile POS solutions had expanded, with multiple banks in Azerbaijan integrating the tapXphone service. Notably, Yelo Bank launched this service in April 2023, following earlier implementations by Kapital Bank, Rabitabank, ABB Bank, and Bank Respublika. This widespread adoption underscores the positive impact of the CBA’s initiatives on expanding the POS terminal network and enhancing the usability of digital payment systems in Azerbaijan.

Remote Internet Payments – Cards & More

Azerbaijan specialised online stores began to appear in the early 2000s. However, Azerbaijan occupies one of the worst positions in development of retail e-commerce among the CIS countries, which is clearly seen in the comparative analysis of the volume of e-commerce in Azerbaijan with Belarus, Kazakhstan, Ukraine and Russia.

Internet Use – According the International Telecommunication Union (ITU), Azerbaijan is the leader in the CIS and the number of individual Internet users and the level of broadband internet penetration among individual users.

In 2023, around 88% of Azerbaijanis have used the internet and some purchased in online shops in the 12-month period. Online buyers use their PCs, notebooks, tablets, or smartphones. Thus, remote payments are initiated from various types of internet capable devices.

E-commerce has been rapidly developing during the last few years. According to the Center for Analysis of Economic Reforms and Communication (CAERC), e-commerce spending’s share in retail trade is just 4.6%. At the current level of internet penetration, the share of e-commerce in retail is expected to reach 7% over the next few years.

Cards on the Internet (CNP) – All cards with international brands are accepted in Azerbaijani online shops after the merchant has signed an acceptance contract. Azerbaijani banks have started to issue prepaid cards and virtual cards for internet use only.

Leading online shops in Azerbaijan offer remote payments on cards based on security standards like SSL with CVC2/CVV2 code and 3D-Secure (Mastercard SecureCode, Verified-by-VISA). Further, web-based MOTO services are offered to Azerbaijani merchants by their acquirers. Cross-border e-commerce is still developing. The vast majority of items bought from foreign websites consist of mobile phones and computer parts. According to The State Customs Committee, the government is currently working on ensuring effective legal e-commerce regulation, preparing new bills.

The e-Payment Mix in Azerbaijan – In 2023, remote payment means offered by the merchants in online shops were dominated by cards followed by online bank transfers and card-on-delivery. The government and banks are promoting mobile payment services alongside virtual cards and e-wallet solutions such as PayPal and Azerpay for making e-commerce purchases.

E-commerce has grown rapidly over the past 3 years, and at a much quicker rate following the COVID-19 pandemic, with the CBA reporting 563.44 million e-commerce payments in 2023 (+116.25% from 2022) and a total value of AZN 39.16 billion, up 113.46% from 2022. Most e-commerce transactions are conducted with debit cards, although credit card volumes are gradually increasing.

13 - E-Commerce Payments in Azerbaijan
	2018	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Number of e-commerce payments (000s)	26,128	44,499	69,286	109,458	260,550	563,442	116.25%	84.82%
- on debit cards (000s)	22,511	38,438	57,658	95,195	232,310	516,132	122.17%	87.10%
- on credit cards (000s)	3,617	6,061	11,628	14,263	28,240	47,310	67.53%	67.23%
Value of e-commerce payments (AZN m)	1,493	3,057	3,873	7,210	18,349	39,167	113.46%	92.21%
- on debit cards (AZN m)	1,111	2,653	3,404	6,630	16,860	36,460	116.25%	101.01%
- on credit cards (AZN m)	382	404	469	580	1,489	2,707	81.80%	47.94%
ATV per e-commerce payment (AZN)	57.14	68.70	55.90	65.87	70.42	69.51	-1.29%	4.00%
Total e-commerce payment per capita	2.62	4.42	6.95	10.92	25.89	55.64	114.88%	84.29%
Total e-commerce payments value (AZN) per capita	149.58	303.66	388.31	719.12	1,823.41	3,867.54	112.10%	91.65%
Source: Central Bank of Azerbaijan (CBA).

Remote Payments on the Mobile Internet – Since 2013, online buyers have started to use their smartphones for shopping on the mobile internet. Mobile online shops can be accessed by mobile internet, by mobile app, or by scanning a 2D QR-code displayed, for example, in a newspaper or at a bus station. Thus, remote mobile payments are executed by either using the e-payment page of the mobile shop or by using payment apps of a PSP or an acquirer.

Also, Azerbaijani merchants can download a payment app from their acquirer in order to initiate MOTO payments with cards and/or online direct debits. Leading Azeri merchants are believed to consider their own apps including loyalty functions (e.g. e-vouchers, discounts, outlet finder, QR-code scanning) in the future.

Mobile Payments – Overview 

In 2023, 111% of Azerbaijanis have subscribed to a mobile phone, and 81.9% of the population use a smartphone. Tablet penetration is growing from a low level, and 64.6% of households are estimated to have an internet-capable mobile device.

Since 2013, the next generation of mobile services and payments has included new disruptive technologies (1D-barcodes, QR-code, Bluetooth BLE and NFC).

Mobile initiatives in Azerbaijan include new technologies either as initiating form factors to bridge to online shops on the internet (1D-barcodes, QR-code, NFC) or to enable contactless access to the retail POS outlet (1D-barcodes, QR-code, BLE, Bluetooth Low Energy, NFC Stickers, Mobile NFC Phones) e.g.:

• To enable access to online shops for any type of mobile devices (e.g. tablets, iPhones, Androids)
• To enable mobile services and payments initiated by consumers’ tablets or smartphones at ATMs, at vending machines, at smart posters and at POS terminals in retail outlets
• To enable small merchants’ tablets and smartphones by adding MPOS terminal devices for payment services.

The Azerbaijani m-Payment Mix – There are no official m-payment mix statistics, but bank information indicates that the domestic m-payment mix is similar to the e-payment mix (see Remote Payments on the Internet section).

Mobile Payment Initiatives 

In 2024, the various European mobile payment initiatives can be grouped into:

• Non-bank players like FinTechs, payment initiation service provider (PISPs), and account information service providers (AISPs) launching digital payment services beyond cards
• Innovative banks which launch mobile banking apps allowing for card-less in-app payments and payments on the internet
• Leading banks which pilot mobile HCE NFC payments with the card credentials stored-on-file in the cloud (HCE)
• Banks partnering with mobile network operators in order to offer mobile SIM SE NFC payments on cards with the card credentials stored in a secure element on SIM card of the mobile device
• Innovative retailers which offer their own apps with loyalty and payment functions to their consumers

In 2020, Azercell Telecom launched a mobile payment service in partnership with PASHA Bank and the Data Processing Centre of Ministry of Transport, Communications and High Technologies of the Republic of Azerbaijan. The new service will allow subscribers to use their mobile phones for payments, including utility bills.

The most notable mobile payment development came in October 2020 with the launch of the Instant Payment System, incorporating mobile functionality through the AniPay mobile payment service. The AniPay portal launched on the Instant Payment System has been made available for users as a mobile app and website. Transfers can be made using mobile phone numbers and mobile banking services of participating banks. The IPS enables QR code and NFC payments, along with payments for about 900 services provided by institutions integrated into the Government Payment Portal, such as taxes, duties, rent and other budget payments, as well as payments for utilities, communications, and other public services.

AzeriCard – In January 2021, AzeriCard began developing a new mobile app for bank clients, which will combine the services of all banks served by AzeriCard and will simplify the use of all banking services for clients. At the initial stage, the app will integrate the services of banks that are most ready for the conditions of open banking. The project is being implemented jointly with VISA.

Central Bank Digital Currencies (CDBC) – The Digital Cash Challenge 

Central bank digital currency (CBDC), also called digital fiat currency or digital base money, is a digital currency issued by a national central bank (NCB), rather than by a commercial bank. It is also a liability of the NCB and denominated in the sovereign currency, as is the case with physical banknotes and coins.

All CBDCs are under the authority of the respective national central bank, and they are part of the domestic cash payment ecosystem. Rather than a new currency, CBDC is a form of central bank electronic money that could be used by households and businesses to make payments. In addition, most CBDC implementations will likely not use or need any sort of distributed ledger such as a blockchain.

Unlike “retail CBDC,” which is generally designed as a central bank liability universally accessible to individuals and businesses within a jurisdiction’s financial system, “wholesale CBDC” refers to a digitized central bank liability designed for sizable (generally interbank) transactions, and for which access is limited to certain financial institutions.

National Central Banks (NCBs) have been providing trusted money to the public for hundreds of years as part of their public policy objectives. Trusted money is a public good. It offers a common unit of account, store of value and medium of exchange for the sale of goods and services and settlement of financial transactions. Providing cash for public use is an important tool for central banks. Yet the world is changing.

Even before COVID-19, cash use for payments was declining fast and convenient digital payments have grown enormously in volume and diversity. To evolve and pursue their public policy objectives in a digital world, central banks are actively researching the pros and cons of offering a digital currency to the public, a “general purpose” CBDC.

Central banks’ interest in CBDC has increased as a potential means of delivering their public policy objectives. Profound, ongoing changes across finance, technology, and society, as well as the recent COVID-19 crisis, provided additional impetus for the research of, and experimentation related to, CBDCs.

CBDC is a national digital currency issued by the central bank that is expected to replace or coexist with fiat money and hold the same value. Mobile money, on the other hand, utilises existing commercial banking-based accounting to manage customer wallet balances based on an exchange with cash or lines of credit and loans.

CBDC is a direct liability on the central bank as it is the main issuer of the currency, whereas digital money is the liability of commercial banks and other authorised financial institutions using funds on account. Although some implementation approaches propose that CBDC can be implemented in either an indirect or hybrid form, its liability remains on the respective national central bank.

National CBDC Initiatives

In October 2020, the CBA jointly with IBM created a digital identification system (DIS), with the aim of increasing financial accessibility in the country. The Hyperledger Fabric blockchain platform was introduced, which provides full protection of the confidentiality of information in a database based on distributed ledger technology. Legal entities and individuals will be able to open bank accounts and receive payment cards in a pilot mode with their identification following the client recognition policy for remote receipt of financial and banking services by legal entities and individuals.

Efforts to expand the coverage of the DIS to increase access to e-banking services continued in 2021. The DIS platform uses face recognition, aided by integration to domestic and international markets. The DIS allows remote bank account opening for e-residents without coming to the country. As of 2021, 20 banks were integrated to the DIS platform. Since the date of commissioning, the system has opened 1,600 remote bank accounts for legal entities and individuals, and users obtained over 280 payment cards.

Unregulated Cryptocurrency Products – Background 

Regulators and national central banks are challenged by unregulated independent cryptocurrency products. Whereas CBDCs are under the authority of the central bank, almost all cryptocurrencies are decentralised, and not controlled or managed by any central authority.

Obviously, financial market authorities and the national central banks are not in favour of unregulated cryptocurrency products, and they see them as a systematic risk for the financial system. Their intention to regulate the respective cryptocurrency exchange platforms has gained momentum.

Cryptocurrencies, originally designed as a store of value, are digital assets, developed and maintained on decentralised blockchains, and they can be used as a medium of exchange or payment method. Bitcoin and Ethereum are the most popular forms of cryptocurrencies worldwide used by consumers and businesses for transactions.

As of 2022, over 400 million people worldwide used cryptocurrencies, with merchants and businesses in more sectors accepting it as a form of payment. The major payment schemes VISA and Mastercard, PayPal and along with a growing number of financial institutions, have launched services allowing consumers to purchase or use cryptocurrencies for a range of applications.

According to a 2022 Deloitte survey, around two-thirds (64%) of surveyed merchants indicated that their customers have significant interest in using digital currencies for payments, and 83% expect consumer interest in digital currencies for payments to increase or significantly increase over the next 12 months.

In addition, merchants are motivated by the prospect of enabling immediate access to funds (40% of respondents), taking advantage of blockchain-based innovations in decentralised digital finance (39%), and allowing in-house management of the revenue cycle/treasury/finance department (39%).

Over half (54%) of large retailers (with revenues of $500 million and up) have invested more than $1 million on enabling digital currency payments, while only 6% of small retailers (with revenues of under $10 million) did so.

A 2022 survey from Checkout.com found a sharp rise in people wanting to use cryptocurrencies as a means of payment, with 40% of 18-35-year-old consumers citing their desire to experiment with using crypto as a payment method, up from less than 30% in 2021. Meanwhile, over 80% of businesses say offering crypto has attracted new customers, leading to a decrease in chargebacks, while just over 60% have seen higher authorisation rates accepting crypto payments.

Current estimates put cryptocurrency ownership in Europe at around 18 million people.

Market Size and Dynamics

Cards in Issue

Based on CBA figures, there were 16.92 million cards in Azerbaijan by end-2023, equivalent to 1.68 cards per capita. Total cards issued grew by 27.67% from 2022. There were 14.71 million debit cards and 2.21 million credit cards. Debit cards account for 86.91% of the total card base, and credit cards for the balance.

The decline in the total cards in 2015 and 2016 was an impact of the bank sector consolidation.

14 - Cards in Azerbaijan
(000s)	2018	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Cards with a cash function	6,511	7,266	9,230	11,040	13,257	16,925	27.67%	21.05%
Cards with a payment function	6,511	7,266	9,230	11,040	13,257	16,925	27.67%	21.05%
- thereof debit cards	5,651	6,468	8,137	9,645	11,434	14,709	28.64%	21.09%
- debit (social)	2,522	2,383	3,443	3,469	3,500	3,655	4.43%	7.70%
- debit (salary)	2,040	2,316	2,501	2,591	2,735	2,881	5.34%	7.15%
- debit (other)	1,089	1,769	2,193	3,585	5,199	8,173	57.20%	49.65%
- thereof credit cards	860	797	1,093	1,395	1,823	2,216	21.56%	20.84%
Total cards issued	6,511	7,266	9,230	11,040	13,257	16,925	27.67%	21.05%
Payment cards per capita - Azerbaijan	0.66	0.73	0.92	1.11	1.32	1.68	27.20%	20.65%
Payment cards per capita - EA10 total	1.40	1.50	1.65	1.82	2.09	2.42	15.79%	11.57%
Source: Central Bank of Azerbaijan (CBA).

Card Fraud

Card fraud is one of the most fascinating aspects of the payments industry, not least because it is relentless and mutating. EMV implementation and 3D-Secure, combined with Strong Customer Authentication (SCA), have done much to reduce domestic losses from lost and stolen cards in Europe. However, the war against fraud losses and the changing face of fraud continues to be a threat for the payments industry, including Azerbaijan.

The global card fraud challenges are Card-Not-Present fraud (CNP), cross-border fraud and counterfeiting on non-EMV cards. CNP fraud accounted for 80% of the total value of card fraud losses in 2022. From 2017, a new payment fraud category are fraud losses on contactless card payments. International card fraud continues to be smaller in scale than domestic card abuse but is proportionately far more common. And of course, fraudulent cross-border transactions on cards continue to grow on all purchase channels.

Losses from card fraud on the internet and cross-border fraud on domestic cards have grown significantly. Following EMV implementation, card fraud has moved increasingly to countries where POS terminals or online shops have not yet been migrated to EMV and SCA, respectively, and to cross-border fraud with compromised cards.

The breakdown of card fraud losses by method of compromise already indicates the importance of distinguishing between domestic and cross-border fraud losses. The method of compromise covers the means by which fraudsters obtain payment cards or card details. Notable methods of compromise in a complex payment world are CNP fraud based on theft of card credentials and card lost and stolen fraud followed by growing ID fraud and by cross-counterfeit fraud.

The main method of compromise responsible for losses in many European countries is now the theft of card credentials. A high proportion of these card fraud losses are caused by the growth in e-commerce, and still the lack of use of Strong Customer Authentication methods such as 3D-Secure.

In a post data-breach world, identity information, payment credentials, account credentials and responses to security questions are widely available for purchase in bulk. Complete fraud exploits and zero-day attacks are also easily available on the black market for outright purchase or as a hosted / fully managed service.

In the digital payments world and having the changing face of fraud in mind, there are significant challenges for card issuing banks, payment service providers and their supporting processors.

According to the CBA, in 2017, the card fraud losses in Azerbaijan were not significant. In 2017, there were a total 9,700 fraudulent payment card transactions (-26.5% from 2014) worth of AZN 1.2 million (-5% from 2014) were conducted in 2015. In 2015, the card fraud ratio accounted for 0.0145% by transaction number and for 0.0106% by transactions value. For 2018, the CBA provided an update to the effect that the number of fraudulent transactions had declined from 0.013% in 2017 to 0.019% in 2018; by value, fraud declined from 0.009% of all card transactions to 0.008%. The CBA did not provide an update for 2022 and 2023.

As most POS card transactions are authorised online-to-issuer, acquirer fraud rates in Azerbaijan are under control except for offline vending machines, e-commerce, and other hotspots.

Credit card fraud prevention measures taken have been pushing 3D-Secure, updating bank fraud prevention systems and real-time-scoring, implementing more rule-based fraud control mechanisms. Also, issuers offer PIN selection at ATMs and SMS notification to inform cardholders about the use of their credit card.

Card Use

With the accelerated roll-out of POS terminals, the rate of growth of payments on cards has picked up substantially. According to CBA data, ATM withdrawals outnumbered POS transactions by a ratio of over 25.6:1 in 2011, but in 2023, the ratio was 0.4:1 as POS payments outpaced ATM withdrawals.

Card payments in Azerbaijan showed a compound annual growth rate of 94.71% in the last five years. In 2023, there were 416.91 million payments on Azerbaijani cards (+109.33% from 2022) with a total value of AZN 11.67 billion (+57.52% from 2022) giving a high 24.6 payments per card per year (2022: 15.0). The ATV per card payment amounted to AZN 28.00, down by 24.75% from 2022.

The continued decline of card payments from 2013 to 2016 is believed to be an impact of the bank sector consolidation during that time. However, the growth of the total payments value implies more use of cards for household goods and consumer durables.

15 - Payments with Azerbaijani Cards
	2019	2020	2021	2022	2023	GR 22/23	GR 5Y	CAGR 5Y
Cards with a payment function (000s)	7,266.0	9,230.0	11,040.0	13,257.0	16,925.0	27.67%	159.94%	21.05%
Ø payments per card per year	3.5	5.2	9.5	15.0	24.6	63.97%	976.61%	60.85%
Ø payment value (AZN) per card per year	315.2	392.3	453.2	559.0	689.7	23.38%	135.25%	18.66%
Number of payments (000s)	25,564.0	48,424.0	105,091.0	199,160.0	416,907.0	109.33%	2698.60%	94.71%
- on debit cards (000s)	18,430.0	34,635.0	80,671.0	157,270.0	358,956.0	128.24%	3155.84%	100.69%
- on credit cards (000s)	7,134.0	13,789.0	24,420.0	41,890.0	57,951.0	38.34%	1396.67%	71.80%
Value of payments (AZN m)	2,290.0	3,621.0	5,003.0	7,411.0	11,674.0	57.52%	511.52%	43.64%
- on debit cards (AZN m)	1,885.0	2,930.0	3,925.0	5,803.0	9,700.0	67.15%	558.52%	45.79%
- on credit cards (AZN m)	405.0	691.0	1,078.0	1,608.0	1,974.0	22.76%	352.75%	35.26%
ATV per card payment (AZN)	89.58	74.78	47.61	37.21	28.00	-24.75%	-78.15%	-26.23%
Total card payments per capita	2.5	4.9	10.5	19.8	41.2	108.01%	2658.36%	94.15%
Total card payments value (AZN) per capita	227.5	363.0	499.0	736.5	1,152.7	56.53%	502.73%	43.23%
Source: Central Bank of Azerbaijan (CBA).

Predefined contactless limits – Contactless payments of purchase amounts below a predefined contactless limit are without PIN or signature and without transaction receipt. In Azerbaijan, the contactless limit for low value payments without PIN/signature is set to be AZN 50 for cards with PayPass or payWave function. In response to the COVID-19 pandemic, the contactless limit was raised to AZN 100 in August 2020 to promote encourage more non-cash transactions.

Cash withdrawals in Azerbaijan showed a compound annual growth rate of 21.51% in the last five years. In 2023, there were 162.32 million cash withdrawals on Azerbaijani cards (+26.98% Vs 2022) with a total value of AZN 37.21 billion (+22.91 Vs 2022) giving 9.59 cash withdrawals per card per year. The ATV per cash withdrawal accounted for AZN 229.25, down by 3.20% compared to 2022.

16 - Cash Withdrawals with Azerbaijani Cards
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Cards with a cash function (000s)	7,266.0	9,230.0	11,040.0	13,257.0	16,925.0	27.67%	21.05%
Ø cash withdrawals per card per year	10.4	9.1	9.0	9.643	9.591	-0.54%	0.38%
Ø withdrawals value (AZN) per card per year	2,259.8	2,183.9	2,113.4	2,283.8	2,198.6	-3.73%	4.31%
Number of cash withdrawals (000s)	75,833.0	84,239.0	99,436.0	127,838.0	162,324.0	26.98%	21.51%
- on debit cards (000s)	72,307.0	81,422.0	95,988.0	122,579.0	156,277.0	27.49%	21.49%
- on credit cards (000s)	3,526.0	2,817.0	3,448.0	5,259.0	6,047.0	14.98%	22.00%
Value of cash withdrawals (AZN m)	16,420.0	20,157.0	23,332.0	30,276.0	37,212.0	22.91%	26.26%
- on debit cards (AZN m)	15,863.0	19,682.0	22,772.0	29,317.0	35,963.0	22.67%	26.51%
- on credit cards (AZN m)	557.0	475.0	560.0	959.0	1,249.0	30.24%	20.29%
ATV per cash withdrawal (AZN)	216.53	239.28	234.64	236.83	229.25	-3.20%	3.91%
Total cash withdrawals per capita	7.5	8.4	9.9	12.7	16.0	26.17%	20.95%
Total card withdrawals value (AZN) per capita	1,631.1	2,021.0	2,327.1	3,008.6	3,674.5	22.13%	25.69%
Source: Central Bank of Azerbaijan (CBA).

Card Use per Capita

In 2023, there were 41.2 card payments per capita, up by 108.01% compared to 2022. The total card payments value per capita accounted for AZN 1,152.7 up by 56.53% compared to 2022.

In 2023, there were 16.0 cash withdrawals on cards per capita, up by 26.17% from 2022. The total card cash withdrawals value per capita accounted for AZN 3,674.5, up by 22.13% from 2022.

Debit Card Use

Debit cards accounted for 86.91% of the total card base in 2023. Debit card payments in Azerbaijan showed a compound annual growth rate of 100.69% in the last five years. In 2023, there were 35.4 debit card payments per capita. The total debit card payments value per capita accounted for AZN 957.8 up by 66.10% from 2022.

In 2023, there were 358.95 million payments on Azerbaijani debit cards (+128.24% from 2022) with a total value AZN 9,700 million (+67.15% Vs 2022) giving 24.4 payments per debit card per year. The ATV per debit card payment amounted to AZN 27.02, down by 26.76% from 2022.

17 - Payments with Debit Cards
	2018	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Cards with a debit function (000s)	5,651	6,468	8,137	9,645	11,434	14,709	28.64%	21.09%
Ø payments per debit card per year	2.0	2.8	4.3	8.4	13.8	24.4	77.42%	74.77%
Ø payment value (AZN) per debit card per year	260.7	291.4	360.1	406.9	507.5	659.5	29.94%	26.69%
Number of debit card payments (000s)	11,025	18,430	34,635	80,671	157,270	358,956	128.24%	111.62%
Value of debit card payments (AZN m)	1,473	1,885	2,930	3,925	5,803	9,700	67.15%	53.40%
ATV per debit card payment (AZN)	133.61	102.28	84.60	48.65	36.90	27.02	-26.76%	-27.51%
Total debit card payments per capita	1.1	1.8	3.5	8.0	15.6	35.4	126.80%	110.65%
Total debit card payments value (AZN) per capita	147.6	187.2	293.8	391.5	576.7	957.8	66.10%	52.70%
Source: Central Bank of Azerbaijan (CBA).

Credit Card Use

Credit cards account for 13.09% of the total card base in 2023. Credit card payments rebounded sharply in 2018, growing by 32.20% to reach 3.87 million. This followed a decline in credit card payments since 2014 amounting to an average of -4.49% over the last five years. The upward trend in credit card payments continued in 2023, due to the increasing availability of payment infrastructure and mobile payment services, along with the impact of COVID-19 pushing up credit card usage on the internet.

In 2023, there were 5.7 credit card payments per capita, up by 37.47% over 2022. The total credit card payments value per capita accounted for AZN 194.9, up by 21.98% over 2022.

In 2023, there were 57.95 million payments on Azerbaijani credit cards (up 38.34% over 2022) with a total value of AZN 1,974 million (up by 22.76% over 2022) giving 26.2 payments per credit card per year. The ATV per credit card payment amounted to AZN 34.06, down by 11.26% from 2022.

The sharp decline of credit card payments from 2014 was believed to be an impact of the bank sector consolidation in combination with a consolidation of credit card products.

Leading Card Issuers

International Bank of Azerbaijan (IBA) – As of 2023, IBA reported a card base of 4.8 million active cards which accounted for 28% of the country’s total cards issued according to data provided by the Banking Association of Azerbaijan.

Much of the recent growth has come from the issuance of pensioner cards. IBA claimed more than one million issued pensioner cards in the period from 2003 to 2011, with 700,000 in 2015. In 2013, IBA introduced a new programme, Pension+, for its pensioner cards. Pension+ offers cardholders an interest- and commission-free credit line of AZN 100 for use with merchants like supermarkets and drug stores which have contracted with IBA. Pension+ credits may not be encashed at ATMs.

IBA has the broadest range of card services in Azerbaijan, including TamKart, VISA Electron, Cirrus Maestro and a suite of VISA Classic, VISA Gold, VISA Platinum, VISA Business, VISA Business Gold, Mastercard Standard, Mastercard Gold and Mastercard Business cards. In 2019, IBA began issuing UnionPay debit and credit Classic, UnionPay Gold and UnionPay Platinum cards, denominated in both AZN and US dollars. In June 2014, IBA became the first Azeri bank to issue VISA PayWave-branded cards, having previously launched Mastercard contactless cards.

19 - Azerbaijani Remittances
	2018	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Inflow:
Number (000s)	2,918.9	3,251.9	2,226.9	2,139.3	3,592.0	4,686.4	30.47%	9.93%
Value (AZN m)	1,952.6	2,092.1	1,638.6	1,947.3	4,714.3	2,468.0	-47.65%	4.80%
ATV (AZN 000s)	669.0	643.3	735.8	910.3	1,312.4	526.6	-59.87%	-4.67%
Outflow:
Number (000s)	1,068.5	1,320.9	983.5	942.1	587.2	1,400.8	138.56%	5.57%
Value (AZN m)	662.5	927.7	805.2	1,192.8	631.7	616.4	-2.42%	-1.43%
ATV (AZN 000s)	620.0	702.3	818.7	1,266.1	1,075.8	440.0	-59.10%	-6.63%
Source: Central Bank of Azerbaijan (CBA).

PASHA Bank offers a range of VISA Debit and Debit Mastercard debit cards and VISA and Mastercard credit cards, standard and gold cards. In 2023, PASHA Bank had 564,913 active cards in circulation and over 16,556 POS terminals.

In May 2019, PASHA Bank, partnered with Turkish Airlines to issue a co-branded Miles & Smiles credit card. Cardholders can earn air miles with card purchases at participating retailer networks.

Kapital Bank – With its base of savings accounts, Kapital Bank is Azerbaijan’s largest card issuer, claiming over 7.0 million active cards as at end-2023, most of which are VISA cards. By establishing its own processing centre, Kapital planned to introduce loyalty and co-branded cards to the market but had neither by September 2014. In 2008, the bank was the first to issue VISA Infinite cards in Azerbaijan.

All Kapital cards are branded either VISA or Mastercard. Its salary cards are branded Debit Mastercard. In 2019, the bank launched a Student Smart card, in partnership with Mastercard. Students can receive their scholarships and make payments via the card both inside and outside the country. Kapital also offers ATM-based card-to-card funds transfer services on VISA and Mastercard cards. The bank also issues digital and gift cards.

In July 2022, Kapital Bank announced the rebranding of BirKart as the Birbank card. The Birbank card comes in three forms, Cashback, Umico and Miles. Each type of Birbank card will be offered in two versions, debit, and instalment. Birbank Cashback gives the holder double VAT bonuses and cashback from 1.5% to 30% for cashless payments, Birbank Umico will allow customers to earn additional Umico bonuses, and Birbank Miles that can be redeemed for any flight ticket. As of 2021, the share of the Birbank card in the Azerbaijani instalment card market was 60%. Birbank card has more than 11,000 partner stores all over the country.

Xalq Bank offers a range of VISA and Mastercard debit, standard and gold cards, topped with a VISA Platinum card for the most privileged customers. DIZAYN, a Mastercard Standard card, allows personalisation and issuance of up to three subsidiary cards for family members. Also available is a virtual VISA card, which can be used for online payments but not at an ATM or POS. In 2023, Xalq had 119,459 cards in circulation.

During 2013-14, Xalq Bank promoted a discount deal with Qatar Airways, giving holders of all its card types a 10% discount on flights booked with cards, including VISA Platinum, VISA/MC Gold, VISA Classic/MC Standard, VISA Electron, Dizayn Kart or Internet cards. Its payroll cards are branded Maestro or Electron.

Bank of Baku is a significant player, with 286,788 cards in circulation as of 2023.

In late 2011, Bank of Baku announced the launch of ‘Bolkart,’ a credit card programme. By June 2012, according to the bank, 60,000 cards had been issued – a significant proportion of the country’s total credit card base – and discounts for Bolkart cardholders had been arranged at more than 300 shops. In July 2013, the bank said Bolkart cards had reached 120,000 and announced they would be rebranded as Mastercard or VISA cards with international functionality.

Other card programmes include Maestro and Electron debit cards and a range of Mastercard and VISA credit/-charge cards, including Gold Mastercard and Diamond VISA premium cards.

Unibank, an innovative VISA and Mastercard issuer, was the first bank in Azerbaijan to offer cards with individualised graphical designs, via a special website. The bank also issues premium VISA and Mastercard cards, including Platinum, Infinite, World Elite, and Black cards. Its Albali- Plus product combines four functions – credit, debit, deposits, and tax payments – together with cashback and free mobile banking. The bank also offers digital and gift cards. As of 2023, Unibank had 2,187,865 active cards in circulation.

Bank Respublika, in cooperation with the Wolt commercial platform, introduced new co-branded cards based on the Visa payment system to the market in 2023. The card allows users to receive 5% cashback as Wolt credits on delivery orders, which can be used as a discount on subsequent orders. As of 2023, Bank Respublika had 280,727 active cards in circulation.

Salary Cards

Payroll (salary) cards have been widely introduced in Azerbaijan. Payroll cards are issued in the name of the employee and attached to a Special Card Account (SCA) with the bank, to which the employer transfers all payments due, including salaries, bonuses, vacation allowances, and travel allowances. The annual fee and ATM withdrawal charges are paid directly by the employer.

In 2023, the number of salary cards grew by 5.34% to reach 2.88 million. In 2021, the issuance of new agricultural cards, cards for receiving lump-sum social benefits, compensation to depositors of closed banks and registration of jobs led to a significant increase in the number of cards. Most banks in Azerbaijan issue salary and payroll cards.

International Money Transfers

As in other Eurasian states, international money transfers are the key means of payment for enabling cross-border remittances, though Azerbaijan is much less dependent on inflows than most regional neighbours. With its subsidiaries in Russia and Georgia, International Bank of Azerbaijan is a dominant player in the sector. IBA also has partnerships with Blizko, Contact, Migom, Xpress-Money, Kart Transfer, Western Union, Coinstar and Iba-Express.

Remittances in Azerbaijan increased in 2023, with 4.68 billion (above 2019 levels) money transfers received (+30.5% from 2022) for a total value of AZN 2.46 billion (-47.6% from 2022). The increase was largely driven by increased flows from Russia as well as Turkey and USA.

Most banks in Azerbaijan offer money transfer and remittance services.

Appendix

Bank Sector Changes – Background

Bank Standard was wholly owned by AB Standard CJSC, one of the largest financial and industrial holding companies in Azerbaijan, with interests including insurance and construction as well as banking. In April 2016, Bank Standard and IBA were said to be in talks to merge their assets within the framework of the plan on consolidation of Azerbaijan’s banks. Additionally, Bank Standard appealed to the Financial Market Supervisory Body of Azerbaijan for the financial support. In September 2016, the license of Bank Standard was revoked.

DemirBank – Among other second-tier banks, DemirBank (known up to October 2009 as Azerdemiryolbank), 65%-owned by local shareholders, was one of the most innovative. DemirBank offered a range of VISA and Mastercard debit cards and credit cards. It competed with the big banks on price and services. DemirBank’s license was revoked Dec. 23, 2017.

Historic Azerbaijan Card Breakdown

Like the card schemes in other Eurasian and European countries, CBA no longer report details per card product type. In order to give an indication regarding the different card product types issued in the country, the historic card breakdown for the period 2010 to 2014 is kept for information.

With market share peaking at 81% of cards issued in 2010, VISA slipped back to 49% in 2014 but remains the dominant player. Electron and Maestro/Cirrus accounted for 68% of cards issued in 2014, down from 78% in 2013. Evidence of increasing interest in credit and charge cards is indicated by the gradual rise in issuance of VISA Classic and Mastercard Standard cards.

Data Tables

Key Statistics 2023
Population	10.13 million, 1.68 cards per capita
Cards	Debit:  14.71 million Credit: 2.21 million Total: 16.92 million
Card Payments	Debit: 358.95 million; value AZN 9.70 billion ($5.70 billion) Credit: 57.95 million; value AZN 1.97 billion ($1.16 billion) All cards: 416.91 million; value AZN 11.67 billion ($6.86 billion)
POS Terminals	86,383
POS Payments	All cards 416.91 million; value AZN 11.67 billion ($6.86 billion)
ATMs	3112
ATM Withdrawals	All cards 162.40 million; value AZN 37.21 billion ($21.89 billion)

Market Overview
Payment Organisation	AzeriCard, owned by International Bank of Azerbaijan; MilliKart, owned by 17 banks and EBRD.
Domestic Card Brand	AzeriCard, (few) Millikart.
Market Structure	VISA and Mastercard are the principal payment cards issued in Azerbaijan. Also: American Express cards and Diners Club cards. An estimated 50% of cards are VISA-branded. Salary cards have been widely introduced in Azerbaijan. Based on central bank figures, there were 16.92 million cards in Azerbaijan by end-2023, up by 27.67% from 2022. CBA, the central bank, has been mandated to promote electronic payments, with a focus on payments for state services and extension of payment facilities to the mass market. E-commerce payments sustained its uptrend, rising by 116% in 2023 compared to 138% between 2021-2022, while POS payments rose by over 109.3%. ATM withdrawals grew, but at a similar rate as in previous years, at 27% in 2023. In 2016, a bank sector consolidation was carried out by CBA, according to the Financial Sector Modernisation Project (FSMP). State-controlled International Bank of Azerbaijan is the dominant player.
Notable Market Trends	Rollout: contactless cards, POS terminals, Mobile POS service, mobile banking apps, Debit Mastercard cards, VISA Debit, MPOS terminals.
Major Card Issuers	International Bank of Azerbaijan, Kapital Bank, Xalq Bank, Bank of Baku.
Major Card Acquirers	International Bank of Azerbaijan, Kapital Bank, Xalq Bank.
Major Card Processors	AzeriCard, MilliKart, and gateway Interbank Card Centre

1 - Banks in Azerbaijan
	2018	2019	2020	2021	2022	2023
Number of banks	30	30	26	26	25	23
State-owned	2	2	2	2	2	2
Private	28	28	24	24	23	21
- with foreign capital	15	14	12	12	10	9
- with 50%+ foreign capital	8	7	7	7	6	5
Bank branches	508	509	455	479	487	475
Source: Central Bank of Azerbaijan (CBA).

2 - Major Banks in Azerbaijan in 2023
Bank	Ownership	Assets (AZNm)	Assets ($m)	Assets in %
International Bank of Azerbaijan (IBA)	State: 96.37%; others: 3.63%	13,668.2	8,040	27.9%
PASHA Bank	Pasha Group (AZ): 57%, Bless (AZ): 28%, investor (AZ): 15%	8,651.4	5,089	17.6%
Kapital Bank	Pasha Group (AZ):81.08%, others: 18.92%	8,659.6	5,094	17.7%
Xalq Bank	Ideal Business-Ko: 50%, EuroStandard:33.85%, Amal Invest: 16.15%	3,082.6	1,813	6.3%
Bank Respublika	Guliyev Family: 90.25%, SIDT (D):4.22%	2,131.0	1,254	4.3%
UniBank	Eldar Garibov: 87.03%, Others: 12.97%	1,590.7	936	3.2%
AccessBank	ADB: 19.9% EIB: 17.4%, IFC: 16.56%, Others: 46.14%	1,392.3	819	2.8%
Azer Turk Bank	Azerbaijan Republic: 75%, Ziraat Bank 13.5%, others: 11.5%	995.5	586	2.0%
RabitaBank	private investors (AZ)	1,138.5	670	2.3%
Yelo Bank	Marina Kulishova: 98.94%, Investor (AZ): 1.06%	1,566.5	921	3.2%
TuranBank	Eight companies (41.90%) and 20 private investors (58.10%)	822.8	484	1.7%
Muganbank	Mehdiyev's Family: 89.35, Vafa Valiyeva: 10.65%	Oluwadara Olunuga: Bank has been liquidated	-	0.0%
ASB Bank	Anadolu Investment (TR): 98.43%, others: 1.57%		-	0.0%
Bank of Baku	NAB Holding: 35%, Private Investors: 28.89%, Individual Investors: 36.11%	870.9	512	1.8%
Premium Bank	two private investors (84.79%); one legal entity (15.22%)	685.1	403	1.4%
Ziraat Bank Azərbaycan	Ziraat Bankasi: 99.98%, others: 0.02%	636.7	375	1.3%
Yapi Kredi Bank Azerbaijan	YKB: 99.8%, Others: 0.2%	514.9	303	1.0%
Other banks		2,649.8	1,559	5.4%
Total		49,056.4	28,857	100.0%
Note: total banking assets were AZN 38.45bn ($22.62bn) as at end-2021.
Note: the licenses of AtaBank and AGBank were revoked by the Central Bank in early 2020.
Source: Aberbaijan Banks Association.

3 - Azerbaijani Bank Accounts - Key Figures
(000s)	2018	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Number of bank customers	6,335.4	8,342.0	10,349.7	12,181.6	13,535.7	14,654.4	8.3%	18.3%
- individuals	6,233.9	8,227.4	10,238.2	12,059.7	13,395.4	14,513.7	8.3%	18.4%
- businesses	264.4	323.4	392.5	504.9	636.8	712.2	11.8%	21.9%
- legal entities	101.5	114.6	111.5	121.8	140.2	140.2	0.0%	6.7%
Number of customer accounts	17,953.0	21,129.9	24,842.8	26,587.8	32,132.0	39,590.7	23.2%	17.1%
- of which current accounts	14,957.9	17,125.7	20,863.8	22,034.0	25,911.8	31,492.1	21.5%	16.1%
- of which for individuals	14,741.2	16,900.0	20,633.1	21,770.3	25,603.7	25,603.7	0.0%	11.7%
- of which deposit accounts	368.0	396.6	222.6	256.8	299.9	325.6	8.6%	-2.4%
Note: figures from 2018 have been restated, CBA states " The change in indicators is due to the reclassification of data on the number of customers and accounts of statistical units."
Source: Central Bank of Azerbaijan (CBA).

4 - Communications in Azerbaijan
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Fixed telephone lines (000s)	1,499.9	1,485.7	1,484.3	1,483.1	1,487.7	0.3%	0.3%
Mobile cellular subscribers (000s)	10,771.0	10,193.4	10,817.1	10,752.8	10,836.0	0.8%	0.9%
Mobile phone subscriptions per 100 capita	107.0%	102.2%	104.8%	106.9%	107.0%	0.1%	0.6%
Proportion of households with an Internet access	79.1%	84.8%	86.5%	87.1%	88.0%	1.0%	2.4%
Distribution by purposes of Internet use
- of which for: ordering or selling goods and services	3.2%	4.1%	4.6%	5.2%	5.2%	0.0%	10.9%
Purposes and nature of Internet use at enterprises
- of which for: banking and financial services	22.5%	23.0%	24.0%	25.0%	25.0%	0.0%	2.7%
Note: approximately 80% of fixed telephone lines and 70% of mobile subscribers are in urban locations.
Source: The State Statistical Committee of the Republic of Azerbaijan, ITU.

5 - Average Exchange Rates
	2018	2019	2020	2021	2022	2023
1 EUR in AZN	2.0093	1.9037	1.9398	2.0125	1.7929	1.8766
1 USD in AZN	1.7000	1.7000	1.7000	1.7000	1.7000	1.7000
Note: all figures have been restated.
Source: Central Bank of Azerbaijan (CBAR).

6 - Payments through the APUS Network
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Number of payments (m)	48.84	49.71	54.67	85.02	100.71	18.5%	22.0%
- of which cash payments (m)	35.32	30.58	32.85	32.04	31.47	-1.8%	-1.6%
- of which card payments (m)	13.52	19.14	21.82	42.67	58.46	37.0%	79.8%
Value of payments (AZNm)	3,237.27	3,216.34	3,979.34	4,770.07	5,632.85	18.1%	18.5%
- of which cash payments (AZNm)	1,815.04	1,493.54	1,712.76	1,707.62	1,682.16	-1.5%	-2.7%
- of which card payments (AZNm)	1,422.23	1,722.81	2,266.58	3,062.45	4,134.31	35.0%	54.0%
ATV per cash payment (AZN)	51.39	48.85	52.13	53.29	53.45	0.3%	-1.1%
ATV per card payment (AZN)	105.20	90.02	103.88	71.77	70.72	-1.5%	-14.3%
Source: State Payment Portal of CBA.

7 - Number of Cash Payments on APUS By Main Banks
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Azerpost	26,421,491	23,848,062	24,339,359	23,023,947	22,170,475	-3.71%	-3.34%
Kapital Bank	3,000,281	2,112,361	2,995,779	2,840,368	2,880,605	1.42%	6.26%
TuranBank	156,433	930,089	1,792,157	1,655,891	2,548,907	53.93%	74.90%
International Bank of Azerbaijan (IBA)	1,314,512	850,563	1,169,986	1,157,946	1,130,639	-2.36%	-0.31%
Expressbank	824,469	1,088,138	1,007,690	743,327	772,228	3.89%	-2.38%
AFB Bank	488,897	391,389	398,402	280,381	246,016	-12.26%	-14.51%
Xalq Bank (People's Bank)	171,280	134,633	177,955	230,985	254,271	10.08%	8.67%
Naxcivanbank	97,879	91,908	139,813	180,719	252,064	39.48%	38.02%
Azer-Turk Bank	288,958	196,653	111,664	23,697	15,213	-35.80%	-41.50%
Muganbank	192,474	109,839	96,903	82,202	70,835	-13.83%	-19.04%
Bank Respublika	89,032	65,943	85,155	89,514	90,148	0.71%	2.19%
Rabitabank	168,193	85,052	65,761	26,561	16,510	-37.84%	-43.83%
Bank of Baku	27,239	16,173	24,828	30,341	30,763	1.39%	3.53%
NBC Bank	1,335,753	288,412	-	-	-	na	na
Amrahbank	71,236	17,716	-	-	-	na	na
AtaBank	118,141	1,203	-	-	-	na	na
other banks	2,080,041	655,163	447,640	1,675,439	990,541	-40.88%	-13.18%
Total	35,321,179	30,575,966	32,853,092	32,041,318	31,469,214	-1.79%	-1.64%
Note: totals include all other Azerbaijani banks and so are more than the sum of the banks shown.
Note: in 2021, CBA revoked the bank licences of NBC Bank, Amrah Bank and Ata Bank.
Source: State Payment Portal of CBA.

8 - Number of Card Payments on APUS by Main Banks
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Kapital Bank	10,594,831	14,453,227	11,873,742	16,764,555	22,548,326	34.50%	70.09%
International Bank of Azerbaijan (IBA)	272,116	527,627	3,012,663	9,699,330	13,579,062	40.00%	143.51%
Unibank	470,410	1,866,544	2,430,665	8,628,348	12,252,254	42.00%	125.21%
Pasha Bank	420,732	521,246	1,234,222	2,199,437	3,739,043	70.00%	94.40%
Bank of Baku	202,598	187,181	308,649	457,021	600,338	31.36%	39.11%
Yapi Kredi Bank	213,625	203,956	203,493	184,666	211,202	14.37%	10.98%
Bank Respublika	151,959	171,610	201,744	237,832	300,047	26.16%	28.56%
AccessBank	124,515	161,298	192,478	167,265	215,483	28.83%	30.26%
Expressbank	176,111	160,658	154,413	114,942	121,345	5.57%	-5.53%
Azerpost	4,342	6,028	6,246	7,334	8,749	19.30%	27.51%
other banks	887,820	878,440	2,200,992	4,212,146	4,032,532	-4.26%	53.31%
Total	13,519,059	19,137,815	21,819,307	42,672,876	57,608,383	35.00%	79.26%
Source: State Payment Portal of CBA.

9 - Leading Card Issuers in Azerbaijan
Domestic Issuers	Issued Card Brands	Owned by
International Bank of Azerbaijan (IBA, incl. AzeriCard)	Mastercard, VISA, AmExp, UnionPay; Debit Mastercard, VISA Debit	state: 96.37%; others: 3.63%
Xalq Bank	Mastercard, VISA; Debit Mastercard, VISA Debit	Ideal Business-Ko: 50%, EuroStandard:33.85%, Amal Invest: 16.15%
Kapital Bank	Mastercard, VISA; Debit Mastercard,VISA Debit	Pasha Group (AZ):88.6%, others: 11.40%
UniBank	Mastercard, VISA; Debit Mastercard	Eldar Garibov: 87.03%, Others: 12.97%
PASHA Bank	Mastercard, VISA; Debit Mastercard, VISA Debit	Pasha Group (AZ): 57%, Bless (AZ): 28%, investor (AZ): 15%
Bank of Baku	Mastercard, VISA; ViSA Debit, Debit Mastercard	NAB Holding: 35%, Private Investors: 28.89%, Individual Investors: 36.11%
AccessBank	Mastercard, VISA; VISA Debit, Debit Mastercard	ADB: 19.9% EIB: 17.4%, IFC: 16.56%, Others: 46.14%
Bank Respublica	Mastercard, VISA; VISA Debit, Debit Mastercard	Guliyev Family: 90.25%, SIDT (D): 4.22%
Express Bank	Mastercard, VISA; VISA Debit, Debit Mastercard	Azenko Group (AZ): 40%, other AZ interests: 60%
VTB Bank Azerbaijan	VISA, Mastercard	VTB Bank (RUS): 51%, AtaHolding (AZ): 49%
YapKredi Bank Azerbaijan	Mastercard; Debit Mastercard	YKB: 99.8%, Others: 0.2%
other banks	Mastercard, VISA; VISA Debit, Debit Mastercard	Private investors
Note: some banks in Azerbaijan issue also domestic AzeriCard cards and local cards (e.g. Millikart cards).
Source: PCM research

10 - Leading Acquirers in Azerbaijan
Domestic Acquirers	Acceptance Brands offered	Owned by
International Bank of Azerbaijan (IBA)	Mastercard, VISA, American Express, Diners, JCB, UnionPay; Debit Mastercard, Electron	state: 96.37%; others: 3.63%
XALQ Bank	Mastercard, VISA; Electron	Ideal Business-Ko: 50%, EuroStandard:33.85%, Amal Invest: 16.15%
Kapital Bank	Mastercard, VISA; Electron	Eldar Garibov: 87.03%, Others: 12.97%
PASHA Bank	Mastercard, VISA; Electron	Pasha Group (AZ): 57%, Bless (AZ): 28%, investor (AZ): 15%
Bank of Baku	Mastercard, VISA; Electron	NAB Holding: 35%, Private Investors: 28.89%, Individual Investors: 36.11%
YapKredi Bank Azerbaijan	Mastercard, VISA; Electron	YKB: 99.8%, Others: 0.2%
other acquirer banks	Mastercard, VISA; Electron; UnionPay	Private investors
Source: PCM research

11 - ATMs in Azerbaijan
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
ATMs with cash function	2,647	2,715	2,907	3,068	3,112	1.43%	4.46%
- in Baku	1,421	1,429	1,560	1,591	1,621	1.89%	4.05%
- regional	1,226	1,286	1,347	1,477	1,491	0.95%	4.91%
Market share of ATMs in Baku	53.7%	52.6%	53.7%	51.9%	52.1%	0.45%	-0.39%
Ø Number of TXs per ATM per month	2,387.4	2,585.6	2,850.5	3,472.3	4,348.9	25.24%	14.22%
Number of ATM cash withdrawals (000s)	75,832	84,240	99,436	127,837	162,404	27.04%	19.31%
Value of ATM cash withdrawals (AZN m)	16,420	20,156	23,333	30,276	37,212	22.91%	23.07%
ATV per cash withdrawal (AZN)	216.53	239.27	234.65	236.83	229.13	-3.25%	3.15%
# ATM Terminals per 1m capita - Azerbaijan	262.9	272.2	289.9	304.9	307.3	0.79%	4.16%
# ATM Terminals per 1m capita - EA10 total	728.9	713.6	698.7	679.4	706.3	3.96%	-0.17%
Source: Central Bank of Azerbaijan (CBA).

12 - POS Terminals in Azerbaijan
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
POS terminals	67,468	57,120	60,936	79,820	86,383	8.22%	5.50%
- in Baku	40,898	37,627	40,549	53,820	57,054	6.01%	7.93%
- regional	26,570	19,493	20,387	26,000	29,329	12.80%	1.56%
Market share of POS terminals in Baku	60.6%	65.9%	66.5%	67.4%	66.0%	-2.05%	2.30%
Ø Number of TXs per POS terminal per month	31.6	70.6	143.7	207.9	402.2	93.43%	84.57%
Number of POS payments (000s)	25,565	48,420	105,088	199,160	416,907	109.33%	94.71%
Value of POS payments (AZN m)	2,290	3,619	5,001	7,327	11,674	59.33%	43.63%
ATV per POS payment (AZN)	89.58	74.74	47.59	36.79	28.00	-23.89%	-26.24%
# POS Terminals per 1m capita - Azerbaijan	6,701.8	5,726.9	6,077.7	7,932.0	8,529.9	7.54%	5.19%
# POS Terminals per 1m capita - EA10 total	15,041.9	17,950.0	19,042.0	21,172.0	23,259.9	9.86%	12.48%
Source: Central Bank of Azerbaijan (CBA).

13 - E-Commerce Payments in Azerbaijan
	2018	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Number of e-commerce payments (000s)	26,128	44,499	69,286	109,458	260,550	563,442	116.25%	84.82%
- on debit cards (000s)	22,511	38,438	57,658	95,195	232,310	516,132	122.17%	87.10%
- on credit cards (000s)	3,617	6,061	11,628	14,263	28,240	47,310	67.53%	67.23%
Value of e-commerce payments (AZN m)	1,493	3,057	3,873	7,210	18,349	39,167	113.46%	92.21%
- on debit cards (AZN m)	1,111	2,653	3,404	6,630	16,860	36,460	116.25%	101.01%
- on credit cards (AZN m)	382	404	469	580	1,489	2,707	81.80%	47.94%
ATV per e-commerce payment (AZN)	57.14	68.70	55.90	65.87	70.42	69.51	-1.29%	4.00%
Total e-commerce payment per capita	2.62	4.42	6.95	10.92	25.89	55.64	114.88%	84.29%
Total e-commerce payments value (AZN) per capita	149.58	303.66	388.31	719.12	1,823.41	3,867.54	112.10%	91.65%
Source: Central Bank of Azerbaijan (CBA).

14 - Cards in Azerbaijan
(000s)	2018	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Cards with a cash function	6,511	7,266	9,230	11,040	13,257	16,925	27.67%	21.05%
Cards with a payment function	6,511	7,266	9,230	11,040	13,257	16,925	27.67%	21.05%
- thereof debit cards	5,651	6,468	8,137	9,645	11,434	14,709	28.64%	21.09%
- debit (social)	2,522	2,383	3,443	3,469	3,500	3,655	4.43%	7.70%
- debit (salary)	2,040	2,316	2,501	2,591	2,735	2,881	5.34%	7.15%
- debit (other)	1,089	1,769	2,193	3,585	5,199	8,173	57.20%	49.65%
- thereof credit cards	860	797	1,093	1,395	1,823	2,216	21.56%	20.84%
Total cards issued	6,511	7,266	9,230	11,040	13,257	16,925	27.67%	21.05%
Payment cards per capita - Azerbaijan	0.66	0.73	0.92	1.11	1.32	1.68	27.20%	20.65%
Payment cards per capita - EA10 total	1.40	1.50	1.65	1.82	2.09	2.42	15.79%	11.57%
Source: Central Bank of Azerbaijan (CBA).

15 - Payments with Azerbaijani Cards
	2019	2020	2021	2022	2023	GR 22/23	GR 5Y	CAGR 5Y
Cards with a payment function (000s)	7,266.0	9,230.0	11,040.0	13,257.0	16,925.0	27.67%	159.94%	21.05%
Ø payments per card per year	3.5	5.2	9.5	15.0	24.6	63.97%	976.61%	60.85%
Ø payment value (AZN) per card per year	315.2	392.3	453.2	559.0	689.7	23.38%	135.25%	18.66%
Number of payments (000s)	25,564.0	48,424.0	105,091.0	199,160.0	416,907.0	109.33%	2698.60%	94.71%
- on debit cards (000s)	18,430.0	34,635.0	80,671.0	157,270.0	358,956.0	128.24%	3155.84%	100.69%
- on credit cards (000s)	7,134.0	13,789.0	24,420.0	41,890.0	57,951.0	38.34%	1396.67%	71.80%
Value of payments (AZN m)	2,290.0	3,621.0	5,003.0	7,411.0	11,674.0	57.52%	511.52%	43.64%
- on debit cards (AZN m)	1,885.0	2,930.0	3,925.0	5,803.0	9,700.0	67.15%	558.52%	45.79%
- on credit cards (AZN m)	405.0	691.0	1,078.0	1,608.0	1,974.0	22.76%	352.75%	35.26%
ATV per card payment (AZN)	89.58	74.78	47.61	37.21	28.00	-24.75%	-78.15%	-26.23%
Total card payments per capita	2.5	4.9	10.5	19.8	41.2	108.01%	2658.36%	94.15%
Total card payments value (AZN) per capita	227.5	363.0	499.0	736.5	1,152.7	56.53%	502.73%	43.23%
Source: Central Bank of Azerbaijan (CBA).

16 - Cash Withdrawals with Azerbaijani Cards
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Cards with a cash function (000s)	7,266.0	9,230.0	11,040.0	13,257.0	16,925.0	27.67%	21.05%
Ø cash withdrawals per card per year	10.4	9.1	9.0	9.643	9.591	-0.54%	0.38%
Ø withdrawals value (AZN) per card per year	2,259.8	2,183.9	2,113.4	2,283.8	2,198.6	-3.73%	4.31%
Number of cash withdrawals (000s)	75,833.0	84,239.0	99,436.0	127,838.0	162,324.0	26.98%	21.51%
- on debit cards (000s)	72,307.0	81,422.0	95,988.0	122,579.0	156,277.0	27.49%	21.49%
- on credit cards (000s)	3,526.0	2,817.0	3,448.0	5,259.0	6,047.0	14.98%	22.00%
Value of cash withdrawals (AZN m)	16,420.0	20,157.0	23,332.0	30,276.0	37,212.0	22.91%	26.26%
- on debit cards (AZN m)	15,863.0	19,682.0	22,772.0	29,317.0	35,963.0	22.67%	26.51%
- on credit cards (AZN m)	557.0	475.0	560.0	959.0	1,249.0	30.24%	20.29%
ATV per cash withdrawal (AZN)	216.53	239.28	234.64	236.83	229.25	-3.20%	3.91%
Total cash withdrawals per capita	7.5	8.4	9.9	12.7	16.0	26.17%	20.95%
Total card withdrawals value (AZN) per capita	1,631.1	2,021.0	2,327.1	3,008.6	3,674.5	22.13%	25.69%
Source: Central Bank of Azerbaijan (CBA).

17 - Payments with Debit Cards
	2018	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Cards with a debit function (000s)	5,651	6,468	8,137	9,645	11,434	14,709	28.64%	21.09%
Ø payments per debit card per year	2.0	2.8	4.3	8.4	13.8	24.4	77.42%	74.77%
Ø payment value (AZN) per debit card per year	260.7	291.4	360.1	406.9	507.5	659.5	29.94%	26.69%
Number of debit card payments (000s)	11,025	18,430	34,635	80,671	157,270	358,956	128.24%	111.62%
Value of debit card payments (AZN m)	1,473	1,885	2,930	3,925	5,803	9,700	67.15%	53.40%
ATV per debit card payment (AZN)	133.61	102.28	84.60	48.65	36.90	27.02	-26.76%	-27.51%
Total debit card payments per capita	1.1	1.8	3.5	8.0	15.6	35.4	126.80%	110.65%
Total debit card payments value (AZN) per capita	147.6	187.2	293.8	391.5	576.7	957.8	66.10%	52.70%
Source: Central Bank of Azerbaijan (CBA).

18 - Payments with Credit Cards
	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Cards with a credit function (000s)	797	1,093	1,395	1,823	2,216	21.56%	20.84%
Ø payments per credit card per year	9.0	12.6	17.5	23.0	26.2	13.81%	42.17%
Ø payment value (AZN) per credit card per year	508.2	632.2	772.8	882.1	890.8	0.99%	11.93%
Number of credit card payments (000s)	7,134	13,789	24,420	41,890	57,951	38.34%	71.80%
Value of credit card payments (AZN m)	405	691	1,078	1,608	1,974	22.76%	35.26%
ATV per credit card payment (AZN)	56.77	50.11	44.14	38.39	34.06	-11.26%	-21.27%
Total credit card payments per capita	0.7	1.4	2.4	4.2	5.7	37.47%	71.30%
Total credit card payments value (AZN) per capita	40.2	69.3	107.5	159.8	194.9	21.98%	34.87%
Source: Central Bank of Azerbaijan (CBA).

19 - Azerbaijani Remittances
	2018	2019	2020	2021	2022	2023	GR 22/23	CAGR 5Y
Inflow:
Number (000s)	2,918.9	3,251.9	2,226.9	2,139.3	3,592.0	4,686.4	30.47%	9.93%
Value (AZN m)	1,952.6	2,092.1	1,638.6	1,947.3	4,714.3	2,468.0	-47.65%	4.80%
ATV (AZN 000s)	669.0	643.3	735.8	910.3	1,312.4	526.6	-59.87%	-4.67%
Outflow:
Number (000s)	1,068.5	1,320.9	983.5	942.1	587.2	1,400.8	138.56%	5.57%
Value (AZN m)	662.5	927.7	805.2	1,192.8	631.7	616.4	-2.42%	-1.43%
ATV (AZN 000s)	620.0	702.3	818.7	1,266.1	1,075.8	440.0	-59.10%	-6.63%
Source: Central Bank of Azerbaijan (CBA).