Ms Vira Rychakivska, NBU Council member and former NBU Deputy Governor who used to be in charge of cash circulation, commended the decision to lower the upper threshold for settlement of payments in cash for individuals from UAH 150,000 to UAH 50,000, effective from 4 January 2017.
Ms Rychakivska underlined that the National Bank of Ukraine, in close cooperation with other public authorities, the banking community and business representatives, embarked on preparations for lowering limits on cash payments ten years ago.
“Over this period, an adequate regulatory framework and an infrastructure have been put in place, while Ukrainians have become accustomed to using payment cards. Ordinary Ukrainians have overcome fears associated with cashless payments, which is an important psychological factor,” said Ms Rychakivska.
More and more Ukrainians prefer cashless payments. Year by year, the share of cashless payments is growing. Since the imposition of limits on cash payments at 150,000, the share of cashless payments using cards in Ukraine increased from 17% to 35% (over the first three quarters of 2016).
Ms Rychakivska also stressed that the decision to lower the upper threshold for settlement of payments in cash for individuals will not cause any inconveniences for Ukrainians as currently over 90% of their daily spending is below the threshold of UAH 50,000.
“The outlets are equipped with an infrastructure to ensure customer servicing standards are met. Currently, over 140,000 trade and service enterprises are equipped with POS terminals. Over 207,000 POS terminals and ATMs operate in Ukraine. The Ukrainian laws and regulations mandate that the outlets be equipped with appropriate banking equipment to process cashless payments and enable their customers to make both cash and cashless payments,” Ms Rychakivska added.
The NBU Council member pointed out that cashless payments executed through terminals are free of charge, adding that lowering the upper threshold for settlement of payments in cash will reduce transaction costs for bank customers.
“Since rates on services (operations) provided (performed) to a certain extent depend on the cash handling costs incurred by banks, by reducing the need for cash we will lower transaction costs for banks, and, consequently, for their customers,” explained Ms Rychakivska.
The NBU Council member believes that this move, alongside with other incentives, will contribute to efforts to bring economy out of shadow and ensure a return of household deposits to the banking system.
“Currently, we see the first signs of economic stabilization – it is important to encourage citizens to invest in the domestic economy through their bank accounts,” Ms Rychakivska concluded.