BAKU, Azerbaijan, October 20. POS terminal fees
in Azerbaijan exceed tax rates, Vugar Bayramov, a member of the
Azerbaijani Parliament's Committee on Economic Policy, Industry and
Entrepreneurship, said at a committee meeting on Tuesday, Trend's correspondent
reports.


According to him, high fees charged for POS terminal services in
Azerbaijan discourage micro and small businesses from accepting
cashless payments, hinder economic transparency and affect consumer
prices. Reducing POS terminal fees, optimizing bank commissions and
expanding the domestic interchange system would therefore be
advisable.


The MP said that Azerbaijan currently has 22 banks, 14
electronic money institutions and nine payment institutions. Two
payment institutions were licensed in 2026, while two electronic
money institutions received licenses in 2025.


According to Bayramov, the number of POS terminals has increased
3.2 times since 2020, reaching 184,400. The average annual growth
rate in this segment over the past five years stood at 26.3%.


He noted that the number of bank cards in circulation has grown
by an average of 14.8% annually over the past decade, increasing
3.8 times overall. As a result, the number of bank cards in
circulation reached 22.8 million at the end of May 2026.


However, the MP pointed out that several challenges remain in
expanding electronic transactions.


He said that Baku accounts for 62.1% of all POS terminals in the
country. Azerbaijan currently has one POS terminal for every 60
people, compared with 29 people in Georgia and 47 in Türkiye.


According to Bayramov, a significant proportion of active
taxpayers do not use POS terminal services. Azerbaijan has 883,000
active taxpayers, while the number of POS terminals in use stands
at 184,400. This means that the number of POS terminals is
approximately five times lower than the number of active
taxpayers.


Another issue highlighted by the MP was the high fees charged
for POS terminal services. He said interchange fees for debit and
prepaid cards in Azerbaijan are also high compared with those in
several countries in the region.


According to data presented by Bayramov, Mastercard interchange
fees for debit and prepaid cards range from 0.65% in Türkiye to
0.9%-1.3% in Kazakhstan. In Azerbaijan, the corresponding rates
range from 1.14% to 1.73%.


He noted that fees for standard customer cards also vary across
countries. In Azerbaijan, these rates range from 1.3% to 1.8%,
compared with a standard rate of 1.32% in Türkiye, 1%-1.75% in
Georgia and 0.9%-1.1% in Kazakhstan.







Bayramov emphasized that high POS terminal fees create
additional costs for businesses and affect consumer prices.


According to him, large retailers often incorporate these costs
into the prices of orders supplied to micro and small businesses.
As a result, high commissions also negatively affect the
development of micro and small enterprises. At the same time, these
costs discourage some service providers and retailers from
accepting card payments.


The MP said that reducing POS terminal fees is also important
for improving economic transparency. A simplified tax rate of 2% of
turnover currently applies to micro-entrepreneurs. However, total
fees for using POS terminals can sometimes exceed this tax
rate.


"This means that in some cases, a micro-entrepreneur who prefers
cashless payments and wants to operate transparently has to pay
banks more for using POS terminals than they pay in taxes,"
Bayramov said.


He noted that this situation discourages micro-entrepreneurs
from using cashless payments and stressed that POS terminal fees
should not become an obstacle to economic transparency.


In this regard, Bayramov said the Central Bank should review POS
terminal fees and reduce them. According to him, high fees prevent
micro-entrepreneurs from making greater use of cashless payments
and create conditions that may encourage tax evasion.


Bayramov noted that although the Central Bank has taken certain
steps in this area, more systematic measures are needed to optimize
fees.


He also said it would be desirable for the Central Bank to use
incentive mechanisms to reduce commissions on transactions made
with bank cards.


The MP added that, as in several developing countries, expanding
the domestic interchange system in Azerbaijan could help reduce the
high commissions charged by banks.


"This would not only encourage cashless payments but could also
lead to lower prices," Bayramov said.