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COVID-19 creates opportunities for mass adoption of fintech in Bulgaria - industry

COVID-19 creates opportunities for mass adoption of fintech in Bulgaria - industry Valeri Potapova/

SOFIA (Bulgaria), June 29 (SeeNews) - The coronavirus (COVID-19) outbreak and the economic downturn it triggered gave the fintech sector in Bulgaria a chance to see various opportunities for mass adoption of financial technology in the near future, industry representatives say.

The coronavirus crisis has resulted in a change in consumer behaviour and merchants' needs and this trend, which is expected to become a constant one, has already started to benefit the businesses of players on the local fintech market, representatives of the sector said during Digital Finance Outreach 2020, an online discussion organized by the European Commission and the Bulgarian Fintech Association (BFA) earlier this month. 

"We have seen a huge boom not just in terms of looking at Europe where contactless technology was already well adopted in many countries but also in places which are now trying to accelerate market development and contactless. I think what we had forecasted in terms of contactless adoption over the next two or three years has perhaps been compressed into a matter of months, " said Brad Hyett, CEO of UK-based Phos, which owns contactless payment services company Phos Bulgaria.

There is also this big shift in consumer behaviour, which is really key - consumers are now looking more and more for access to financial services online and that creates an increase in the level of acceptance of technology, Hyett noted. 

"When we are talking about Phos pre-COVID1-19 we are talking about how we were breaking the traditional barriers of business and small and medium-sized enterprises (SMEs) moving from cash to card. [...] I think that when COVID-19 happened a lot of that just went away. Now it is more of a necessity - people need to pay for things, they do not even think twice if they might touch their card to a merchant’s phone."

Merchants, on the other hand, need to take payments face-to-face in a very cost-efficient way, which they were not necessarily looking for before. Now, their new mode of operation - a delivery type of service, requires mobile and connectivity, Phos' CEO explained.

According to Stefan Stankov, chief commercial officer at Varna-based payment solutions provider myPOS, the industry now stands more united on how financial services should be evolving and revolutionized in the near future in order to improve functionality, availability and accessibility for customers.

"I believe that this is the way forward and COVID-19 rather forced us to adopt fintech more and more rapidly. To me, it is a definite opportunity for mass adoption," Stankov opined.

Only a few years ago getting a small business owner to register in an e-money account completely digitally was a rather challenging task and many of the already established players on the market have faced the need to educate the customer on fintech and digital banking, Stankov recalled. Now, because of COVID-19, the change happens somehow naturally. 

"We have used this time to launch new services, new products, to provide our customers with a full range of digital payment opportunities. This is the way we actually succeeded in getting some business on board," said Sergey Pantaleev, general manager at Varengold Bank's Bulgarian branch. 

The representative of the lender, which is active in marketplace banking, believes that through this way of doing business Varengold Bank is able to capture and assess risks in a way that, for certain reasons, conventional players are not accepting.

"You can really capture many opportunities on this market, you can fulfil many needs and most of all, you can really impact fast if needed. If you look at COVID-19 and the marketplaces, they were really fast in addressing the needs of their clients if there was some institutional support at the back," Pantaleev noted.

According to Martin Bogdanov, co-founder and CEO of Paysera Bulgaria, in this situation fintech companies, which have adapted to their business models working digitally, maybe had a better chance to continue operating and they did not lose too much in terms of volumes. This is also a way to show to the traditional financial businesses that if they have underestimated digital transformation so far, now they have to put effort into it with human and financial resources, Bogdanov added. 

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