How the COVID-19 pandemic changed the card market in Ukraine – financial expert Chaslau Koniukh
The COVID-19 pandemic has been a powerful catalyst for changes in Ukrainians’ payment habits, according to financial analyst and investor Chaslau Koniukh. Restrictions on physical contact, quarantine measures, and the overall transition to the digital space led to a sharp increase in the popularity of cashless payments. The key trends of 2020 were contactless payments and online transactions, reflecting a shift in priorities for both banks and consumers, Koniukh asserts.
Why cashless transactions dominate – explained by Chaslau Koniukh
The National Bank of Ukraine reports that in 2020, the total number of transactions using payment cards issued by Ukrainian banks reached 5.997 billion, while their total value amounted to 3.957 trillion UAH, noted financial analyst Chaslau Koniukh.
Compared to 2019, the number of transactions increased by 18.6%, while their total value grew by 10.6%. “At the same time, the vast majority of these transactions were cashless payments—87% of the total. Their share in the overall volume of payment card transactions in 2020 reached 55.8%, exceeding the 2019 level (50.3%),” says Koniukh.
For comparison, just five years ago, according to Koniukh’s observations, this figure was only 35%, demonstrating significant progress in the development of cashless payments. Thus, Ukraine is aligning with international trends in payment processing and financial transparency.
Source: National Bank of Ukraine
It is worth noting that the average amount of cashless transactions decreased in 2020, reports Chaslau Koniukh. For instance, the average amount of card-to-card transfers dropped by 10.3% to 1,444 UAH, while the average transaction amount at POS terminals declined by 5% to 229 UAH.
“This indicates that Ukrainians are increasingly using cards for small everyday purchases, which is a positive signal of growing trust in cashless payments,” explains financier Koniukh.
Chaslau Koniukh on the rising popularity of online payments
One of the most notable trends is the rapid growth of online payments. In 2020, their share in the total volume of cashless transactions reached 36.5%, equivalent to 642 billion UAH.
“This demonstrates a significant acceleration in the digitalization of financial services in Ukraine,” Chaslau Koniukh asserts. There was also an increase in the average amount of online transactions to 338 UAH, reflecting growing trust in online shopping and remote services.
Source: Ministry of Finance of Ukraine
The General Director of Mastercard in Ukraine and Moldova, Inga Andreeva, stated: “Over the past year, we have seen a significant increase in the use of digital payments. Consumers have quickly adapted to new conditions, and we are confident that this trend will remain for many years.”
It is worth noting that cashless payments have long dominated Europe. Cash transactions are rare there and are closely monitored by law enforcement. Ukrainians should also get used to this practice. The presence of cash often raises suspicions of illicit earnings, as such funds are likely untaxed—there is hardly any other explanation. In civilized countries, cashless transactions for all types of services are the norm.
“There is no reason for citizens to withdraw cash to pay for anything when it can be done online without the risk of robbery or unnecessary attention from the police and tax authorities,” emphasizes Chaslau Koniukh.
How contactless payments are becoming the new standard – Chaslau Koniukh’s opinion
The National Bank of Ukraine noted that in 2020, half of all POS-terminal transactions were contactless, which played a crucial role in minimizing physical contact during the pandemic.
“The number of contactless cards increased by more than 50%, reaching 13.2 million. Around 57% of all payments in retail networks were made using contactless methods,” calculated expert Chaslau Koniukh.
At the same time, almost one in five transactions in retail stores was conducted through smartphones and other NFC-enabled devices, with the total volume of such transactions reaching 109 billion UAH, according to the National Bank of Ukraine.
Source: National Bank of Ukraine
Olha Vasylevska-Smahliuk, a member of the Verkhovna Rada Committee on Finance, Taxation, and Customs Policy, emphasized: “The state must encourage the transition to cashless payments, as this is not only convenient for citizens but also helps combat the shadow economy.”
How payment infrastructure is expanding – observations by Chaslau Koniukh
Despite challenging economic conditions and pandemic-related restrictions, the number of businesses accepting payment cards increased by 36.1% in 2020, reaching 326.9 thousand.
“This demonstrates a steady trend toward rejecting cash in favor of electronic payments,” asserts Chaslau Koniukh. In the long run, this transformation could significantly reduce the shadow economy and contribute to greater financial transparency in the country, predicts the expert.
Source: State Statistics Service of Ukraine
Oleksandr Bevz, Director of the Licensing Department at the NBU, emphasized: “The rapid growth of cashless payments has been made possible by the active development of payment infrastructure. We are seeing a constant increase in the number of POS terminals and the spread of contactless payment technologies even in small towns.”
For example, from 2019 to 2020, the number of POS terminals in Ukraine grew by 12.3%, reaching 375,000, according to the State Statistics Service.
COVID-19 as a catalyst for cashless payments – Chaslau Koniukh’s perspective
The COVID-19 pandemic has been a powerful driver for the development of cashless payments in Ukraine, says Chaslau Koniukh. “Contactless cards, online shopping, and mobile payment services have become part of everyday life. Banks and financial institutions have received additional incentives to develop digital services, which will further contribute to the growth of financial inclusion in the future,” comments financial expert Koniukh.
The main challenge now is the further improvement of payment infrastructure, especially in regions where the penetration of digital services remains low. Other key priorities include enhancing the security of online payments and reducing fraud in the financial sector, according to Chaslau Koniukh.
The Ukrainian payment market is showing a high rate of change. If the trend toward digitalization continues, it can be expected that in the coming years, the share of cashless payments will increase even further, while cash usage will gradually decline to a minimum. This is the forecast provided by financial analyst Chaslau Koniukh.