Consumers in Bulgaria are still predominantly reliant on cash, which accounts for 75.3% of total payment transaction volume. Consumers still frequently use cash for day-to-day, low-value transactions.

However, government initiatives (including ensuring access to basic bank accounts for all individuals) coupled with banks’ and payment companies’ promotional strategies led to payment card transaction volume and value recording
robust compound annual growth rates (CAGRs) during the four-year period under review, 2015–19.

Consequently, consumers are gradually embracing card-based payments, mainly due to the convenience of electronic payments as well as improving payment infrastructure.

The frequency of card use increased from 26.3 times per card per year in 2015 to 40.9 in 2019, and is anticipated to climb further to 53.7 by 2023. Additionally, the gradual adoption of contactless payments, the emergence of alternative payment solutions, the introduction of digital-only banks, and growth in the e-commerce space mean the Bulgarian payment card market will grow further going forward.

The outbreak of Covid-19 in the country has made both electronic payments and online purchasing more appealing, as both options help consumers avoid close social contact and prevent the spread of the virus.

But a growing number of individuals becoming unemployed will result in declining consumer disposable income, which in turn will push consumer spending down and negatively impact the payments industry.

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Debit cards maintain their dominance

Debit cards are by far the preferred card type for payments, accounting for 78.0% of total card payments by value in 2019.

Reward programmes drive credit card usage

Credit cards are not very popular in Bulgaria, with penetration standing at 18.8 cards per 100 individuals in 2019.
To drive credit card usage, banks offer reward programmes and benefits such as interest-free instalments, fee waivers, and value-added services including cashback and discounts.

Consequently, the credit and charge card market registered strong growth, with CAGRs of 9.7% and 7.4% between 2015 and 2019 in terms of payment transaction volume and value respectively. This trend is anticipated to continue.

Alternative payment solutions on the rise

Despite being far behind most European countries, the Bulgarian e-commerce market registered a robust 2015-2019
CAGR of 18.3%, rising from BGN572.0m ($328.34m) in 2015 to $643.49m in 2019 due to growing internet and smartphone penetration as well as the rising number of online shoppers in the country.

Prepaid card penetration grows

Bulgaria’s prepaid card market registered significant growth, with the number of cards recording a 2015-2019 CAGR of
27.6%. Rising demand for prepaid cards among the unbanked population, students, online shoppers, and travellers supported this growth.