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Entrepreneurs must create convenient and legal payment options for citizens
Entrepreneurs must create convenient and legal payment options for citizens
In Azerbaijan, there has been an upward trend in the area of cashless payments. By the end of June, the number of payment cards in circulation through banks and the "Azerpost" systems increased by 224,000 compared to May, reaching a total of 18,091,000 cards. Compared to the same period last year, this figure rose by 20.3%. The increase in payment cards was 21.5% for debit cards and 12.6% for credit cards. The growth in payment cards also positively impacted the volume of cashless payments. Over the course of the month, the volume of domestic cashless transactions increased by 1.7 times compared to the same period last year. In June 2024, the volume of domestic cashless payments made via cards amounted to 6.103 million manats.
Incentive measures have changed people's payment habits. Crowds in front of ATMs, which were common a few years ago, have now almost disappeared. Technical capabilities in a favorable environment have also been created to facilitate payments by people using plastic cards.
Instruments Promoting Cashless Payments
In recent years, various factors have influenced the increase in contactless payments, the most important of which are incentive measures. The "Get VAT Back" project implemented by the State Tax Service (STS) under the Ministry of Economy, the introduction of favorable "cashback" mechanisms by banks, participation in various lotteries when paying with plastic cards, etc., are steps taken in this area. These incentive measures have changed people's payment habits. Crowds in front of ATMs, which were common a few years ago, have now almost disappeared. Technical capabilities in a favorable environment have also been created to facilitate payments by people using plastic cards. Now, almost all stores, service venues, and public dining facilities have POS terminals. Citizens use these opportunities to make payments easily and conveniently, while also earning additional bonuses from these transactions.
Sometimes citizens transfer payments from one card to another. In doing so, they unknowingly become participants in a process of violating the law.
Cashless Payments Must Be Accepted Only Through POS Terminals
Citizens' positive attitude toward cashless payments increases transparency in the economy. Payments via plastic cards are made in real-time, and it is possible to track transactions electronically.
Over time, the expansion of cashless payments has unfortunately led some businesspeople to seek "alternative ways." Naturally, this does not apply to properly functioning business entities. However, in some stores, service venues, and restaurants, they refuse to accept payment by plastic cards. For example, they cite a malfunctioning POS terminal, weak internet, or other technical issues as excuses. Sometimes citizens overlook this and transfer payments from one card to another. In doing so, they unknowingly become participants in a process of violating the law. This is because receiving payments via card-to-card transfers is a way to evade taxes. Such payments cannot be tracked. This also leads to the violation of citizens' rights. First and foremost, they miss out on bonuses, cashback, and the "Get VAT Back" rights they would have received when making a cashless payment for goods, services, or work.
It should be noted that businesspeople who engage in such practices may be subject to financial penalties under the Tax Code. Therefore, it is recommended that cashless payments be accepted only through POS terminals, in accordance with legal requirements.
In Azerbaijan, there has been an upward trend in the area of cashless payments. By the end of June, the number of payment cards in circulation through banks and the "Azerpost" systems increased by 224,000 compared to May, reaching a total of 18,091,000 cards. Compared to the same period last year, this figure rose by 20.3%. The increase in payment cards was 21.5% for debit cards and 12.6% for credit cards. The growth in payment cards also positively impacted the volume of cashless payments. Over the course of the month, the volume of domestic cashless transactions increased by 1.7 times compared to the same period last year. In June 2024, the volume of domestic cashless payments made via cards amounted to 6.103 million manats.
Incentive measures have changed people's payment habits. Crowds in front of ATMs, which were common a few years ago, have now almost disappeared. Technical capabilities in a favorable environment have also been created to facilitate payments by people using plastic cards.
Instruments Promoting Cashless Payments
In recent years, various factors have influenced the increase in contactless payments, the most important of which are incentive measures. The "Get VAT Back" project implemented by the State Tax Service (STS) under the Ministry of Economy, the introduction of favorable "cashback" mechanisms by banks, participation in various lotteries when paying with plastic cards, etc., are steps taken in this area. These incentive measures have changed people's payment habits. Crowds in front of ATMs, which were common a few years ago, have now almost disappeared. Technical capabilities in a favorable environment have also been created to facilitate payments by people using plastic cards. Now, almost all stores, service venues, and public dining facilities have POS terminals. Citizens use these opportunities to make payments easily and conveniently, while also earning additional bonuses from these transactions.
Sometimes citizens transfer payments from one card to another. In doing so, they unknowingly become participants in a process of violating the law.
Cashless Payments Must Be Accepted Only Through POS Terminals
Citizens' positive attitude toward cashless payments increases transparency in the economy. Payments via plastic cards are made in real-time, and it is possible to track transactions electronically.
Over time, the expansion of cashless payments has unfortunately led some businesspeople to seek "alternative ways." Naturally, this does not apply to properly functioning business entities. However, in some stores, service venues, and restaurants, they refuse to accept payment by plastic cards. For example, they cite a malfunctioning POS terminal, weak internet, or other technical issues as excuses. Sometimes citizens overlook this and transfer payments from one card to another. In doing so, they unknowingly become participants in a process of violating the law. This is because receiving payments via card-to-card transfers is a way to evade taxes. Such payments cannot be tracked. This also leads to the violation of citizens' rights. First and foremost, they miss out on bonuses, cashback, and the "Get VAT Back" rights they would have received when making a cashless payment for goods, services, or work.
It should be noted that businesspeople who engage in such practices may be subject to financial penalties under the Tax Code. Therefore, it is recommended that cashless payments be accepted only through POS terminals, in accordance with legal requirements.