Mastercard highlights growing need for SME payment digitalization in Azerbaijan

ABAKU, Azerbaijan, February 3. Small and
Medium-Sized Enterprises (SMEs) are a vital part of Azerbaijan’s
economy, making the digitalization of payments they make and
receive an important driver for the development of a cashless
economy, Trend
reports.

This is stated in a research paper titled “The Next Wave of
Digitalization in Azerbaijan,” prepared by Mastercard in
cooperation with the Central Bank of Azerbaijan (CBA).

The document recalls statistical indicators from previous years
and notes that, according to the State Statistical Committee of the
Republic of Azerbaijan (SSC), by the end of 2022, 377,842 SMEs were
operating in the country, generating added value totaling 17.2
billion manats.

“In recent years, the government has taken significant steps to
accelerate the digitalization of SMEs while simultaneously
supporting consumer digitalization. Key initiatives include the
establishment of the Small and Medium Business Development Agency
(SMBDA) in 2018, the provision of relevant support mechanisms
through SME Houses, and the launch of the ‘Electronic SME House’ to
ensure access to these services via digital channels. Additionally,
subsidized loan programs have been introduced to enhance the
financial inclusion of SMEs.

To further support SME digitalization and access to credit, a
regulatory framework has been adopted, including the creation of a
centralized database, and work in this direction is ongoing. At the
same time, since 2020, the installation of POS terminals has been
made mandatory for SMEs whose turnover exceeds a certain threshold,
contributing to an increase in the number of acceptance points in
the market,” the document emphasizes.

While SMEs have achieved impressive strides in their
digitalization journey, they continue to trail behind consumers and
hold substantial opportunities for growth.

“Various indicators provide a clearer picture of their economic
contribution and level of digitalization. For instance, while the
share of SMEs using banking services in Azerbaijan stands at
85-90%, this figure ranges between 95-99% in Georgia, Türkiye, and
Kazakhstan. Another important indicator is the number of business
cards per SME: 0.2 in Azerbaijan, 0.3 in Kazakhstan, 1 in Georgia,
and 2 in Türkiye.

In terms of payment acceptance, which is a key element of a
cashless economy, Azerbaijan also has considerable growth
potential. Currently, there are 8.5 POS terminals per 1,000 people
in the country, compared to 23.6 in Georgia, 51.6 in Kazakhstan,
and 60.7 in Türkiye.

As a result, promoting the digitalization of payments among SMEs
is becoming increasingly important. The widespread adoption of
digital tools can lead to higher employment, faster economic
growth, improved access to credit, and a stronger contribution by
SMEs to budget revenues. These advances are viewed as long-term
investments in sustainable digital development. Global trends also
show that after accelerating consumer digitalization, the next
stage typically focuses on SME digitalization as a continuation of
this success,” the information states.