From Cash to Biometrics: Payment Methods Preferred by Kazakhstanis and Why
Financial experts discuss how Kazakhstan's payment ecosystem is evolving.
Payment innovation in Kazakhstan is gaining significant momentum, reflected in fintech industry growth and advanced technology adoption.
In June 2023, President Kassym-Jomart Tokayev announced Kazakhstan's 20th place globally in digitalization speed. Recent years have seen the republic make substantial strides in digital technology implementation, including payment systems, significantly impacting both the national economy and citizens' daily lives. A notable example is the mass adoption of QR payments, which gained popularity through convenience and security.
PR agency ITCOMMS, in collaboration with Informburo.kz, presents expert insights on how payment systems are transforming life in Kazakhstan today and their future trajectory.
From Cash Payments to Mobile Banking and Biometrics.
Before the implementation of modern payment solutions, Kazakhstan's financial system primarily relied on cash transactions and traditional banking services. Until recently, Kazakhstanis typically had a single bank card for salary payments, which was mainly used to withdraw cash. Not every store could afford to install terminals for cashless payments.
Soon, payment terminals became more widespread, now present in virtually all stores. People also have more bank cards that they actively use, rather than just withdrawing cash from ATMs.
Later, Kazakhstan launched an instant payment and transfer system between banks and began using QR codes. This significantly simplified the payment process for both individuals and entrepreneurs, with mobile transfers becoming one of the most popular forms of payment.
Overall, mobile banking can be considered the foundation without which cashless transactions wouldn't be as convenient. The ability to order a new card or block a lost one, as well as send money to another person or pay a loan – all of this can be done using a simple smartphone.
Mobile banking appeared in Kazakhstan just 11 years ago. In 2011, QAZKOM bank was the first in the country to launch its own application.
Currently, Kazakhstan's mobile banking is considered one of the best not only in Central Asia but also in Eastern Europe and the Caucasus. In 2023, analytical agency SME Banking Agency conducted research and compiled a rating of the best mobile banks for business in Central Asia, Eastern Europe, and the Caucasus. Five banks from Kazakhstan made it into the top 15, with three of them occupying the top positions – ForteBank, Halyk Bank, and Jusan.
Additionally, Kazakhstan is actively implementing more advanced payment systems that enable payments or access to money through biometrics. Currently, some banks' ATMs allow cash withdrawals using biometrics with just a mobile phone. Pilot projects for FacePay biometric payments have also been launched in Almaty and Astana. In Astana, it's used for bus fare payment, and in Almaty - for metro rides.
Popular Payment Methods Among Kazakhstanis
1. QR codes - one of the most popular methods. However, it has several drawbacks. One of the most significant is the lack of centralization, meaning you need a specific app to make payments (for example, Kaspi QR codes can only be used through the Kaspi app). Internet connection is required, and QR code payments only work within Kazakhstan.
2. Bank cards - including both physical and virtual cards linked to Apple / Google / Garmin Pay wallets. According to Mastercard, Kazakhstan ranks 10th in contactless payment adoption growth. Previously, bank cards were just keys to bank accounts, but now payment sources can include bonus accounts.
3. Electronic wallets - these can be considered substitutes for real money. In Kazakhstan, they operate with all wallet transactions being prepaid with money in a bank account. Electronic money can be fully converted back to real money in a bank account.
Andrey Sedenko noted that one advantage of electronic money is flexibility, with many potential use cases. He emphasized that in the next few years, we'll see a flourishing of fintech solutions based on electronic wallets, used across various aspects of life - from paying restaurant bills to tax administration.
Impact on Economy and Daily Life
Payment system development positively affects Kazakhstan's economy by improving transparency and financial inclusion. While the widespread adoption of QR payments has improved user experience, it has also created opportunities for fraud and unofficial business practices.
For example, in 2022, bus drivers in Pavlodar substituted official QR codes with their personal ones. Now, according to tax legislation, mobile transfers can only be used for personal purposes, and individual entrepreneurs cannot accept payments for goods or services this way.
In everyday life, modern payment solutions make daily transactions faster and more convenient. Online banking and mobile apps enable purchases, bill payments, and money transfers without visiting bank branches, saving time and simplifying financial operations.
A Tarlan Payments representative described payment systems' impact on the economy:
"If money is blood, payment systems are the circulatory system. They enable quick, convenient, and transparent payments for services and transfers between people."
The chairman of Kazakhstan's National Payment Corporation, Binur Zhalenov, compared payment systems to "roads for moving funds":
"They need to be wide and convenient enough for both old and new cars. Given the digital economy, we need modern payment rails. This will bring new innovative services to Kazakhstanis."
Additionally, high competition among banks benefits Kazakhstanis through attractive bonuses. Payment instruments can provide advantageous installment plans for necessary purchases when personal funds are insufficient.
Current Payment Trends
Several trends are observed in Kazakhstan's market:
- Mobile transfer systems continue to evolve with new security and convenience features
- Online banking users are steadily increasing, up 15% according to recent studies
- Digital tenge - Kazakhstan's third form of national currency, planned for implementation by 2025
Experts note that biometric payment systems will continue to develop. Existing projects will expand, and new formats will emerge. Two startups are already working on hand biometric payment methods.
Market players see great potential in biometric payments for regular transactions, allowing customers to pay anywhere, anytime without devices.
The National Bank plans to introduce unified QR codes usable across all banks by early 2025.
Future Outlook
Further integration of digital payment solutions into daily life is expected. New technologies like biometric authentication and AI promise to make payment systems more secure and convenient. Mobile apps may expand functionality to handle all financial matters in one place.
Payment innovations have significantly transformed the country's financial landscape, making it more modern and user-friendly. The implementation of QR codes, mobile transfers, and online banking growth demonstrate high digitalization levels that will contribute to improving the country's economic situation, transparency, and convenience of financial operations for citizens, according to experts.
In June 2023, President Kassym-Jomart Tokayev announced Kazakhstan's 20th place globally in digitalization speed. Recent years have seen the republic make substantial strides in digital technology implementation, including payment systems, significantly impacting both the national economy and citizens' daily lives. A notable example is the mass adoption of QR payments, which gained popularity through convenience and security.
PR agency ITCOMMS, in collaboration with Informburo.kz, presents expert insights on how payment systems are transforming life in Kazakhstan today and their future trajectory.
From Cash Payments to Mobile Banking and Biometrics.
Before the implementation of modern payment solutions, Kazakhstan's financial system primarily relied on cash transactions and traditional banking services. Until recently, Kazakhstanis typically had a single bank card for salary payments, which was mainly used to withdraw cash. Not every store could afford to install terminals for cashless payments.
Soon, payment terminals became more widespread, now present in virtually all stores. People also have more bank cards that they actively use, rather than just withdrawing cash from ATMs.
"Over the past 10 years, the number of terminals has increased manifold, as has the number of bank cards. Now even small stores have two or three terminals. Consumers' wallets also contain multiple cards. This growth was facilitated by the aggressive policies of banks and payment systems, as well as the nearly simultaneous entry of Google, Apple, Samsung, and Garmin Pay into Kazakhstan," notes Andrey Sedenko, CEO of Tarlan Payments
Later, Kazakhstan launched an instant payment and transfer system between banks and began using QR codes. This significantly simplified the payment process for both individuals and entrepreneurs, with mobile transfers becoming one of the most popular forms of payment.
Overall, mobile banking can be considered the foundation without which cashless transactions wouldn't be as convenient. The ability to order a new card or block a lost one, as well as send money to another person or pay a loan – all of this can be done using a simple smartphone.
Mobile banking appeared in Kazakhstan just 11 years ago. In 2011, QAZKOM bank was the first in the country to launch its own application.
Currently, Kazakhstan's mobile banking is considered one of the best not only in Central Asia but also in Eastern Europe and the Caucasus. In 2023, analytical agency SME Banking Agency conducted research and compiled a rating of the best mobile banks for business in Central Asia, Eastern Europe, and the Caucasus. Five banks from Kazakhstan made it into the top 15, with three of them occupying the top positions – ForteBank, Halyk Bank, and Jusan.
Additionally, Kazakhstan is actively implementing more advanced payment systems that enable payments or access to money through biometrics. Currently, some banks' ATMs allow cash withdrawals using biometrics with just a mobile phone. Pilot projects for FacePay biometric payments have also been launched in Almaty and Astana. In Astana, it's used for bus fare payment, and in Almaty - for metro rides.
Popular Payment Methods Among Kazakhstanis
1. QR codes - one of the most popular methods. However, it has several drawbacks. One of the most significant is the lack of centralization, meaning you need a specific app to make payments (for example, Kaspi QR codes can only be used through the Kaspi app). Internet connection is required, and QR code payments only work within Kazakhstan.
2. Bank cards - including both physical and virtual cards linked to Apple / Google / Garmin Pay wallets. According to Mastercard, Kazakhstan ranks 10th in contactless payment adoption growth. Previously, bank cards were just keys to bank accounts, but now payment sources can include bonus accounts.
3. Electronic wallets - these can be considered substitutes for real money. In Kazakhstan, they operate with all wallet transactions being prepaid with money in a bank account. Electronic money can be fully converted back to real money in a bank account.
Andrey Sedenko noted that one advantage of electronic money is flexibility, with many potential use cases. He emphasized that in the next few years, we'll see a flourishing of fintech solutions based on electronic wallets, used across various aspects of life - from paying restaurant bills to tax administration.
Impact on Economy and Daily Life
Payment system development positively affects Kazakhstan's economy by improving transparency and financial inclusion. While the widespread adoption of QR payments has improved user experience, it has also created opportunities for fraud and unofficial business practices.
For example, in 2022, bus drivers in Pavlodar substituted official QR codes with their personal ones. Now, according to tax legislation, mobile transfers can only be used for personal purposes, and individual entrepreneurs cannot accept payments for goods or services this way.
In everyday life, modern payment solutions make daily transactions faster and more convenient. Online banking and mobile apps enable purchases, bill payments, and money transfers without visiting bank branches, saving time and simplifying financial operations.
A Tarlan Payments representative described payment systems' impact on the economy:
"If money is blood, payment systems are the circulatory system. They enable quick, convenient, and transparent payments for services and transfers between people."
The chairman of Kazakhstan's National Payment Corporation, Binur Zhalenov, compared payment systems to "roads for moving funds":
"They need to be wide and convenient enough for both old and new cars. Given the digital economy, we need modern payment rails. This will bring new innovative services to Kazakhstanis."
Additionally, high competition among banks benefits Kazakhstanis through attractive bonuses. Payment instruments can provide advantageous installment plans for necessary purchases when personal funds are insufficient.
Current Payment Trends
Several trends are observed in Kazakhstan's market:
- Mobile transfer systems continue to evolve with new security and convenience features
- Online banking users are steadily increasing, up 15% according to recent studies
- Digital tenge - Kazakhstan's third form of national currency, planned for implementation by 2025
Experts note that biometric payment systems will continue to develop. Existing projects will expand, and new formats will emerge. Two startups are already working on hand biometric payment methods.
Market players see great potential in biometric payments for regular transactions, allowing customers to pay anywhere, anytime without devices.
The National Bank plans to introduce unified QR codes usable across all banks by early 2025.
Future Outlook
Further integration of digital payment solutions into daily life is expected. New technologies like biometric authentication and AI promise to make payment systems more secure and convenient. Mobile apps may expand functionality to handle all financial matters in one place.
"Despite Kazakhstan's advanced fintech sector, there's still room for growth. The market capacity remains large. Kazakh startups are in demand globally and can offer interesting solutions both domestically and internationally. This attracts worldwide investors ready to support Kazakh innovative products. I think we'll see new projects and tools that will improve Kazakhstanis' lives," - said Yerik Aubakirov, CEO of EA Group investment holding
Payment innovations have significantly transformed the country's financial landscape, making it more modern and user-friendly. The implementation of QR codes, mobile transfers, and online banking growth demonstrate high digitalization levels that will contribute to improving the country's economic situation, transparency, and convenience of financial operations for citizens, according to experts.