Visa, IBA to launch new service

By Azernews

By Leman Mammadova

Visa international payment company defines introduction of digital payments, security of payment systems, development of e-commerce, expansion of the range of premium products and loyalty programs as key priorities in Azerbaijan.

The company continues to develop new technologies and help implement them in Azerbaijan.            

Visa launches Visa Token Service jointly with International Bank of Azerbaijan (IBA), the company told local media. The presentation of Visa Token Service in Baku will be held on September 10.

The event will be attended by representatives of the IBA, the Center for Analysis of Economic Reforms and Communication, the Financial Market Supervisory Authority (FIMSA) and the Central Bank of Azerbaijan (CBA). Kristina Dorosh, the new head of Visa International in the Caucasus region, is expected to attend the event.

Tokenization is an essential element of digital non-cash payments. The system will allow digitizing payment cards. Tokenization technology allows to secure electronic payments with the help of a reliable data encryption system (when paying with a card, the buyer’s details are not transferred to the seller).

Tokens are stored in the customer base of stores where the user pays. For further purchases, just one click is enough. The advantage of using this method is not only convenience - it eliminates the possibility of theft of a customer card number in digital space.

In the future, tokenization will also allow to link cards to users' mobile phones, which will make physical presence of a card unnecessary.

Visa announced the plan to launch a tokenization system in Azerbaijan in May 2019 at the Financial Technologies Summit (FINTEX) on the topic "New trends in banking and the payment ecosystem: innovative solutions, financial technologies and security".

Recently, FIMSA jointly with Visa held a seminar in Baku on the expansion and improvement of non-cash payment services in the country.

The event, aimed at improving the knowledge of banking specialists and mastering advanced technologies in the field of cashless payments, was dedicated to the use of tokenization services for the first time in Azerbaijan. The seminar discussed the benefits of tokenization, allowing cashless payments without the presence of POS-terminals.

Digitalization is an important component of the dynamics of the global economy’s development. The full transition to non-cash settlements contributes to the growth of financial inclusiveness.

In accordance with the state program on the expansion of digital payments in 2018-2020, the annual volume of non-cash payments in Azerbaijan will reach about 17 billion manats ($9.97 billion) by 2021.

Implementation of the program will allow increasing the share of non-cash payments by seven percent annually. The share of cash payments in transactions carried out in the country's economy will fall from 74 to 40 percent.

Recently, CBA and the Visa International Service Association have signed a memorandum of understanding to determine areas of cooperation within the framework of the state program.

In accordance with the memorandum, the parties agreed on cooperation in the areas of e-commerce, mobile payments, access to modern payment instruments in various sectors of the economy, and financial literacy.

Moreover, both organizations plan to hold joint lotteries and other activities in Baku and the regions by the end of 2020 to promote cashless payments, encourage modern payment solutions and analyze the current situation.