Digital payments and fintech solutions are becoming an integral part of the modern economy, accelerating the transition to cashless transactions and transforming the financial sector. Azerbaijan is experiencing rapid growth in the use of digital payments, development of payment infrastructure, and implementation of advanced technologies such as AI, tokenization, and biometric identification.
Visa plays a key role in these processes, actively collaborating with banks, fintech companies, and government structures to develop the payment ecosystem. In an interview with Report, Nurlan Hajiyev, senior director and Visa country manager in Azerbaijan, discussed current trends in digital payments, Visa's strategic initiatives, the role of artificial intelligence in ensuring transaction security, and plans for developing payment infrastructure in the country.
Report presents the interview:
- What key trends are defining the development of fintech and payment sectors today? What can we expect in 2025?
- One of the main trends is the rapid development of artificial intelligence. Visa became the first payment network to start using AI back in 1993 for risk management and fraud prevention. Over the past ten years, the company has invested $3.3 billion in developing AI technologies and data infrastructure. One of our advanced solutions is Visa Protect - a comprehensive risk management system that uses AI in real-time to minimize fraud at every stage of a transaction. Another important direction is digital identification.
Users increasingly prefer biometric methods of identity verification, such as facial recognition or fingerprints, making payments more convenient and secure. This reduces the need to enter a 16-digit card number, simplifies the authentication process, and minimizes risks. This benefits all parties - both merchants and end users who get a fast and convenient payment tool.
Additionally, real-time payments are gaining popularity. For example, in the US, the Federal Reserve System is implementing a solution based on the internationally recognized financial information exchange standard ISO 20022, which will affect the global payment infrastructure. In Azerbaijan, there is also growing interest in such technologies.
Direct money transfers from account to account deserve special attention. Our AI solutions protect not only card payments but also direct transfers between accounts, increasing the level of security. Another significant trend is embedded finance. More and more non-financial companies, including retailers, are integrating payment services into their platforms to offer customers convenient and fast financial solutions. In Azerbaijan, this trend is also actively developing. There is also growing demand for cross-border payments, which were previously used mainly by large corporations but are now in demand among small, medium, and micro-businesses.
For these purposes, we have solutions such as Visa Direct Account (VDA) - for account-to-account transfers, and B2B Connect - for corporate clients, using general ledger technology. We continue to expand money transfer capabilities, including in Azerbaijan. For example, transfers by phone number allow sending money by simply selecting the recipient's contact, without having to enter a long card number.
Another promising direction is Visa Direct Request to Pay. Although this technology is often associated with a convenient way to split a bill among friends, it is actually particularly useful for small and medium-sized businesses.
For example, a customer can receive a payment request and confirm it only after the service is provided or the goods are delivered, which increases the transparency of settlements.
- How does Visa use artificial intelligence to enhance payment security and combat fraud?
- Artificial intelligence plays a key role in preventing fraudulent transactions. In 2023 alone, Visa's AI systems helped block fraudulent transactions worth $40 billion. In 2024, as part of Visa Protect, we launched three innovative technologies. One of them is account-to-account payment protection. Using artificial intelligence, the system evaluates the risk probability for each transaction, regardless of whether the payment is made by card or through a bank transfer.
This allows financial institutions to prevent fraud by blocking suspicious transactions before they occur. Another important solution is Visa Deep Authorization. It helps identify suspicious payments made without physical use of a card, such as online purchases or smartphone payments at points of sale. Also, last year we expanded the capabilities of Visa Risk Manager and Visa Advanced Authorization. Now these tools cover all types of card payments, regardless of the platform used, providing comprehensive protection.
Cybersource deserves special mention as one of the best solutions for protecting e-commerce from fraud. This AI-based system analyzes a wide range of data, learns in real time, and constantly improves fraud prevention methods. The more data it processes, the more effective the protection becomes, that is, the method of fraud prevention.
- What measures is Visa taking to strengthen cybersecurity and protect customers from fraud? Are there discussions with banks and partners on this issue, given the increased cases of fraud and money theft from cards of Azerbaijani users?
- We actively engage with banks and partners, helping them implement advanced solutions to protect payment data. We regularly conduct educational sessions and risk forums where the latest trends in cybersecurity and fraud prevention tools are discussed. Among the key solutions that are already successfully used in several Azerbaijani banks and ready for scaling, we can again highlight Visa Advanced Authorization and Visa Risk Manager – tools for risk assessment and transaction scoring, Visa Deep Authorization – a solution for enhanced payment authentication, especially in online transactions, Visa Protect – a comprehensive platform covering the entire payment process and preventing fraudulent operations before they occur.
One of the most effective protection mechanisms remains tokenization – it not only simplifies the payment process but also significantly reduces the risks of card data compromise. Thanks to Visa Token Service, payment details are replaced with a digital token that cannot be used outside a specific transaction. For e-commerce payment security, we are developing Visa Click to Pay – a solution that allows customers to make purchases without entering a PIN code or CVV, using biometrics or other authentication methods. This makes online payments as secure as transactions at physical points of sale. Visa continues to improve cybersecurity measures so that customers can confidently use digital payment solutions without fear of fraud.
- What are Visa's strategic priorities in Azerbaijan for 2025? Are there plans to expand the cashless payment ecosystem, including in the transport sector?
- In the transport sector, we have already achieved significant success. In 2021, together with the International Bank of Azerbaijan, we implemented a payment solution for Azerbaijan Railways. Now passengers can pay for travel by card at all stations on the Baku-Sumgait route. In 2022, we introduced one of the most advanced technologies for public transport in Azerbaijan – Mobility & Transit Transaction (MTT). This system allows combining all trips throughout the day and charging them as a single transaction.
Additionally, MTT supports tokenized payments, which is especially important given their growing popularity. Overall, our strategy in Azerbaijan is focused on developing innovative payment solutions that make payments faster, more convenient, and safer. We strive for long-term cooperation with key financial market participants – banks, fintech companies, government structures, and retail chains – to expand the digital payment ecosystem.
- Are there plans to expand the use of payment cards in Azerbaijan's public transport beyond the Baku-Sumgait route? Are projects being considered to implement such solutions in the metro, buses, and other types of transport?
- We are open to cooperation with all interested parties and ready to provide advanced technologies for modernizing transport payment systems. Today, we are already implementing similar projects in different countries around the world, and their number is in the hundreds, if not thousands. Visa's experience covers various transport solutions – from metro and buses to trams and ferries. We are ready to share this experience and participate in the development of digital payments in Azerbaijan's public transport.
- What new projects has Visa implemented in Azerbaijan in 2024? What results can already be noted?
- One of the key projects this year was the launch of the "Tələbə Plus" student card in partnership with Kapital Bank and the Education Development Fund under the Ministry of Science and Education of Azerbaijan. The number of users of this card is already approaching 200,000, and demand continues to grow.
Today, there are hundreds of locations throughout the country where "Tələbə Plus" cardholders receive privileges – discounts on clothing, education, products, services, as well as benefits when visiting cultural sites, museums, and exhibition halls. This is the first such product in the Azerbaijani market. Special mention should be made of our cooperation with the National Olympic Committee.
Last year, Visa supported young athletes at the local level, and in the lead-up to the Olympics in Paris, introduced new solutions and products. Speaking of card products, we recently introduced the Visa Infinite Miles card in partnership with Kapital Bank, which allows users to accumulate miles. Co-branded cards were also launched in partnership with the International Bank of Azerbaijan and Azerbaijan Airlines (AZAL). I am proud of these initiatives, especially when I see, for example, our judoka Hidayat Heydarov representing one of the projects on the skin of a partner bank. Another important milestone is the development of digital payment technologies.
Azerbaijan has made significant progress in this area: tokenization, Tap to Phone have entered the market, and Apple Pay and Google Pay services have been launched. Currently, 16 banks are using tokenization technology, and eight banks already provide the Tap to Phone service, which turns an Android smartphone with an NFC module into a payment terminal. We continue to expand cooperation with partners and implement innovative solutions. I am confident that this year will bring even more interesting projects.
- What are Visa's key indicators in 2024? Can you share current statistics for the world and Azerbaijan?
- Globally, over the past year, the VisaNet network processed about 300 billion transactions in 160 currencies. Our payment system is capable of processing up to 100,000 transactions per second – one of the most impressive indicators confirming the power and reliability of Visa's infrastructure. In Azerbaijan, the financial market continues to develop rapidly, with digital payments playing a key role. Tokenization was launched in the country in 2019, and since then its popularity has been steadily growing.
In 2024, the number of tokenized transactions in Azerbaijan more than doubled. This indicates that more and more people prefer to pay for purchases with digital cards using smartphones and smartwatches. In addition, our Visa Token Service technology for internet acquiring was implemented by the leading Azerbaijani fintech startup YIĞIM. I am confident that the number of tokenized transactions will continue to grow, as this is a secure, convenient, and fast payment method. The share of tokenized transactions in e-commerce has increased 40 times over the past year, and the number of transactions using payment terminals has more than doubled.
These indicators cover the period from October 2023 to September 2024 and reflect the high demand for digital payment solutions in the country. I would also note that the volume of domestic payments increased 1.2 times. Favorable conditions for growth are created thanks to users' willingness to master new technologies, as well as active support from the banking sector and regulators.
- How is the premium card segment developing in Azerbaijan? What trends and customer preferences do you observe?
Premium cardholders have high demands for service quality, and Visa strives to meet their expectations. Transfer service is one of the most sought-after services among premium cardholders. Initially, we launched this service in Baku, providing customers with the opportunity to comfortably travel to and from the airport. Then, after studying the preferences of our premium customers, we expanded the geography of transfers.
Today, Visa cardholders can use this service not only in Baku, but also in Antalya, Alanya, Istanbul, Abu Dhabi and Dubai. In addition to transfers, we offer customers a wide range of privileges: access to business lounges in more than 1,200 airports worldwide, free internet roaming for convenient communication while traveling, Fast Line – expedited passport and pre-flight control both in Azerbaijan and abroad, Commercial Important Person (CIP) service – the ability to check in for a flight, drop off luggage and wait for departure in a separate lounge. Furthermore, premium cardholders receive exclusive discounts and bonuses, premium service and programs like Visa Luxury Hotels.
For example, in Azerbaijan, there is free coffee at the Costa Coffee chain, as well as promotions, such as a recent joint initiative with Ali & Nino, where customers could receive a free book. Discounts are also provided at retail and service establishments.
We constantly improve our programs, taking into account customer preferences. For instance, the Fast Line service in Baku now includes free passage for a child under 12 years old – another step towards increasing the comfort of our customers. Visa continues to develop the premium segment, offering new privileges and convenient services for travel and everyday life.