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Stoilka Arsova, BORICA AD: With instant payments, we are entering markets outside of standard payment methods

Instant payments are changing the market of financial services in Bulgaria a little more than a year after their launch, Stoilka Arsova, director of the National Card and Payment Scheme, part of BORICA AD, commented on the DIGI PAY 2024 Blog.

All banks and payment institutions in the country now provide their customers with the possibility of receiving an instant transfer. 20 DPUs are in the role of both originators and recipients, and 27 DPUs are only recipients of immediate payments.

Over 11 million instant transfers worth nearly BGN 19 billion were made within 2023 alone. We report a monthly and sustainable growth of over 10%.

Our expectations for 2024 are for 17.2 million transactions.

The service has not yet reached its full potential, but customers are quickly getting used to it and using it more and more often. All this allowed us to develop and upgrade the service, to include payments that are currently not made through banks, but in cash. For example, transferring a small amount of money for lunch, dinner or a gift.

The blink P2P pilot project by mobile number, which is based on the instant payment system, was launched last year and is already enjoying great interest from end customers. In 2024, we expect 10 DPUs to offer the service to their customers.

In this regard, we are launching a national advertising campaign at the beginning of April 2024, which will grow into a consumer campaign at the beginning of summer with the aim of activating more customers. Instant payments give us the opportunity to enter markets that are outside of standard payment methods, even with a card. What we are developing are value added services to end customers, again to Scheme standard.

We're launching zone parking services across the country.

Mobile banking payment will be an alternative to SMS payment. Additional services such as geolocation are also planned - so the customer will know if he is in a zone and what it is. Also paying for weekend parking packages in some municipalities. New directions of development of this service will be payments to private parking lots, airports, malls and others. There will be no need to use a counter, but will be paid directly from the mobile application of the bank or payment institution. 

The blink parking service will also be launched this year with a pilot project for paid hourly parking in an area in 16 settlements in the country, as well as in private parking lots at airports and business centers. Payment service providers have systems in place to quickly and effectively detect fraud and take measures to prevent money from being sent to an unintended recipient as a result of fraud or error. 

New legislation is forthcoming at the EU level, which is expected to be finally adopted this year. It will introduce measures to facilitate the introduction of instant payments.

For greater security: additional verification of the recipient's identity

A service to verify the identity of the payee to whom the payer intends to send an instant payment is about to be introduced. This service will not be charged extra to the user. 

In the event of a discrepancy between the payee's payment account identifier and the payee's name provided by the payer, the customer must be notified and his express consent obtained, and if such information is not provided, the customer must be compensated by the DPU serving him for all financial damages resulting from fraud. 

As an additional protection against fraud, payment service providers should allow their customers to set a maximum amount for instant credit transfers in euros, which can be easily changed before the next transfer.

With immediate payments comes immediate anti-money laundering measures

Even deeper measures to prevent criminal activities (such as money laundering or terrorist financing) are to be introduced.

 Service providers offering instant credit transfers must carry out due diligence on a daily basis whether any of their customers are subject to sanctions or other restrictive measures and take appropriate steps in a timely manner to prevent possible crimes. 

Last but not least, it is important that the Payment Services Directive actively works with the consumer to inform them, by explaining the existing potential risks, and thus to minimize and promptly avoid them.

Digitalization of food vouchers with “bcard e-vouchers”

In our role as a National Card and Payment Scheme, we aim to cover a variety of local services through a variety of payment instruments. We target sectors in which they need digitalization. And we, as a local scheme, can offer adequate and competitive solutions that will satisfy both our participants and the traders themselves.

Changes to the Corporate Income Tax Act enabled the digitization of food vouchers from the beginning of this year. Through bcard, we offer a tool and rules to our issuers and receiving institutions, who in turn offer a service to food voucher issuers. We have prepared a new product "bcard e-vouchers" which is compliant with the regulatory requirements for electronic food vouchers. As a national product, the "bcard e-vouchers" card is probably the cheapest solution for providing food vouchers in an electronic medium, given the social nature of the costs. Electronic vouchers are based on quotas allocated by the Ministry of Finance.

Out of a total of 11 licensed operators, seven offer the Bulgarian bcard e-vouchers, which is a good start out of a total of 11 licensed operators.

The benefits of digitizing vouchers are for everyone

The added value of voucher digitization is mainly in the resource and technical commitment of everyone in the chain. Employers will no longer hand-deliver a paper voucher to their employees each month, but will provide a long-valid card to be loaded at the voucher operator. They will save time to administer and distribute the vouchers. 

Employees will receive an electronic carrier/card with loaded vouchers which is free of charge and free of maintenance and transaction charges. With it, they will have a much better customer experience, as they are used to getting with payment cards, including checking the availability of vouchers on it and blocking it at their discretion. They won't have to worry about losing or tearing a paper voucher. Vouchers will be stored securely and traceably on electronic media. It will be possible to use their entire face value and pay with them not only in round amounts. 

For voucher operators, there will be a great optimization of the processes of production, delivery, counting, reading of the vouchers. The reading of the paper vouchers is done with special reading machines, which are similar to bank counting machines in banks. 

Some of these machines are quite sophisticated and allow, in addition to reading the denomination, to make a protocol of vouchers read by denomination, by store and, through software related to accounting, to issue an invoice for the vouchers read. Storing the paper vouchers is also a cumbersome and complicated process. Imagine in a complaint how you will find such a paper.

At merchants: in addition to standing and waiting in line, cashiers accepting vouchers in stores have special instructions to recognize voucher specimens in circulation. The cashiers monitor the validity of the voucher and when the voucher is used a stamp must be placed on the reverse side of the voucher that it has already been used so that it cannot be used again and put in a separate section of the cash register. Stores collect the vouchers and periodically (perhaps once a week, fortnightly, monthly), courier or personally bag the used stamped vouchers to the operator's office to be counted, read and redeemed.

Some of the big stores use cars and/or buses of the security companies (SOT), with which they transport the vouchers at their own expense to the offices of the operators.

There would also be many benefits to the state from the digitization of food vouchers. With electronic vouchers, cashless payments will be encouraged and this will contribute to the expansion of the POS network in the country, as long as relatively cheap electronic media are offered on the market, which do not make transactions with electronic vouchers more expensive. Cashless payments lead to brightening of the gray economy, correspondingly to higher revenues from VAT, corporate tax, insurance, etc., Stoilka Arsova also commented.