Ukrainians unquestionably prefer noncash card transactions. This can largely be attributed to expansion of the contactless payment infrastructure and change in paying habits. At the same time, in Q1 this year, the additional factor favoring the public’s refusal to use cash was the spread of the coronavirus infection and associated active campaign of the NBU and banks to promote online transactions.
Increased Cashless Transactions
In Q1 2020, the total number of transactions (cashless payments and cash withdrawals) involving payment cards issued by Ukrainian banks was 1,385.3 million, with the value of these transactions totaling UAH 920.5 billion. Such operations increased in number by 24.5%, and in value – by 15.6% compared to the same period last year.
Noncash transactions were leading in both number and value. Thus, the number of noncash transactions was 1,183.2 million (85.4% of all transactions), and the value – UAH 503 billion or 54.6% of all card transactions (in Q1 2019 this figure was 49.7%).
Analysis of the breakdown of noncash transactions by type shows that in January–March 2020 the majority of card transactions was attributed to retail network payments – 50.3%, and card-to-card payments prevailed in value – 41.3% (the average check of one such transaction amounted to UAH 1,505).
Changed Calculation of Active Payment Cards
The total number of issued payment cards in Ukraine as of 1 April 2020 accounted for 68.6 million.
In March 2020, debit transactions (noncash payments and cash withdrawals) covered 53.4% of all payment cards.
Almost the same share of payment cards for debit transactions was observed in January (53.2%) and February (53.0%) this year.
In January 2020, the timeframe for banks to submit statistics on payment cards was changed. Now, banks report to the regulator monthly, while previously this was done quarterly. Respectively, the number of payment cards with at least one debit transaction is calculated on monthly basis (and not once in three months). So, this makes it impossible to compare with the last-year numbers of cards used for transactions (so called, active cards*). This also applies to comparison of the number of active contactless and tokenized payment cards**.
A third of Payment Cards are Contactless or Tokenized
Ukrainians appreciate convenience, expediency, and security of contactless payments (using contactless cards, smartphones, and other NFC devices) and tend to use more often cards that are based on these technologies.
Thus, in March 2020, 8.9 million contactless payment cards were used. Compared to 2020, this is a 16.0% increase. In March 2020, the number of tokenized payment cards was 2.5 million. This is an 11.2% increase over findings in January 2020.
So, a third of active payment cards – used for debit transactions in March 2020 – are contactless and tokenized (31.0% or 11.3 million cards).
At the same time, noncash transactions involving contactless and tokenized cards accounted for almost a half of the total number and value of noncash transactions in retail networks (49.1% and 48.7% respectively).
Nine out of Ten Retail POS Terminals Support Contactless Payments
The contactless payment infrastructure continues the stable expansion trend. At present, already nine out of ten retail POS terminals support contactless payments (90.2%). As of 1 April 2019 only eight out of ten POS terminals were contactless.
The network of POS terminals in Ukraine has expanded by 14.5%, to 331,400 units yoy. In comparison to the beginning of 2020, a slight decrease in the number of operating retail POS terminals (by 0.7%) is observed that can be explained by quarantine restrictions in March.
As of 1 April 2020, the ratio of the total number of POS terminals in retail networks (both contact and contactless) to the Ukrainian resident population*** was 8,300 units per 1,000,000 people.
However, the POS network remains unevenly distributed across Ukraine. Western regions and Luhansk and Donetsk oblasts have the smallest number of payment devices per capita. Payment cards and payment devices are mostly concentrated in Kyiv city and oblast, and in Dnipropetrovsk and Kharkiv oblasts.
As of 1 April 2020, 70 participants in card payment systems were registered in Ukraine.
** Generated by changing the details of payment cards for unique digital identifiers and further used for transactions by means of NFC devices (in particular, such payment services as Apple Pay, Google Pay, Garmin Pay etc.).