In January 2019, Auka commissioned a survey of 28,000 service, retail and hospitality small and medium businesses across the 28 EU regions. Outlined are some of the key findings from Bulgaria.
89 percent of Bulgarian businesses have some form of online presence, almost spot on with the EU average of 88 percent. This is also very much on par with Bulgaria’s neighbouring countries including Romania and Greece. Unsurprisingly, when we looked at which industries across the EU had the most online presence, “retail” and “hospitality” were ahead of other industries.
What is promising to see is the trend of e-Commerce potential in Bulgaria. 2.6 million Bulgarians purchased goods and services online in 2017, and revenue is expected to show an annual growth rate (2018-2022) of 8.8 percent resulting in a market volume of USD $800 million by 2022. There’s also some 722, 000 online Bulgarian retailers.
The top reasons cited for their online presence include: drive more revenue: 40 percent, retain and acquire new customers: 33 percent, increase customer engagement: 14 percent and take better control of how customers pay: 13 percent.
Of those who answered that they don’t have any online presence, 45 percent said they intend to within the next two years, and a further 30 percent said they weren’t sure.
Current methods of payment:
In Bulgaria, the majority (88 percent) accept cash and 87 percent also accept cards. This is quite significant; the research indicates that Bulgaria’s percentage of card uptake is almost 10 percent higher than the average in the EU. Specifically, it is higher than Croatia, Germany and Greece.
Looking further into methods of payment, 58 percent of businesses are using mobile payments, whether that is contactless technology or via a mobile wallet app using a QR code or identifying phone number. Again, this is higher than the average in Europe and higher than many of its neighbouring countries.
Across the EU, the businesses most likely to accept a form of mobile payments (either contactless or any other type of mobile-based payment) are hospitality businesses serving food or drinks. The types of businesses least likely to accept payments other than cash appear to be service providers and smaller merchants (for example those selling tobacco or convenience goods).
Of those Bulgarian respondents who didn’t select mobile payments as an accepted payment method, 40 percent indicated that they would look to within the next year and a further 42 percent said they weren’t sure if they would or not.
Challenges of accepting cash, card and mobile payments:
We asked respondents what issues (if any) did they have with their current methods of payment. Similar to the rest of the EU, 52
percent of Bulgarian businesses said they didn’t currently face any issues. However, over a third of respondents did comment that cash payments were “time consuming.”
Respondents had even less issues around card-acceptance. On average, around three-quarters (73 percent) of all respondents said they didn’t have any issues. This was higher in Bulgaria, with 79 percent of businesses claiming card payments were issue-free. The concerns that Bulgarian respondents did have were primarily around time (7 percent) and transaction costs compared to value of accepting cards (8 percent).
What do Bulgarian businesses prefer and why?
The favoured method of payment acceptance for surveyed merchants across Bulgaria remains cash, with almost two-thirds (60 percent) selecting cash as their preferred payment acceptance method. Non-cash (card and mobile) is preferred by 40 percent of Bulgarian businesses.
The major reasons for selecting cash as their preferred payment method included: customer preference and convenience. An interesting point to note that customer preference has the biggest influence over which payment methods businesses embrace.
Furthermore, 76 percent of those surveyed said that the government influences, either a little or a lot, how they currently accept payments. This is important to know; the success of mobile payments in Bulgaria depends then on the government’s willingness to progress
with technological change.
When asked which payment trend they predicted would gain the most traction in the coming ten years, the majority (68 percent) of Bulgarian respondents answered: mobile payments (both contactless and other types). Across the EU, there were a combined 72 percent who answered with the same. Mobile payments are clearly recognised as the top payment trend across the continent as well as locally.
Important features of mobile payments
Almost a quarter (24 percent) of surveyed Bulgarian business respondents answered that the most important factors of a proposed payments acceptance solution for them would be the ability to engage with and acquire new customers. A further 23 percent said ease of use would be the most important factor. Other factors include low transaction costs and increased revenue.
We know that in the end, the winning payments app or method will be that which gains ubiquitous approval. On average, more than half of both Bulgarian and EU respondents alike (59 percent) said if there was one payment app available on smartphones to everyone in their region, they would use it to offer their goods or services directly in the app. 24 percent said they weren’t sure.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
