Galim Khussainov
Inflation and the tengeBankingLending and mortgagesTaxationEconomy and public policyManagement

Economy and public policy · 1 min read

On AFD

Translated from Russian with the help of AI. Original: Russian version

Theses from Astana Financial Days: barriers to the shift to cashless payments, the shadow economy, financial literacy and lending.

I took part in two sessions at Astana Financial Days.

The first session was devoted to the problems of cash payments. Kazakhstan already has a fairly high share of cashless payments, but a great many cash transactions remain. At present, 80% of all payments and transfers are made cashlessly.

My theses on this issue were as follows:

Moving the remaining cash transactions to cashless will be difficult, but it is possible. Three of the hardest barriers remain:

The shadow economy. Because cash allows funds to be transferred anonymously, shrinking this segment requires action in two directions. First, the shadow economy itself must be reduced, provided the state pays attention to the problem. Second, the development of cryptocurrencies and digital currencies may in future replace physical cash and perform the functions of cash that those in the shadow economy value so highly.

The lack of lightweight infrastructure. In remote areas of the country, and in the microbusiness segment, building infrastructure with POS terminals and cash registers is problematic. To address this, we need to change the architecture of payment itself: remove the cash register from the process for cashless payments and move all payments onto the mobile phone through the development of tap-to-phone and P2P technologies. The functions of the fiscal data operator could also be transferred to the bank.

Lack of financial literacy and distrust of banks. Here, financial literacy must be developed from an early age, with lessons on it built into the education system. To overcome distrust of the system, more information should be provided on the availability of deposit insurance, and statistics on robberies should be shown.

In the second session, I tried to explain the problems of lending in the banking sector and what needs to be done.

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