Kazakhstan is becoming a leader in cashless transactions, fuelled by fierce competition and a supportive regulatory environment.
The number of fintech start-ups in Kazakhstan has quadrupled over the past five years, according to a major new study from RISE Research, in collaboration with the National Payment Corporation of Kazakhstan, Mastercard, and Tarlan Payments.
The study also reveals that the Central Asian country is now a regional leader in digital finance, with the share of non-cash payments reaching 89 per cent in May of this year.
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Indeed, according to Binur Zhalenov, chairman of the National Payment Corporation of Kazakhstan, the country is a global leader in the development of cashless transactions.
“Competition drives the market to enhance services and introduce innovations,” he says. “Transparent ‘game rules’ and equal access to the digital financial Infrastructure, overseen by the National Payment Corporation of Kazakhstan, are fundamental to fostering this competitive environment.
“We intend to continue supporting and developing innovative solutions to ensure that end consumers benefit from better, more economical, and convenient financial services.”
The growth of the fintech industry is bolstered by the advancement of the country’s venture capital sector. Over the past five years, the number of fintech start-ups in Kazakhstan has reached 200, solidifying the country’s position as a leader in attracting venture capital investments.
The industry accounted for 40 per cent of all venture capital financing in Kazakhstan in 2023.
A young, tech-savvy country
The transformation of Kazakhstan’s payment landscape has been driven by several factors: favourable demographics, growing digital readiness, increased e-commerce, improved banking accessibility, infrastructural developments (such as local payment systems and QR codes), the launch of major digital wallets (Apple Pay, Google Pay), and government initiatives.
Kazakhstan has a young population of about 20 million, with a median age of 30 years. According to the World Bank, 62 per cent of its population is aged between 15 and 64. This youthful demographic is more tech-savvy and open to digital payment methods, aiding the adoption of non-cash payments.
The rise of e-commerce in Kazakhstan has also significantly contributed to the growth of non-cash payments. As more people shop online, they prefer digital payment methods. In 2023, e-commerce accounted for 12.6 per cent of all retail trade in Kazakhstan, according to PwC. This growth trend is expected to continue, further driving the digitalisation of payments.
It is the banking sector, however, that remains the main driver of the development of financial and payment technologies in the country. Meanwhile, over the past five years, the number of non-banking fintech start-ups has quadrupled.
More specialised areas have emerged, including crypto exchanges such as ATAIX, eKYC firms including Verigram and Alaqan, AML, anti-fraud, and digital lending, indicating the expansion and deepening of the fintech ecosystem and the growing sophistication of market participants.
“Both international payment systems and local solutions are actively used in this country. This confirms the high level of integration of our market into the global financial ecosystem and the readiness of local players to enter the international arena. I believe fintech companies in Kazakhstan have every chance and opportunity to achieve this,” says Andrey Sedenko, CEO of Tarlan Payments.
The maturity of the Kazakh fintech market is also evidenced by a key trend of recent years: the synergy between traditional banks and startups, including those in fintech, e-commerce, and other sectors.
Staying ahead
In these collaborations, banks act as key partners and investors. The market’s development throughout its history has been accompanied by the active role of regulators. This includes legislative reforms, programs, and strategies, as well as the creation of a digital financial infrastructure, all of which have played a key role in stimulating the growth and development of the fintech sector.
Despite the country’s fintech success, however, now is not the time for Kazakhstan to rest on its laurels, suggests Ainur Zhanturina, founder of RISE Research.
“It is crucial for fintech market players not only to observe current trends but also to actively engage with them, stay ahead, and set the pace in the market,” she says.
“Banks should implement BaaS, collaborate with fintech start-ups, and integrate govtech and AI tools into their processes.”
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