Kazakh Central Bank Seeks to Break Lenders’ Grip on Payments

Nariman Gizitdinov
·3 min read

(Bloomberg) -- Kazakhstan’s central bank wants to weaken the hold of the country’s two largest lenders over payments by introducing early next year a new system to facilitate transactions with universal access.

Most Read from Bloomberg

“I told the banks’ chiefs, ‘we must make a system that will be available for all,’” National Bank Governor Timur Suleimenov said in an interview. Two lenders may have built an oligopoly in the Kazakh banking system, controlling 80%-90% of payments, he said, without naming the banks.

The central bank plans to introduce a pilot program for a QR-code-based payment system and extend it to all lenders in the country during the first half of next year, he said. That project may lead to less earnings for some banks, he said.

In 2022, Kazakhstan launched a domestic, interbank card payment system, which featured two services: tenge transfers between individuals and QR-code payments. Under that system, transfers are available for customers at nine of the country’s 21 lenders, but that doesn’t include the two biggest banks.

The banking industry is dominated by the country’s two largest lenders, which in turn currently facilitate the vast majority of payments. Kaspi.kz alone handles about a 70% share of transfers and payments and Halyk Bank about 8%, according to Bloomberg calculations based on data from the lenders and the central bank.

Kaspi.kz serves 14 million monthly users in Kazakhstan, which has a population of 20 million people. Part of its offering is the QR application, “which is the backbone of our proprietary payment network,” Chief Executive Officer Mikheil Lomtadze said during a February conference call. Customers using other banks’ applications can’t pay with Kaspi QR, which the lender says is Kazakhstan’s most widely accepted payments method.

“We will always support steps to make digital payments even more accessible,” Kaspi.kz told Bloomberg News. “In fact, we encourage the National Bank of Kazakhstan to go even further and introduce an open banking platform, which will lead to more competition between payments providers and will make payments and money transfers for consumers and businesses more seamless.”

The lender stressed its application was “popular with consumers” even “with global companies such as Mastercard, Visa, Apple Pay and Google Pay competing against successful local players including Kaspi.kz, Halyk Bank and others.” Halyk Bank didn’t reply to a request for comment.

Kaspi.kz shares were down as much 4% at 10:46 a.m. in New York, while Halyk Bank fell 0.2% at 3:47 p.m. in London.

Read more: Kazakhstan Frets Russian Inflation May Prevent Return to Easing

Meanwhile, a credit boom sweeping Kazakhstan has emerged as a major vulnerability for the $226 billion economy of the world’s biggest uranium miner. The country’s president, Kassym-Jomart Tokayev, said in 2022 that a high credit burden among consumers risks financial instability. Since then, the nation has sought to make banking services, including lending, less expensive for customers.

The central bank has proposed raising to 25% from 20% a tax on income from retail loans to push banks to increase their corporate lending instead, Suleimenov said. The credit burden on individuals is a concern, and “we see the need to differentiate taxes” for corporate and retail loans, he said.

The central bank is considering other measures to stimulate lending to businesses and reduce credit to consumers, Suleimenov said. That includes forcing lenders to keep more reserves, but the bank will wait to see how other regulators’ restrictions work before acting, he said.

If retail lending keeps growing at a pace of 30%-40% a year, the central bank will use its arsenal to stop that, Suleimenov said.

(Updates with share prices of Kaspi.kz and Halyk Bank in ninth paragraph.)

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.