Bank cards in the ecosystems of Ukrainian and European payments

Cards are the preferred method of payment for both consumers and merchants, according to Payments Europe’s ‘Cards in the evolving European payments landscape’ report. I paralleled the observations and conclusions of this report with the Ukrainian payment market. This blog post provides a quick comparison of two different but progressing markets.

The payment landscape in both Europe and Ukraine has undergone profound changes over the past few years. Card payments have made a huge contribution to the digitalization of commerce and society as a whole. Today they are the most frequent electronic payment method in Europe, accounting for 52% of all non-cash transactions in the EU. At the end of May 2020, the share by the volume of non-cash transactions on payment cards in Ukraine was 55.5%. Meanwhile, new forms of payment through fintech solutions are emerging, opening up more opportunities in the market.

The main findings of the ‘Cards in the evolving European payments landscape’ report:

The European payments market has expanded significantly


Over the past few years, most users and businesses have gained access to multiple payment methods besides card, cash, and check. This evolution has been driven by consumer demand and is expected to continue for both online and offline shopping across Europe.

Access: Research from Payments Europe shows that access to debit cards is on a par with access to cash in Europe.

Usage: Consumers estimate that they use cards for about half of their in-store purchases, with other payment methods such as cash, banking apps, and more making up the remainder. The payment methods developed by bigtech have not yet become widespread, but the general consensus is that they will soon expand significantly.


Access: 71% of the urban population aged 16–65 used bank cards in 2020. This is evidenced by data from a Kantar MMI study. Among the young population aged 25–44, this percentage is even higher — 75%. For 4 years, the share of card users has grown by 14%.

Usage: Now every third Internet user aged 16–65 declares that he paid for goods or services on the Internet at least once a month. The volumes of non-cash transactions with payment cards in 2018 were distributed as follows: 35.8% were transactions of transferring money from card to card (P2P transfers); 32.6% — transactions on the Internet; 29.3% — payments in the trading network; 2.2% — transactions using self-service devices.

Such a dynamic is associated with the organic growth of the Ukrainian market, the emergence of new payment systems, and the removal of cashless barriers. More and more Ukrainians are starting to pay online and contactless.

  1. Cards are the most popular payment method for both consumers and retailers


53% of retailers choose cards as their preferred payment method, followed by cash (41%), wire transfer (38%), fintech solutions (31%), mobile wallet (28%) and cryptocurrencies (8%).

The most popular in-store payment method is debit (36%) and credit (19%) cards, as well as cash (23%). Cash is less popular in France and Sweden, where card payments are 72% and 65%, respectively. Three quarters of respondents believe that card payments provide additional value compared to other payment methods (76%).


The trend among sellers in Ukraine is an increase in the share of non-cash payments — from 50% in early 2020 to 65% in 2021. Analysis of the distribution of non-cash transactions by their types from the NBU shows that in January-March 2021, most transactions using cards accounted for:

  • by quantity — for settlements in retail chains — 49.3% (or UAH 402 million);
  • in terms of amount — for card-to-card transfers — 42.1% (or UAH 280 billion).

In general, more than a third of the number of non-cash transactions with a payment card in the first quarter of 2021 were carried out on the Internet (36.7%). In recent months, Ukraine has also witnessed a fierce struggle between the sides FOR and AGAINST the reduction of the interchain rate. This directly affects the attitude of the merchant to payment by cards, because in Ukraine they pay a commission on average of 2%. I wrote in detail about the interchanging rate at the beginning of April.

Consumers and retailers find significant benefits in card payments

Europe / Ukraine

The vast majority of merchants agree that card payments provide additional value over other payment methods. The most important benefits are guaranteed pay, increased sales, and access to a wider customer base.

Convenience and speed (EU data according to the ‘Cards in the evolving European payments landscape’ report):

• Consumers believe that card payments are the best in terms of convenience (49%) and speed (35%).

• Almost 2/3 of retailers (61%) said that paying by card is the most convenient payment method.

Innovation (EU data according to the ‘Cards in the evolving European payments landscape’ report):

• European retailers ranked innovation and customer service as the third priority when choosing a payment method (43%). In terms of the best payment methods and customer service, four-way card schemes (24%) are considered the best for this, especially in Poland (36%).

Safety and security (EU data according to the ‘Cards in the evolving European payments landscape’ report):

• More than 80% of European consumers believe that card payments are safe.

• Regarding card fraud, three out of four consumers know their money will be refunded (75%), while UK users feel safer (81%).

• One third of retail respondents believe that reducing the risk of theft / fraud is the most important benefit of card payments (31%).

Compared to other methods, cards ranked the highest as the best payment method for fraud prevention (33%). Retailers in France (40%), Italy (44%) and Poland (41%) also consider it stable, while Germany and Sweden pay much more attention to financial technology (19% and 17%, respectively, which is significantly higher than in other countries). Cash is still important to UK retailers, with a quarter of respondents saying cash or a check is the best way to prevent fraud (24%).

Retailers believe the value of cards outweighs the cost


The cost of electronic payments with debit cards has decreased in recent years, various technological innovations have taken place in the payment market, and therefore it has become more competitive. It is in the seller’s best interest to compare different tariff formulas as cheaper alternatives often exist.

Retailers overwhelmingly believe that using a card as a form of payment is ultimately cheaper than handling cash. Retailers rated the higher cost of accepting cash in terms of time spent making a deposit (14% more expensive to process cash) and completing a transaction (11%), accounting (10%), and risk of loss/theft (10%). Three quarters (76%) agree that the cost of handling cash (and the associated risks) is more expensive than paying fees for card payments. The survey also shows that the overwhelming majority of retailers (81%) understand why and how fees are charged for accepting card payments (83%).


Unlike Europeans, Ukrainian retail considers working with cards quite costly, because they pay a commission ranging from 1% to 3%. Retailers and restaurants welcome the legislative move to lower the interchange rate and say commission fees of up to 1% meet European standards. At a meeting of the National Reform Council on March 19, 2021, a gradual reduction for interchange rate was discussed: first to 1%, and gradually to 0.5–0.75% by 2023. It is also proposed to reduce the total size of the commission that a business pays for working with cards from January 2022 to 1.3–1.4%, and to reduce it in stages to 0.7–1% in 2023. According to the National Council of Reforms, in 2020, Ukrainian users made about 5.2 billion card payments, for a total amount of payments of about UAH 2.2 trillion. In the first half of 2020, retail paid about UAH 11.35 billion for card payments.

Consumers continue to trust their data and money most to traditional organizations


The payments industry is currently doing well and continues to do better and better, aligning value with costs.


• However, consumers still trust their money to traditional players like banks rather than new players in payments like fintech, big technology and government. Almost half of Europeans would trust the fintech business with their money, but would not trust their data.

• Younger consumers are more likely to trust financial technology with their money and data than older generations.

• Bigtech has a low level of trust.


In Kyiv, 44% of Ukrainians save money for a rainy day, while keeping it in cash. These are the results of a sociological survey conducted by GFK.


Only 4% of respondents are ready to entrust their money to the bank. Experts note that confidence in banks in Ukraine was undermined during the 2008 financial crisis.

There is no doubt that the payments landscape has changed significantly. New payment methods continue to emerge, especially on the Internet, giving consumers more choices. This change was driven by consumer behavior, innovation, technological progress and competition. These trends apply to both Ukraine and the EU. The study shows that in today’s environment, cards have become the most popular payment method for both consumers and retailers due to their significant benefits, including convenience, speed, innovation, security, and even cost.

All of these payments have different functions and capabilities, and consumers are increasingly choosing the option that suits them best. This is one of the reasons why the payments market should be driven by consumer demand rather than rules that will guide consumers in one direction or another. Regulation and policy should always be technology neutral in areas such as retail payments, which relate to the habits of retailers and consumers.




CEO of the international payment system LEO, the shareholder of IBOX Bank

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Alyona Shevtsova (Degrik)

Alyona Shevtsova (Degrik)

CEO of the international payment system LEO, the shareholder of IBOX Bank

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