Five-fold Increase in Card Purchases in Ten Years

The Financial Stability Council of the National Bank of Hungary (MNB) has discussed and approved the 2022 Payment Systems Report. The Council found that payment service developments in 2021 returned to pre-pandemic trends, bringing about dynamic development in terms of the further spread of electronic payments.

The development of the electronic payment infrastructure in Hungary was primarily driven by the transformation of consumer habits due to digitalisation processes and by the modification to the Act on Trade, effective from 1 January 2021, affecting taxpayers required to use online cash registers. As for turnover, the increase in payment card purchase transactions, which had been a driving force of electronic payments, exceeded 20 per cent again, with Instant payment also catching up. The domestic financial infrastructures overseen by the MNB operated in an efficient and safe manner in 2021 as well, adequately addressing the emerging challenges. With high availability, they supported the functioning of the money and capital markets, thereby contributing to the strengthening of financial stability.

Although returning in smaller or bigger waves, coronavirus remained a determining factor in everyday life, its effects in the area of payments were more dampened, than in the previous year. As a result of favourable developments, the domestic payment card acceptance infrastructure expanded significantly, as well as an increasing number of consumers started using innovative electronic payment solutions, primarily mobile wallet services connected to payment cards. Overall, the lack of electronic payment options no longer prevents the development. At the same time, further progress is expected resulting from the spread of end-user services built on Instant payment, such as the QR code-based payment initiation and the request-to-pay service.

Regarding turnover, pre-pandemic trends returned despite the fact that some of the restrictions remained in place in 2021 due to the recurring waves of the pandemic. In addition to payment card purchase transactions, credit transfer turnover also picked up considerably. Moreover, Instant payment reached the level that card turnover has shown for years. The 21 per cent annual growth in the number of payment card purchase transactions can be considered impressive despite the slower rise in 2020 and the resulting unusually low base. In addition, the number of instant payment transactions was nearly 23 per cent up, excluding the effect of the incomplete year (Instant payment became available for customers on 2 March 2020). Nevertheless, major differences between payment situations were also observable in 2021. The most important change was the result of consumers’ gradual return to physical space, and the number of cross-border transactions also increased significantly as a result of the lifting of restrictions on travelling.

One of the most crucial objectives of the MNB related to payments is to support the further dynamic growth in electronic transactions. It intends to support the beforementioned goal in the third phase of the development of the instant payment ecosystem through regulatory actions, as well as other enhancements required for a faster spread of end-user solutions, easy to use in any payment situation. Further simplification and acceleration of related payment processes are needed for Instant payment to become a relevant option in any payment situation for customers. In order to achieve this, the MNB is primarily seeking to exploit the opportunities inherent in the domestic QR code standard and the request-to-pay service as efficiently as possible. Within that, the main goal of the MNB is to eliminate market fragmentation by regulating the mandatory QR code reading and request-to-pay message receiving abilities. In addition, it is elaborating a set of rules for the visual identity elements that can be used in commercial payment situations, allowing – as a result of the single appearance – consumers to easily identify the situations where the service is available. Moreover, in order to increase everyday usability, regulating positive feedback, indicating the success of transactions, and its technical standardisation are also planned.