Giorgi Kepuladze, founder of the NGO Society and Banks, says the proposed reforms to Georgia’s payment services market could create risks for both banks and consumers. The legislative package currently before Parliament would introduce universal cash registers that combine the functions of cash registers and bank terminals, while also capping card payment interchange fees at 0.3%.
According to Kepuladze, the main goal of such reforms should be to improve consumer welfare, but it remains unclear whether lower payment-processing costs for businesses will translate into lower prices for customers. While merchants may benefit from reduced fees, there is no guarantee that the savings will be passed on to consumers.
He also argues that lower interchange fees will reduce banks’ revenues, potentially leading financial institutions to compensate by increasing the cost of other banking services. In addition, banks may have less incentive to maintain rewards programs linked to card payments.
“Consumers currently benefit from cashback offers, reward points, and other loyalty programs funded by card transaction revenues,” Kepuladze said. “If transaction fees are reduced and a universal terminal system is introduced, banks may lose the motivation to continue such programs, leaving many unanswered questions about the overall impact of the reform.”
