Digital payments in Azerbaijan set for major expansion, Mastercard report finds

Azerbaijan aims to significantly increase financial inclusion and accelerate the next phase of digitalization in the country’s payment ecosystem. According to projections, the digitization of consumer-to-business (C2B) payments, which stood at 32% at the end of 2023, is expected to nearly double by 2027. Over the same period, business-to-business (B2B) payments among small and medium-sized enterprises (SMEs) are projected to rise from 5–10% to 15–20%.

As reported by Azernews, the forecast comes from a report titled “The Next Wave of Digitalization in Azerbaijan”, prepared by Mastercard in collaboration with the Central Bank of the Republic of Azerbaijan (CBA).

The report highlights that Azerbaijan has made notable progress, particularly in digitizing consumer payments:

“In 2023, the digitization level of consumer payments reached 32% and was expected to rise to 38% by the end of 2024. The ‘Cashless Azerbaijan’ initiative, launched in 2017 in partnership with Mastercard, has played a decisive role in accelerating consumer payment digitalization in recent years. Thanks to the successful implementation of these initiatives and effective stakeholder support, Azerbaijan has taken significant steps in digital transformation.”

However, the report notes that SME payments still hold substantial potential for digitization. Creating synergy between consumer and SME payment digitalization could position Azerbaijan as a regional leader in digital payments.

Building on the 2017 initiative, the 2024 study “The Next Wave of Digitalization in Azerbaijan” aimed to further accelerate payment digitization and expand credit access. The research analyzed both C2B and B2B payment flows, segmenting them by payment methods and behavioral patterns to identify opportunities and challenges.

“A diagnostic analysis covering over 15 key areas was conducted to determine the main obstacles in segments still heavily reliant on non-digital payments. The study combined market assessments, surveys, focus groups, stakeholder interviews, mystery shopping exercises, and the insights of Mastercard Advisors on Azerbaijan’s economic dynamics.”

Following the diagnostic phase, the study evaluated more than 60 initiatives from over 40 countries with similar digital development stages. Twenty-two initiatives were identified as highly suitable for Azerbaijan, with detailed roadmaps developed for their implementation.

“This process established the strategic and practical steps needed to advance the next wave of digitalization in Azerbaijan,” the report concluded.

The findings indicate that Azerbaijan is poised for a significant leap in both consumer and SME payment digitalization, laying the foundation for broader financial inclusion and enhanced economic efficiency across the country.