More than 95 percent of card terminals in Hungary support contactless payment, so we can pay almost anywhere with our smart devices. This is also supported by the fact that all merchants must provide electronic payment, of course this does not mean that we can pay by card everywhere, because for example we can settle the total amount of the purchase by bank transfer or now with qvik.
There are many situations in everyday life when we don’t want to carry our wallet with us. For example, it is impractical to carry a wallet or a traditional card with you during sports, but with the help of a smart watch, you can easily and quickly pay for, for example, a refreshing drink. When traveling, it is not only convenient but also safer if we do not have a large amount of cash and payment cards with us. When doing a quick shopping trip, at a concert, festival or other event, it is also beneficial not to have a wallet with you, and in addition, you can spend more time on the activity in question.
The big jump came after Covid
Since 2021, the number of transactions made with payment cards registered in the mobile wallet has been continuously increasing. In the last quarter before the coronavirus epidemic, bank customers used phones for less than 12 million transactions, and by the beginning of 2022, this had quadrupled in two years. In the third quarter of 2024, we paid more than 138 million times this way, which means an increase of more than 11 times in less than four years.
While a little more than 58 million such transactions took place in 2020, until then
- 123.5 million in 2021,
- 261.3 million in 2022,
- 381.6 million in 2023.
The year 2024 will almost certainly surpass the previous record 2023, as the Magyar Nemzeti Bank (MNB) has already registered nearly 368.2 million mobile wallet payments in the first three quarters. Further expansion is expected this year, as more and more people start using these safe and convenient payment solutions.
There is also a clear jump in value, but not continuously, as in the case of volume. At the beginning of 2020, a value of HUF 61.8 billion was associated with the 11.8 million transaction number. In comparison, between July and September of 2024, Hungarians fulfilled nearly HUF 997 billion in obligations with mobile wallets, all of which represents a more than 16-fold increase from 2020 to 2024.
Of course, the European record-setting Hungarian inflation also plays a major role in the increase in the amounts spent, since the population was forced to spend more – as much as their wallets allowed – while the shopping baskets were not as full as before.
Digital is different
By registering in mobile wallets, we can pay with our phone instead of a physical plastic bank card, and at the same acceptance points in Hungary and around the world as with the touch bank card. The technology is similar, NFC communication takes place between the paying party and the merchant’s terminal – previously this could only be the physical card, but today we can also easily settle our bills with mobile phones capable of such communication.
The tech giants Apple and Google almost completely cover the mobile payment solutions of the domestic banking sector. According to the latest statistics of the central bank, there was a significant expansion in this area in 2023:
- Apple Pay is still at 100 percent, available at all banks,
- while Google Pay was able to increase its share from under 60 percent to 90 percent in the Hungarian market.
Apple vs. Google
Apple Pay
- Use of built-in security features such as Face ID, Touch ID and tokenization.
- It does not store bank card details on the device for payments.
- Full ecosystem integration: works perfectly with Apple products, we can use it simultaneously on our iPhone, Apple Watch, iPad and Mac devices.
- Other tickets (such as airline tickets) and cards (such as loyalty cards) can also be stored in Apple Wallet.
- It is available at all domestic banks.
- Compatible with Apple devices only.
- Apple devices are more expensive, so using the system requires a larger one-time investment.
Google Pay
- It works on a wide range of Android devices, including mid-range and low-end phones.
- Only compatible with Android devices.
- It does not store bank card details on the device for payments.
- It can be used with various brands of smartwatches that run Android Wear.
- Easily integrates with your Google account to sync with apps and services (such as the Play Store).
- No need to press a button to pay.
- It is not available at all domestic banks.
Here, it is not worth ignoring unique banking solutions either, as many payment processes can be based on them in the future, even the qvik payments that were launched last September. The popularity of own banking solutions has declined slightly, but the ratio is still close to 80 percent compared to the total balance sheet of banks. At the same time, it is no coincidence that financial institutions also prefer external solutions, since customers who have accounts with several banks can use these ecosystem platforms much more smoothly. By the way, from 2023, the services of Garmin Pay and Xiaomi Pay will also be available in Hungary, there is an increase here as well, but the transaction volume is significantly lower compared to the other solutions.
By the way, mobile convenience services are primarily important for the general public, while the primary target audience of Internet banking interfaces is the corporate sector. All this is not a domestic feature, these are also international trends.
Extra security
When paying with smart devices, an extra layer of protection is added to the transaction process: during a security procedure, real card data is replaced with unique, one-time use codes (i.e. tokens) that are used during payment transactions.
These codes are generated during payment and completely replace the card number, expiration date and security code. Thanks to the procedure, the real card data is not transferred or stored at the seller, which significantly reduces the risk of data theft and misuse.
Do you still need a traditional bank card? Not necessarily
Internet shopping has become more and more popular in recent years, and almost the entire population has seen an increase. The data series of the Central Statistical Office (KSH) reveal that approximately 74 percent of Hungarians have already shopped in an online store. This proportion was only 30 percent ten years ago, but the largest increase can be observed in the data from 2017.
Of course, fraudsters have also noticed this, which is why bank frauds committed online are so common, and fraudsters are constantly coming up with new and new methods. You can and should protect yourself in many ways – we wrote about this in detail in our previous article – one way to do this is to use a virtual bank card, or better known as a web card. This can significantly reduce the risk. The bottom line is that it can only be used for online payments, and in most cases, a separate sub-account is also connected to it, into which we only have to deposit the amount we want to spend online, so if they get hold of our bank details, we don’t have to fear that all our money will disappear , since fraudsters only have access to the fake account. And you don’t have to worry that it will cost more, because card payments are still free, and banks can’t ask for money for transfers between your own accounts either.
It is important to mention here that we can make payment processes even more secure with single-use virtual cards, since their number can be changed after each purchase, so that the money in the account cannot be endangered in the event of data theft.
Source: www.economx.hu
