Together with the banking sector, the National Bank of Serbia (NBS) has facilitated the use of the exceptionally current NBS IPS QR code for online payments, which ensures additional cost efficiency, but also maximum security and fast execution of payment transactions
“Governor Jorgovanka Tabaković has placed e-commerce high on the list of priorities which is why the National Bank of Serbia is an important participant in this process and has made a very significant contribution by creating an extremely favourable and stimulating regulatory framework to remove all administrative barriers and simplify the purchase process by enabling the use of efficient online payment instruments,” says Dragana Stanić, Vice-Governor at the National Bank of Serbia, about e-commerce in Serbia.
What do you think how will e-commerce develop in the future in our country and the rest of the world, especially after the situation caused by the COVID-19 pandemic? What are the trends and transformations that await us?
E-commerce has been growing strongly year-on-year, as evidenced by the fact that in the first quarter of 2020, the number of transactions related to online purchase of goods and services increased by 48.13% compared to the first quarter of 2019.
We are especially pleased with the fact that domestic retailers have achieved significant growth in online sales (an 80% growth in the number of online transactions relative to the first quarter of last year, and in 2019, the number of transactions made on domestic sites was as much as 146.78% higher compared to 2018).
This trend in the growth of online commerce is the result of joint activities of businesses and the state in the field of development and popularization of the digital way of doing business and directing activities to virtual environments to increase business efficiency.
In addition to the development of national payment instruments, the National Bank of Serbia has adopted two very important regulations that eliminate obstacles to the growth and development of e-commerce, namely the Law on Interbank Fees, which significantly reduced commercial fees for accepting payment cards at online points of sale which caused the growth of the online acceptance network. In just two years, the online acceptance network in Serbia has grown by 77%.
Another important regulation that opened the door to boosting virtual economic activity and the development of digital banking is the decree regulating the verification of the identity of a natural person using electronic means of communication, which created the conditions for establishing a business relationship with a financial institution via the Internet.
All the above activities that we carried out before the onset of the COVID-19 pandemic, gained in importance during the state of emergency in terms of relatively easy adaptation of our virtual vendors to the new situation.
What is Serbia’s current position in terms of the development of e-commerce services compared to the global market?
We have a growing number of consumers who are not only skilled in using digital technologies, but they are also demanding in this regard. Retailers must adapt their business strategies, as well as expand and improve their services to keep pace with rapidly evolving needs. Every generation is looking for more efficient and faster solutions to fulfil their wishes, which online purchase of products and services certainly is, considering it saves time and is simple.
Our e-commerce market has been recording significant growth, as aforementioned. The number of virtual shopping outlets increased by 36.60% at the end of the first quarter of 2020, which in absolute numbers stands at IQ – 1,228 virtual outlets compared to 899 at the end of the first quarter of 2019.
The National Bank of Serbia has introduced instant payment by scanning the QR code. Can you give us a brief overview of the instant payment project in the Republic of Serbia? What exactly does instant payment at a point of sale entail?
The IPS NBS system is the first instant payment system in the Balkans. We are proud of the fact that the implementation of this system has positioned the Republic of Serbia in a small group of the most developed countries that have such a system and in the group of leaders in terms of implementing instant payment at the point of sale.
In late February 2020, again in collaboration with the banking sector, the National Bank of Serbia facilitated the use of the NBS IPS QR code at points of sale through mobile banking applications, and the Governor officially launched this payment instrument at one of our largest retail chains.
It is important to underline that this is an NBS IPS QR code and not just a QR code, because consumers may think that any QR code allows this type of payment, which is not true. For the purposes of payment, the NBS IPS QR code is standardized and prescribed by the National Bank of Serbia’s decree.
The NBS IPS QR code is a standardized two-dimensional bar code with a predefined set of data for making payments at physical points of sale, as well as for online payments and invoice payments. This NBS IPS QR code is unique in our market and unequivocally designates that an instant payment is made through the IPS payment system of the National Bank of Serbia.
For that reason, and in order to make this new payment instrument recognizable to the public and to encourage its use, but also to make it easier to understand which QR code is used for payment, we have branded the service in cooperation with banks and are insisting on using the real name of this payment instrument. This also makes it easy for users to immediately recognize the point of sale that allows payment by NBS IPS QR code which is marked with a sticker bearing the abbreviation “IPS”, while the point of payment bears a sticker that gives information to the customer which IPS payment method they can use – IPS Scan or IPS Show.
The advantages of paying with the NBS IPS QR code at the online point of sale lie in the fact that the customer, by simply scanning this code which is displayed on the retailers’ website and choosing the IPS Scan payment method after completing the order, downloads all the data necessary to execute the payment transaction in two clicks, i.e. makes the payment without the need for additional data entry. The payment security is an important element in this online payment method, considering that the customer does not leave any information on the retailers’ website, unlike when using payment cards, but the entire payment process is managed by the customer via their mobile device.
In the first quarter of 2020, the number of transactions related to the online purchase of goods and services increased by 48.13% compared to the first quarter of 2019
How much do people in our country use the option of paying via a mobile phone, i.e. via mobile banking applications?
In the first quarter of 2020, relative to the same period of the previous year, the number of executed transactions using mobile banking increased by 25.62%, while the number of executed transactions using e-banking increased by 0.5%.
If we look only at transactions initiated by individuals, the number of transactions performed using mobile banking in the same period increased by 24.45%, while the number of transactions performed by individuals using e-banking decreased by 1.66%.
In transactions initiated by legal entities and small businesses, using mobile banking, the number of transactions increased by 35.7%, or by 0.94% when observing the number of transactions performed by legal entities and small businesses using e-banking.
Advantages of using NBS IPS QR code at points of sale
The costs of accepting instant payments are significantly lower for retailers than the costs of accepting payment card. This means that the National Bank of Serbia, thanks to its extremely favourable tariff policy, has created prerequisites for banks to offer this service to retailers at significantly lower fees than online payment acceptance fees.
We believe that the aforementioned advantages of using the NBS IPS QR code are sufficiently stimulating that even small shops, which do not accept payment cards at their online points of sale, can use this innovative, but also more cost-effective payment method which is of great importance for further development of e-commerce in Serbia.