According to a new report, the proliferation of payment cards in circulation nationwide grew 2.08% annually from 2009 to 2013, resulting in a figure of USD 8.5 M 2013. Thanks largely to increased awareness and new technologies such as contactless cards, the average transaction value also increased to USD 85.5 (15th in Europe).

This growth, in part, underpins the strengthening of Bulgaria's economy since the global financial crisis in 2009. In 2013 alone, GDP grew by 0.9% and is projected to rise to 3.0% by 2018. This boost can not only be attributed to the rapid modernisation of payment methods in Bulgaria, but will also greatly benefit the cards and payments industry. A greater volume of card ownership and a higher average transaction value marks the increasing modernisation of consumerism in Bulgaria, from which the economy can benefit greatly.

It must also be noted, however, that this climate does increase the risk of card fraud. Card skimming at ATMs is nothing new, but it stands to reason that the more card users, the greater the attraction for criminals. However, prepaid cards in particular are gaining significant ground and many of them can be created and used online, which could help to protect consumers from physical instances of card fraud. The online sphere is of course also a target for fraudsters who operate phishing scams and hack databases looking to steal card details. Nevertheless, so long as businesses and consumers alike are aware of online identity theft protection techniques, and practice them vigilantly, there's no reason why cybercrime should become any more proportionally widespread.

A Boost to Startups?

The news comes at a time when Sofia's potential and reputation as the "hidden startup champion of Europe" is burgeoning. One primary reason for this is economical; the corporate income tax rate in Bulgaria stands at just 10%, significantly undercutting two of the most desirable startup destinations, London (20%) and Berlin (15%). Additionally, overhead costs tend to be lower than some other European destinations, reducing the risk for startups, which can all too easily go under in the early stages. When the fact that Bulgaria boasts one of the fastest broadband speeds in the world is also considered – faster than the USA in fact – Sofia's potential is clear.

With the foundation for successful new enterprises strengthening in the capital, the higher proliferation of card payments has the probability to complement and support the effort of entrepreneurs by expanding their consumer base. The developments could mean, for instance, a greater revenue potential for ecommerce startups with more Bulgarians being equipped for online shopping. The growth of a business is at least partly dictated by the strength and nature of its captive audience; that is, the greater the ability of Bulgarian consumers to pay with card and online payments, the higher the potential for online businesses. Fortunately, it seems that this is precisely what is happening.

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