🇺🇦 Payments in Ukraine and the Caucasus

Five markets with no reason to look alike

The region covered here comprises five sovereign states: Ukraine, Moldova, Georgia, Armenia, and Azerbaijan. Each issues its own currency and answers to its own central bank. There is no common currency and no shared payment rail, so the stretch from Moldova to the Caspian is not a single market. Ukraine has the region’s densest card market, with 148.7 million cards issued at the end of 2025 and 95.5% of card transactions made without cash (National Bank of Ukraine, 2025). Azerbaijan moved its retail payments to an instant rail in just a few years, while Georgia still had no interbank retail instant rail in summer 2026. What holds for one of these markets does not hold for its neighbor, even when the two share a border.

Three traits are common to all five markets. The central bank is almost always the technical operator of the national system, not just its regulator, so access to the national rail is negotiated with a public authority. Remittances from the diaspora weigh heavily in the balance of payments, amounting to several points of GDP. The third trait is sanctions compliance. When a US or EU list adds an intermediary operator, the corridor closes for every provider that uses it, even though the receiving country has not changed its law.

Ukraine: SEP carries everything, PROSTIR carries nothing

SEP (Systema Elektronnykh Platezhiv) is the National Bank of Ukraine’s real-time gross settlement system, in operation since 1993. It handles about 99% of interbank payments in hryvnia. This RTGS also carries retail traffic. Payroll transfers and customer payments go through it, whereas European architectures route them through a separate bulk clearing system. Ukraine has no separate retail clearing house for a provider to connect to, so interbank hryvnia payments all use the same system, whatever their size.

SEP-4.0, the current generation, has run since April 1, 2023. It operates 24/7/365 on ISO 20022 messaging. The migration was carried out in the middle of the war. It has two practical consequences for a provider connecting to the system. The expected messages belong to the pacs family. And the daily cutoff is gone: an order submitted at night or on a public holiday no longer waits for the next business opening.

PROSTIR is Ukraine’s national card scheme, run directly by the NBU since 2004. It is accepted at almost every terminal in the country, but issuance remains marginal. As of January 1, 2026, the NBU counted 214,000 active PROSTIR cards out of 65.4 million in the country, or about 0.3% of the total. Visa held 53.6% of cards issued and Mastercard 46.0% on the same date. The two international schemes thus split nearly all Ukrainian issuance between them.

Ukraine: PrivatBank, monobank, NovaPay

Ukrainian retail payments run through three domestic channels. Two are banking apps, Privat24 and monobank. The third, NovaPay, is a payment institution that grew out of a logistics company. No international scheme wallet plays a comparable role. The three acceptance flows differ, and a merchant integration built for one channel does not cover the other two.

Privat24 is the online bank of PrivatBank, the country’s largest banking network, nationalized in December 2016. It carries mass-market traffic, from card-to-card transfers to bills, utilities, and mobile top-ups. It also takes instructions by SMS. That channel needs no internet connection, which matters in a country prone to network outages. The volume flowing through Privat24 exceeds that of monobank and NovaPay combined.

monobank is a mobile-only bank without a banking license of its own. It operates under the license of АТ “Універсал Банк” (Universal Bank), which holds NBU license no. 92 of January 20, 1994. The legal counterparty to any contract with monobank is therefore Universal Bank, and counterparty risk is assessed on that institution. The app’s built-in fundraising jars are the country’s main vehicle for collecting donations. More than 1.6 million people give through them every month, for a cumulative total of UAH 100 billion (monobank, monobank.ua, accessed August 2026).

NovaPay is the payment institution of the NOVA group, which owns the logistics company Nova Poshta. It is registered with the NBU as a payment service provider under license no. 21/770-рк of April 28, 2023. It received foreign exchange license no. 58 on May 1, 2023. It claims 2.5 million transactions a day, 3,600 service points, and 22.7% of Ukraine’s money transfer market, based on NBU data. Its model ties settlement to parcel delivery: payment is collected at the pickup point rather than when the order is placed.

Ukraine: accepting payments under martial law

National Bank of Ukraine Resolution no. 18 of February 24, 2022 is the core text governing the banking system under martial law. It fixed the exchange rate, suspended some foreign currency transactions, and restricted withdrawals. Its provisions have been eased in successive rounds since then but never repealed. Repatriating funds from Ukraine therefore still falls under this regime in 2026, and its currency controls apply to outbound flows.

Two limits come up again and again in Ukrainian acceptance projects. P2P transfers from a Ukrainian bank’s foreign currency card to a foreign card are capped at the equivalent of UAH 100,000 per month. Direct international P2P from a hryvnia card is not allowed: the NBU reserves it for foreign currency accounts. These limits have changed several times since 2022. The one that applies is the limit in force on the transaction date, not the one noted when the contract was negotiated.

The second risk is physical rather than regulatory. Strikes on the power grid cause long blackouts that cut power to terminals, ATMs, and telecom links. The industry’s response is the Power Banking network, set up in December 2022 at the NBU’s initiative. It brings systemically important banks together around branches equipped with generators, backup communication channels, and larger cash supplies.

Ukraine: the legal framework and the European course

Ukraine’s Law “On Payment Services” (no. 1591-IX) brings the logic of PSD2 to a country outside the EU. It opens the market to nonbank providers and creates the account information and payment initiation categories. Its chapter on account access took effect on August 1, 2025, together with the NBU’s open banking regulation.

Account-servicing providers must expose standardized APIs to licensed third parties. They were given a five-month compliance window, until January 2026, to adapt their systems. The AIS and PIS categories map directly onto their EU counterparts. Licensing, however, is the NBU’s alone. The EU passport does not extend to Ukraine, and a license obtained in Vilnius or Dublin grants no right to operate there.

SEPA membership is the next step. The government approved the alignment bills on December 17, 2025, ahead of their passage through parliament. The Ministry of Finance estimates the expected savings at €70 million to €100 million a year on cross-border euro transfers. It puts the gain at about €4,000 a year for an SME that exports regularly (Ukrainian Ministry of Finance, December 2025). The savings would come from replacing correspondent banking fees with intra-European transfer pricing.

SEPA membership covers euro transfers and leaves domestic rails in place. Moldova still runs SAPI for the leu. The system has two components: SDBTR for real-time gross settlement and SCDBN for deferred net clearing. Its national instant rail, MIA, has been run by the central bank since 2024 and executes payments in ten seconds or less. The limit is MDL 5,000 per transaction, and use is free up to MDL 10,000 a month. More than 15 providers are connected, including nonbank institutions (BNM, 2026).

Georgia: a solid foundation with one missing link

The GPSS (Georgian Payment and Settlement System) combines the National Bank of Georgia’s RTGS with the central securities depository. Its first version dates from 2001, built with support from the International Monetary Fund and USAID, and it was overhauled in 2009. The central bank is both operator and participant, alongside the Treasury, commercial banks, and microbanks. Its availability exceeded 99.9% every year from 2019 to 2025 (National Bank of Georgia). The weaknesses of Georgia’s setup described below concern retail payments, not this settlement layer.

The system has been modernized on a Montran platform. The new Automated Transfer System went live on June 3, 2026, with ISO 20022 messaging and 24/7 processing (Montran / National Bank of Georgia, 2026). The overhaul covers interbank settlement. A retail instant rail is outside its scope, and Georgia had none on that date. One is due to go live by the end of 2026, built by the same vendor with a proxy addressing solution.

That gap shapes Georgian retail payments, which rely on cards and on banks’ proprietary apps. Banking super apps play a bigger role there than in neighboring countries that have an instant rail, because they carry the person-to-person transfers such a rail would handle elsewhere. The banking market is highly concentrated. Bank of Georgia and TBC Bank together held 76.6% of banking assets in the first eight months of 2025, down from 77.9% a year earlier (National Bank of Georgia, via Georgia Today, 2025).

Georgian Card and United Financial Corporation, both registered with the central bank as payment system operators, process most card transactions. Two in-house processing centers complete the picture, at Liberty Bank and Cartu Bank; Liberty Bank also sells its services to third parties. An issuer or acquirer entering the Georgian market therefore goes through one of these four processors. Georgia has no domestic card scheme, so integration is limited to the international schemes and the chosen processor.

Georgia launched open banking ahead of several EU member states. On May 1, 2023, the National Bank of Georgia (NBG) approved a revised regulation on the registration and supervision of payment service providers. It creates account information and payment initiation services. It also lets nonbank entities, previously excluded, register for these activities. The scope of mandatory APIs goes beyond the PSD2 baseline, even though Georgia is not bound by EU law.

Azerbaijan: instant payments by decree, acceptance lagging behind

The Central Bank of Azerbaijan (CBAR) runs the entire national payment stack itself. AZIPS, the SWIFT-based RTGS, has operated since February 16, 2001, and has migrated to ISO 20022. LVPCSS, XÖHKS in Azerbaijani, has cleared low-value payments since 2002, while CISMS, live since July 11, 2008, centralizes biller data. The GPP (Government Payment Portal) has collected taxes, fees, and budget payments since 2012. The central bank owns and operates all of these components, with no private operator in between.

The IPS / AÖS (Ani Ödənişlər Sistemi) instant rail went live on October 1, 2020. It stems from the state program to expand digital payments, approved by presidential decree on September 26, 2018. It handles P2P, C2B via static or dynamic QR codes, and payments to government bodies. It includes a request-to-pay module. More than a thousand services are reachable through the GPP. The limit is AZN 40,000 per transaction, excluding budget payments (CBAR).

Since April 1, 2016, card payments have been processed domestically by the ICC (Interbank Card Center), set up to bring home traffic previously routed abroad. Two processors share the market. Azericard LLC holds the first payment system operator license issued by the central bank, no. ÖSO-001 of September 12, 2024. MilliKart LLC, set up by the CBAR in 2006, was licensed later. An acquiring integration in Baku therefore goes through one of these two processors.

Armenia: ArCa at the center, two wallets facing it

ArCa (Armenian Card) is Armenia’s national card payment switch. The country’s commercial banks set it up in 2001 together with the Central Bank of Armenia. Armenian Card CJSC operates it. It does more than a domestic scheme: this deferred net settlement system also processes local transactions on Visa, Mastercard, American Express, and Diners Club cards. Any card transaction made locally therefore goes through this switch, whatever network the card belongs to.

Armenian Card has recently added two new layers. The first, ArCa Pay, makes instant transfers between customers of Armenian banks and settlement organizations using only the payee’s phone number. Work began in 2023, and Ameriabank, Evocabank, and Converse Bank were among the first to connect. ArcaQR launched on September 30, 2025. Customers scan a QR code in their banking app and pay straight from their account, bypassing the card.

The operator’s selling point is price. An ArCa Pay transfer costs banks and settlement organizations much less than a card-to-card transfer, and the saving is expected to reach end prices. Six institutions were among ArcaQR’s first members: Ameriabank, Ardshinbank, AraratBank, Armeconombank, Evocabank, and Converse Bank. Both services shift in-person payments from card to account, a trend already seen in markets with an instant rail and phone-number addressing.

Alongside ArCa, two ecosystems of wallets and self-service kiosks dominate bill payment. Idram, backed by Idram Bank, is the oldest and most widely used, with more than 300 services payable from the wallet (Idram). Telcell Wallet is run by a payment organization supervised by the Central Bank of Armenia and claims more than 900,000 users (Telcell, 2026). Its offering goes beyond the wallet. It includes digital Visa cards, PartPay installment payments, QR transit tickets, and merchant acceptance through Telcell Business.

Migrant remittances: the corridor that closed

Personal remittances received are the funds a country receives from its nationals living abroad, a line item the World Bank tracks in the balance of payments. They amounted to 11.87% of Georgia’s GDP and 10.53% of Moldova’s GDP in 2024, or $4.06 billion and $1.92 billion respectively (World Bank, 2024). Ukraine received $12 billion that year, about 6.29% of its GDP. These flows pay for the everyday consumption of recipient households. They move mainly through specialized money transfer operators rather than conventional banking rails, so their continuity depends on those operators’ status.

The decline from 2023 to 2024 affects the whole region. Armenia fell from 6.40% to 4.92% of GDP, Georgia from 13.65% to 11.87%, and Azerbaijan from 2.64% to 1.82% (World Bank). The 2022–2023 peak was largely driven by flows from Russia, fueled by relocations and by payments routed through the Caucasus. The successive closing of the channels that carried those flows explains the drop. None of them has reopened since.

Compliance risk lies with the intermediary operator, not the receiving country. A remittance corridor to Armenia or Georgia can be compliant one quarter and blocked the next, without the receiving country changing anything in its law. The variable is whether an intermediary operator has been added to a US or EU list. Counterparty monitoring is therefore done operator by operator: clearance at the country level says nothing about whether a given channel is actually available.