Mastercard and the Central Bank of Azerbaijan unveil joint study:  “The Next Wave of Digitization in Azerbaijan”

• Mastercard and the Central Bank of Azerbaijan have unveiled a joint study titled “The Next Wave of Digitization in Azerbaijan,” outlining a roadmap for digital transformation in the financial sector.
• During the implementation of the “Cashless Azerbaijan” program (2017–2023), card transactions increased sixfold, while cash withdrawal levels declined from 87% to 43%—clear indicators of the broad adoption of digital payments ¹.
• The volume of card payments by SMEs is expected to double by 2027, driving greater transparency and supporting sustainable economic growth ².
  
  

Baku, February 2026 — Mastercard, in cooperation with the Central Bank of the Republic of Azerbaijan (CBAR), has published “The Next Wave of Digitization in Azerbaijan” research. This comprehensive study explores the role of digital payments in accelerating economic growth, increasing transparency, and strengthening financial inclusion across the country.

The research reviews a decade of progress in Azerbaijan’s digital economy and highlights the next phase of transformation, with a particular focus on empowering small and medium-sized enterprises (SMEs) through digitization. The study is based on a multi-layered research methodology, including two nationwide surveys involving 810 SMEs and 600 cons umers, 18 interviews with partners, six focus groups, mystery shopper exercises, and a global comparative analysis of more than 60 initiatives across 40 countries.

The paper brings together insights on the evolution, current state, and future roadmap of digital transformation in the financial sector. Addressed to policymakers shaping the financial sector framework, financial institutions, SMEs, and industry stakeholders, the findings emphasize how public–private collaboration can unlock new levels of efficiency, resilience, and competitiveness within the national economy.

Rapid growth of digital payments in Azerbaijan

Digital payments play a critical role in modern economies by enabling efficient, secure, and transparent financial transactions. The “Cashless Azerbaijan” initiative, implemented by Mastercard and the Central Bank of Azerbaijan (CBAR) between 2017 and 2023, has made a significant contribution to the development of digital transactions in the country. Over this period, the total value of card transactions increased sixfold, while the share of cash withdrawals declined from 87% to 43%¹.  These trends reflect a fundamental shift in attitudes toward cashless payments driven by government action, the adoption of innovative technologies, and the expansion of digital infrastructure.

SMEs at the center of digital transformation

Building on this momentum, the joint Mastercard–CBAR study highlights small and medium-sized enterprises (SMEs) as the driving force behind the next stage of Azerbaijan’s digital economic development. Although approximately 380,000 SMEs currently contribute more than AZN 17 billion in value added, many still operate predominantly in cash ³. Expanding access to digital tools and payment solutions can help SMEs reach new markets and deepen their economic linkages.

While Azerbaijan has made strong progress, the next major leap lies in further reducing cash usage in retail and SME payments. The Central Bank of Azerbaijan’s Financial Sector Development Strategy for 2024–2026 targets a cashless payment share of over 40% in retail trade, digital channels accounting for more than 90% of customer transfers, and cashless card transactions exceeding 70% of total card transactions—strengthening Azerbaijan’s position among regional digital leaders ⁴. 

Together with CBAR, Mastercard’s vision for the next phase of digital transformation focuses on deeper SME participation, wider acceptance of digital payments, and a seamless transaction experience—ensuring that every transaction contributes to a more transparent, resilient, and sustainable financial system.

Future partnership development

In addition to the insights outlined above, the joint Mastercard–CBAR study puts forward a set of practical recommendations to accelerate the adoption of digitization, including:

• Expanding the acceptance of digital payments among SMEs to simplify day-to-day operations
• Strengthening incentives for digital transactions
• Enhancing financial literacy and building digital trust among SMEs
• Deepening collaboration between government authorities, banks, and fintech companies

About the Mastercard–CBAR partnership

Since the launch of the “Cashless Azerbaijan” program in 2017, Mastercard and the Central Bank of Azerbaijan (CBAR) have become strategic partners in advancing digitization across the country. Together, the organizations have implemented a range of joint initiatives aimed at expanding electronic payments, strengthening cybersecurity, and promoting innovation in the financial sector. This joint study represents the next phase of their collaboration, with a strong focus on sustainable development.

References: 

1. Central Bank of the Republic of Azerbaijan (CBAR), Mastercard Advisors analysis

2. Mastercard Advisors analysis

3. State Statistical Committee of Azerbaijan (SSC)

4. Central Bank of the Republic of Azerbaijan (CBAR)