1 Executive Summary PAYMENT SERVICE DEVELOPMENTS Electronic payments developed considerably in 2020 as well, although the outbreak of the coronavirus pandemic had a significant impact on the developments. Improvement in the infrastructure was primarily characterised by the wider availability of electronic payment options as a result of the change in consumer habits in view of the coronavirus pandemic and the introduction of the instant payment service. Looking at the taxpayers obliged to use online cash registers it is seen that the increase in the card acceptance ratio was more than twice faster than in 2019, a major contributor to which at the end of 2020 may also have been the preparation for the amendment to the Act on Trade entering into force on 1 January 2021. The pandemic had a major impact on payment service developments as well, although major differences are seen across payment methods and situations. In parallel with the introduced restrictions, the general cautiousness and the deceleration in economic developments, the growth rate of the turnover of the main payment methods typically declined. However, while in the case of the growth rate of the number of payment card purchase transactions there was a decrease of more than 10 percentage points, the decline in terms of credit transfer transactions was only minimal, which was also a result of the fact that the instant payment service became available. Nevertheless, it is an important development that the number of payment card purchases still exceeded 1 billion, and the number of cash withdrawals fell by more than 10 per cent. Moreover, the value of payment card purchases exceeded that of cash withdrawals for the first time. In spite of the outbreak of the coronavirus pandemic, the efficiency of domestic payments improved in 2020. Hungary continues to be among the leaders in the European Union in terms of the total value of credit transfers as a percentage of GDP. Moreover, this indicator even improved last year, which is mainly attributable to the fall in GDP due to the coronavirus pandemic and to the expanding possibilities of the use of credit transfers, as the instant payment service became available. In addition, last year there was a previously unseen, nearly 5 percentage points increase in the card purchases to household consumption ratio, which was greatly attributable to the change in payment habits. Consumers opted for contactless card payments much more often than before. As a result, the value of payment card purchases accounted for more than
one third of the total household consumption in 2020. A positive trend is observed in the case of bill payments as well. More than two thirds of them were conducted by using some type of electronic payment method. Notwithstanding the favourable developments, banks’ unfavourable pricing structure concerning credit transfers is still a general obstacle to the further spreading of electronic transactions. Data of bank statements of fees reveal that customers still initiate very few transactions electronically, and at the same time they pay high monthly fees in spite of the moderate number of electronic transactions conducted. Looking at domestic actors’ incomes from payment services it is clear that the pricing of credit transfers is still unfavourable from a customer point of view due to the items burdening the transactions. At the same time, in order to support electronic payments, and within that the services relying upon the instant payment system, it is essential to widely introduce account products built on package-based pricing that – similarly to payment cards – do not apply direct transaction fees in the case of credit transfer transactions either. Nevertheless, even in the case of the currently available bank products relatively many customers could reduce their respective payment costs by choosing their account package in a prudent manner. Therefore, providing adequate information to customers, making payment products and their related costs as transparent as possible and the strengthening of financial awareness are also important factors in terms of facilitating the spreading of electronic payments. According to the payment inspections conducted in 2020, the operation of the payment service providers under review is satisfactory in general. Nevertheless, deficiencies were found by the majority of the inspections completed. According to the findings of the payment inspections, payment service providers typically violated the rules concerning the immediate crediting of the amount of incoming payment transactions. In addition, different violations of the rules related to the format and content requirements, amendment to and termination of framework contracts as well as to the provision of information prior to concluding the framework contract were also found. At the same time, according to the examination of the sector related to instant credit transfers, there were no significant problems in the period following the launch of the system in March 2020.
PAYMENT SYSTEMS REPORT • JULY 2021
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