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stoerer 07 2018 | NEWS

 11 © Shutterstock/Google

Many payments in Eastern Europe are still cash-based

Google Play offers its users in Poland the popular alternative payment method paysafecard. Data from PPRO Financial Ltd. for Eastern Europe proves that this is a clever move. Many of the online payments in the region are still cash-based.

With US$47.2 billion in transactions annually, Eastern Europe is the fourth-largest e-Commerce and online payments market in the world, trailing Asia-Pacific, North America and Western Europe by a significant margin. In contrast to more developed markets, where e-Commerce growth has slowed, the relatively young e-Commerce and online payments market in this region offers significant opportunities for growth. e-Commerce accounted for 1.6% of Eastern Europe’s GDP of US$2,893 billion in 2016, and e-Commerce growth in the region is expected to exceed 15% in the near future. Some countries like Poland (+25%), Hungary (+24%) or Bulgaria (+18,1%) even have had growth rates well above average in recent years. 


With 362 million people over the age of 14 living in the region, 186 million of them, or around 50%, use the Internet. 58 million of these currently shop and buy goods and services online. Internet penetration is relatively low in comparison with the rest of Europe, but this gap is gradually being closed with the roll-out of more stable and sophisticated infrastructure and increased smartphone penetration. Slovakia (80 %), the Czech Republic (74%), Hungary (75%) and Poland (61%) are the countries, where most people have access to the internet. 

With a rapid adoption rate, smartphones are increasingly being used to gain access to e-Commerce opportunities which would otherwise be restricted by poor infrastructure, a problem which is particularly prevalent in rural areas in Eastern Europe. The influence of mobile devices is especially noticeable in countries such as Poland and Ukraine, where m-Commerce growth is outpacing e-Commerce growth.


In many areas relating to finance and commerce, the region demonstrates trends which are an inheritance of the planned economy under which it operated for so many years. Bank account penetration is still at an evolutionary stage; 58% of the inhabitants of Eastern Europe aged 15+ have bank accounts, compared to a global figure of 61%. This figure is a lot higher for emerging markets like Poland (78%), Hungary (72%) or Slovakia (77%), of course. But the number of unbanked households is still high compared to the rest of Europe. 

The same applies to credit card penetration which is only 16% for the whole region against the global 18%. Even in Poland and Hungary it is only 17% and 12% respectively. Banking and credit card providers in the region are hindered by limited infrastructure, and a strong cultural preference for dealing in cash. In most countries a large part of e-Commerce transactions are still cash-based. 48% of them are still carried out in a traditional manner, either by settling the bill at a designated physical location or paying cash on delivery. In the Czech Republic (67%), in Hungary (60%) or Romania (90%) traditional cash-based online transactions are especially popular. 

But now alternative payment methods like paysafecard are starting to gain a foothold. This will surely help the region’s e-Commerce sector to reach its full maturity.