Monday, 7 January 2019

Croatians Still Preferring Cash over Bank and Credit Cards

Germans could be left without cash if a threat of a general strike of 12,000 employees who transport money to ATMs is fulfilled. Although they could quickly pay with their bank and credit cards, the lack of cash would anger the Germans, since they, just like Croatians, like to pay with cash. On the other hand, some countries in northern Europe are even thinking about the abandonment of cash money altogether. Advocates say this approach would eradicate the grey economy and tax evasion, while the opponents warn about a loss of privacy, reports Večernji List on January 7, 2019.

The popularity of cash, despite the simplicity and security of bank card payments, is even growing in some countries. Germans, like Croats, make as much as 80 per cent of transactions with cash. According to the data of the Croatian National Bank, of the 179 million recorded receipts in 2017, as much as 87 per cent was paid in cash. However, the value of card transactions has grown to 37 per cent of the total turnover.

It should be noted that the largest card turnover is recorded during the summer and that 12 per cent of the amount of all card transactions is made with foreign cards, so it is likely that tourists mostly use them. If we take this into account, we can conclude that Croats pay with cards for just a quarter of their purchases. And they use much more their bank debit cards than credit cards.

Nevertheless, the popularity of bank cards is growing year after year, as well as the value of card transactions. Every consumer has 2.5 cards on average, and 79 per cent of citizens have at least one card. This shows that the problem is not the access to bank cards, but the will of the citizens to use them.

Local craftsmen and caterers mostly insist on cash payments, and the unwritten rule is that discounts are more substantial if you pay with banknotes. The reason is the high payment fees that card companies contract with the sellers of services and goods. Since these fees are often, especially in the case of a new company that has no financial history, higher than five per cent, entrepreneurs must increase their prices for that amount. As a rule, fees range from two to five per cent, and this cost is transferred to the consumers. That is why customers usually pay more with bank cards, especially in the case of larger purchases, which typically bring five per cent extra discount if you are ready to pay with cash.

On the other hand, Americans pay for almost half of all transactions with bank cards. Sweden and Norway are moving towards full cash elimination. In Sweden, for example, in five years the share of cash transactions fell from 50 per cent to just 20 per cent. Swedes trust banks and institutions and research has shown that they are not worried by either the 'Big Brother' issue or internet fraud. They recently abolished the largest banknotes, claiming that only criminals use them, and they consider the abandonment of cash an excellent way to fight the grey economy.

More news on the Croatian economy can be found in our Business section.

Translated from Večernji List (reported by Marina Šunjerga).

Tuesday, 13 November 2018

UnionPay, World’s Largest Card Payment Organisation, Coming to Croatia?

American Express cardholders will be able to use them until the end of 2019. Which replacement service will they opt for will depend on what the card companies will offer them. Therefore, some banks, as well as marketing agencies, have already begun preparations, including advertising campaigns, trying to win over some of about half a million American Express users in Croatia. PBZ is the licensed American Express partner in Croatia and earlier this year the bank announced activities that will allow card users to “continue with the uninterrupted use of all services and related benefits.” Unofficial sources say that PBZ will offer its customers UnionPay cards, owned by the world's largest card issuer, China UnionPay, reports Jutarnji List on November 13, 2018.

The Chinese card organisation has issued about five billion credits cards, and in 2015 it has overtaken the former leading card issuer Visa. PBZ said it could neither confirm nor deny its possible cooperation with UnionPay. “Our users have a high level of confidence in PBZ Group, which is confirmed by our research which shows that they fully believe that PBZ Card will offer high-quality replacement cards,” the bank said.

The latest events are also a chance for Diners to expand in the Croatian market. Its cards in Croatia are issued by Erste Card Club, which currently has 380,000 credit cards (Diners, Visa and MasterCard). At the moment, they see “high-quality opportunities for further growth and development of card business in the Croatian market.” Therefore, they are intensively working on "introducing new services, with an emphasis on improving the digital user experience.”

Recently, a fully digitized application process for issuing Diners Club credit cards has been introduced. New members can request a card without delivering paperwork or coming to a branch office, and the process is available to all citizens, irrespective of whether they are Erste Bank customers or not.

Given that American Express credit cards will be managed by the issuer itself in the future, it is expected they will no longer be in widespread use in Croatia, except at the corporate level. Amex has abandoned its licensing business model due to EU payment legislation, which limits multilateral fees charged by credit card issuers.

For more on banks in Croatia, click here.

Translated from Jutarnji List (reported by Marina Klepo).

Monday, 7 May 2018

Innovative Companies to Have Easier Access to Financing

ZAGREB, May 7, 2018 - The European Investment Fund (EIF) and UniCredit on Monday signed an agreement giving innovative companies access to 340 million euro.

Sunday, 18 February 2018

Zagreb Stock Exchange Launches Platform for SMEs

ZAGREB, February 18, 2018 - The Zagreb Stock Exchange (ZSE) has launched a new trading platform intended for small and medium-sized enterprises in order to make it possible for them to have access to capital at all stages of their growth.

Wednesday, 14 February 2018

More than 50% of Croats Are Financially Illiterate

ZAGREB, February 14, 2018 - Finance Minister Zdravko Marić said on Wednesday that Croatia was above the global average in financial literacy but that there was a lot of room for progress given that more than half of citizens could not be defined as financially literate.

Wednesday, 30 August 2017

Over 1,000 Personal Bankruptcy Proceedings Initiated

For the procedure to be launched, a person has to be more than 30,000 kunas in debt.

Monday, 15 May 2017

Croatia to Leave Excessive Deficit Procedure?

“The debt and the deficit have fallen, and Croatia is finally on the right path,” says the Finance Minister.

Tuesday, 20 September 2016

In Croatia, 619 Persons File for Personal Bankruptcy

Small number of personal bankruptcies is not a sign that people have a lot of money, but only that this is still a new legal option which is unknown to many.

Tuesday, 30 August 2016

Croatia's Leasing Sector Growing Again

There are 20 companies offering leasing financing services.

Thursday, 21 April 2016

Finance Minister Talks about Latest Deficit Data and Privatization of Public Companies

Unexpectedly positive data on last year's deficit is good news for the new Finance Minister.

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