Discover how bank card transactions are transforming Albania's payment landscape, reflecting a shift towards cashless transactions and increased economic formalization.

Introduction Albania is witnessing a significant shift in its payment landscape as bank cards increasingly become the preferred mode of transaction. Data from the first quarter of this year reveal a marked increase in card usage, signaling a move away from cash and towards a more formalized and trusted banking system.

Surge in Bank Card Transactions

Record Transactions in Early 2024


In the first quarter of 2024, Albanians conducted an impressive 9.8 million bank card transactions. Of these, approximately 9.3 million, or 95%, involved cash withdrawals from ATMs and payments at POS (Point of Sale) terminals. This trend highlights the growing reliance on bank cards for everyday financial activities.

Diverse Transaction Types


While the bulk of these transactions were cash withdrawals and POS payments, the remaining 5% included ATM deposits, cash withdrawals at POS terminals, and transactions involving electronic money. These figures underscore the versatility and increasing usage of bank cards beyond simple cash withdrawals.

Financial Data Insights

Transaction Value Breakdown


According to the Bank of Albania, the total value of card transactions in the first three months of the year amounted to 116 million ALL (Albanian Lek). Of this, 334 million ALL were cash withdrawals from ATMs, while 64 million ALL were payments made through POS terminals. This significant volume of transactions indicates the robust adoption of card payments in the country.

Increase in Card Issuance


The first quarter of 2024 also saw banks issuing about 1.4 million new cards. Of these, 1.2 million, or 98%, were debit cards, while over 120,000 were credit cards. Additionally, 71,000 cards were issued with electronic money functions, reflecting the diverse financial needs of the population.

Dominance of International Card Brands

Visa and MasterCard Lead the Market


In Albania, Visa and MasterCard are the predominant card brands in use. Visa has 735,000 users, closely followed by MasterCard with 722,000 users. This dominance reflects the trust and reliability associated with these international brands, especially after local and American Express cards were phased out in the country.

Trends and Implications

Decrease in Cash Usage


The increasing preference for card transactions over cash indicates a broader shift towards digital payments. Each year, there is an average increase of 50,000 new cards issued in the first quarter, highlighting the growing adoption of cashless payment methods among Albanians.

Economic Formalization


This trend towards greater card usage contributes to the formalization of Albania's economy. As more transactions flow through the banking system, there is a corresponding increase in transparency and trust in the financial sector. This shift not only facilitates better economic management but also strengthens the overall financial infrastructure of the country.

Conclusion


The rising popularity of bank cards in Albania marks a significant transition in the nation's payment habits. With an increasing number of transactions and new cards issued annually, Albanians are moving towards a more cashless society. This evolution reflects a growing trust in the banking system and a step forward in the formalization of the economy. As Albania continues to embrace digital payment methods, the benefits of reduced cash usage and enhanced economic transparency are set to expand further.