Kazakhstan's Cashless Transactions Top Out at 85% in the Year 2024, According to the National Bank
In a significant shift towards a digital economy, Kazakhstan's cashless transactions surged, with over 85% of transactions conducted digitally in 2024. This surge can be attributed to a combination of factors, including the Covid-19 pandemic, technological advancements, and government initiatives.
The pandemic played a significant role in accelerating the adoption of digital financial services. Social distancing measures and lockdowns limited physical cash transactions and in-person banking, pushing consumers and businesses to adopt online banking and digital payments more rapidly. The increased demand for contactless payments to reduce virus transmission risks heightened the appeal of cashless methods. Financial institutions and businesses accelerated their digital transformation efforts during the pandemic to meet this new demand.
Technological growth in the fintech sector has been a key driver of this shift. The global fintech market has expanded rapidly, integrating technologies such as mobile payments, digital banking, blockchain, AI, and big data analytics. This growth facilitated easier access to online banking and cashless payment methods in Kazakhstan, enhancing user experience and security.
The surge in point-of-sale (POS) terminals and digital payment acceptance points also accelerated cashless transactions. The POS terminal market is growing at a CAGR of over 8% globally, facilitating widespread use of cards and digital wallets. In Kazakhstan, the number of POS terminals grew by 25% to reach 1.16 million units as of July 2024.
Government and regulatory initiatives have also boosted online banking uptake and electronic transactions. Kazakhstan's authorities promoted digital payments for social benefits distribution, e-government services, and digital identification such as digital signatures, which have contributed to the rise in online banking usage. More than 70% of the economically active population in Kazakhstan now uses online banking.
However, data on the total number of active payment cards and the percentage of cashless transactions for specific years, such as 2023 and 2020-2024, were not provided in the National Bank of Kazakhstan's latest report. The report did, however, reveal that the number of online banking users in Kazakhstan has increased 4.6 times in the past five years, totaling 23.3 million.
The e-commerce sector in Kazakhstan has also expanded, with the number of transactions increasing 4.3 times from 2019 to 2023. The average transaction value in the e-commerce sector has risen 1.5 times to 28,551 tenge (US$55.3). The National Bank of Kazakhstan published an annual report on the development of the national digital financial infrastructure in January 2021.
In conclusion, Kazakhstan's shift towards a digital economy is a testament to the country's commitment to embracing technological advancements and fostering a cashless society. The Covid-19 pandemic has acted as a catalyst, intensifying pre-existing trends towards digitalization and cashless payments, leading to a marked rise in the volume of such transactions between 2019 and 2024.
The growth in the fintech sector, driven by technologies such as mobile payments, digital banking, blockchain, AI, and big data analytics, has been instrumental in facilitating easier access to online banking and cashless payment methods in Kazakhstan. Financial institutions and businesses have accelerated their digital transformation efforts in response to the increased demand for contactless payments during the Covid-19 pandemic.
