Credit cards to gain more ground

Romania has made quick progress where the number of cards is concerned, although it lags five-six years behind the other countries in Central and Eastern Europe in terms of cards in circulation, according to the bankers to have participated in the “Money in a rush” seminar organised by Ziarul Financiar.

The banks in Romania have invested big money in this segment, the card market being the field with the highest growth rate in such a short period of time.

Everything looks nice and simple. But, although the cards are widely spread in Romania, they only serve as means to get some cash from ATMs, they are hardly used for purchases, as those dealing in trade are reluctant to become involved.

We are living in a “cash” country after all, where there is little culture in the field. Participants in the meeting called for a better promotion of this payment tool for the population, even if it means draft laws to encourage bank account usage.

“The two indicators defining the card market are the number of cards issued -Visa and Europay, and the number of companies dealing in trade, which accept payment by these tools, more precisely the number of POS (points of sale) actually operating.

The number of cards issued is all right, as there are 1.2 million of them in circulation, which we regard as a positive thing, although it’s been five years since the opening of the card market in Romania.

What is not all right is the number of card acceptors with POS-es, which amounts to about 1,000 now,” Raul Cosmin Baciu, representative of the card authorisation department within NBR, said on Wednesday night.

The NBR official says that the ATM network is rather unsatisfactory, as only 900 such machines are operational at the moment. 60-70% of the total ATMs are located in Bucharest, therefore the rest of country is “quite deprived” in this respect.

The bankers explained that an ATM is rather costly ($20,000-$30,000) and that card type products (either debit or credit) mean extensive investments and low profit or none at all for the banks.

“Whoever might think these products bring profit at this stage, is wrong. But this is an investment for the future, which we, the banks, have to assume,” Bogdan Baltazar, BRD-Groupe Societe Generale chairman, said.

On the other hand, Marian Mitroi, Romcard general manager, says that although the cards were introduced much later in Romania, the growth pace is faster than the one registered in the first years after their introduction in neighbouring countries.

“I think this is the fastest developing field in Romania in a relatively short time. The banks were quick to act when the green light was given in 1995, they made investments, so those criticising them for high commissions are not right. We’ve only just begun,” says Mitroi.