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Development of Electronic Payments in Georgia

Author

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  • Mushkudiani Nino

    (Business Academy of Georgia, Georgia Republic)

Abstract

Electronic payments are considered to be a fast and secure alternative for traditional payment methods. Today, it is impossible to imagine modern bank operations, commercial transactions and other payments without electronic payments. This article shows that electronic payments are not the only means for reducing costs with respect to other payment methods, such as cash, but can also generate significant benefits for increasing economic development and reducing shadow economy. The paper focuses on the development of electronic payments in Georgia and its impact on the economy of the country. Over the decades, the payment systems in Georgia have evolved significantly in line with the technological advancement. Significant progress has been achieved in improving the e-payment systems infrastructure. The evolution of e-payments in Georgia can be characterized by the following: debit (including prepaid) and credit cards, credit and debit transfers compose a core set of noncash payment types commonly used today by consumers and businesses. These core noncash payment types are used both in traditional ways, such as in-person purchases, payroll deposits, and bill payments, and in innovative ways, such as contactless and mobile payments, e-commerce and online bill payments. Using the economic-mathematical analyses of the information taken from the web-page of the National Bank of Georgia and commercial banks’ publications, a mathematical model was built, based on which the positive relationship between e-payments and economic growth in terms of real GDP was shown.

Suggested Citation

  • Mushkudiani Nino, 2018. "Development of Electronic Payments in Georgia," Economics and Culture, Sciendo, vol. 15(2), pages 64-74, December.
    • Handle: RePEc:vrs:ecocul:v:15:y:2018:i:2:p:64-74:n:7
    DOI: 10.2478/jec-2018-0021
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    References listed on IDEAS

    as
    1. Galbraith, John W. & Tkacz, Greg, 2015. "Nowcasting GDP with electronic payments data," Statistics Paper Series 10, European Central Bank.
    2. Bappaditya Mukhopadhyay, 2016. "Understanding cashless payments in India," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-26, December.
    3. Schmiedel, Heiko & Hasan, Iftekhar & De Renzis, Tania, 2013. "Retail payments and the real economy," Working Paper Series 1572, European Central Bank.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Payment systems; Electronic Payment Instruments; Payment Cards; Correlation-Regression analyses;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics

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