Electronic Payments Further Increase in Hungary

Electronic payments infrastructure further expanded in 2023 Q1. In addition to the more than 50,000 new accounts, the number of cards in active use also increased. On the acceptance side, the number of acceptance points both in the physical and online space increased by 4-5% in a quarter, the National Bank of Hungary (MNB) reports.

Electronic payments continue to be secure, with frauds linked to card transactions being the most common method is phishing and the value of the losses to cardholders continuing to rise. In 2023 Q1, turnover in the payment systems rose significantly. Payment system liquidity declined in 2023 Q1, but remains ample.

The number of payment accounts managed by payment service providers in Hungary exceeded 10.8 million, due to over 50,000 new accounts opened. In particular, the number of accounts held by natural persons grew, further increasing the banking coverage of the population, and the share of accounts available online also continued to increase. At the end of the quarter, 83.5% of accounts were already accessible in software environment.

The number of payment cards used for purchases continued to increase, despite a slight decrease in the total number of cards. In the quarter, 70.5% of the cards were used for purchase transactions. Within one quarter, the number of cards registered in mobile wallet applications increased by 6.7%, indicating a further spread of innovative payment methods.

Compared to the previous quarter, the number of merchant acceptance points belonging to the network of domestic payment service providers increased. The number of merchant acceptance points rose by 4.6% to 146,000 while the number of POS terminals operating at these points increased by 6.2% to 243,000. 97% of these instruments are already enabled for contactless payments. In addition, the number of online acceptance points reached 44,000, an increase of 5.5% compared to the previous period, and the number of ATMs rose slightly during the quarter, after a decline in recent periods.

Based on transaction data, compared due to the seasonal effects to the same period a year ago indicate that the spread of electronic payment methods continued. The number and value of domestic purchase transactions completed with payment cards issued in Hungary increased by 16.8% and by 30.9%, respectively, compared to the same period last year. There was a greater increase in the number and value of cross-border purchase transactions, up by 27.3% and 36.9%, respectively.

The decline in the share of cash payments is demonstrated by the fact that the number and value of cash withdrawals using domestic payment cards decreased compared to the first quarter of the previous year, while the value of cash deposits using payment cards increased by 25.6%. Furthermore, the number and value of cash deposits at bank branches decreased by 13.3% and 10.9%, respectively.

Compared to 2022 Q1, total revenue of domestic payment service providers from the provision of payment services in Hungary increased by HUF 28.6 billion, with 70% of the increase coming from the increase of the part proportionate to the value of transactions. Revenue from providing payment card acceptance services increased by31% to HUF 23.3 billion in 2023 Q1 compared to the same period in 2022, driven by a higher increase in the share of fees on turnover charged to merchants in the smallest category of quarterly purchase transactions conducted with payment cards of less than HUF 1 million.