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Businessmen accuse the Bank of Georgia of monopolizing the instant payment market

By Keti Arjevanidze
Friday, April 19
Instant payment companies addressed Prime Minister Bidzina Ivanishvili, the Cabinet and the Chairman of Parliament Davit Usupashvili on April 17th. According to Joni Takniashvili, the manager of the Nova Technology fast payment machines, every day more than 60,000 people use around 10,000 payment machines throughout Georgia.

Takniashvili said that the National Bank of Georgia (NBG) supervises the activity of the payment terminals based on the Law on the Tax System and Tax Services. Takniashvili stressed that these companies create jobs and pay taxes and that instant payment terminals provide services and comfort to residents of all regions of Georgia.

According to Takniashvili, beginning on April 1st mobile operators began shifting the cost of services on to consumers. Takniashvili cited the "unfair" decisions of mobile operators and the Bank of Georgia as the reason.

"This decision was made to save them from bankruptcy." Takniashvili explained, adding that in case of bankruptcy, a lot of people will lose their jobs.

Takniashvili stated that the Bank of Georgia is expanding its operations into the instant payment market and is trying to monopolize it.

Businessman also criticized the "Metro-money" system between the Bank of Georgia and the Tbilisi Transport Company. Tbilisi residents can top up their travel cards only on Bank of Georgia terminals.

Lawyer Akaki Chargeishvili said in many countries laws prohibit banks launching non-banking businesses and laws should regulate the system in order to avoid market monopolization. "As a result of not having such restrictions several financial institutions are taking advantage of other companies’ bankruptcy and using dishonest means to gain control of various companies.” the lawyer said.

Iesente company head Mikheil Chonishvili said that businessmen are ready to launch a healthy business competition initiative. He hoped that this will lead to positive outcomes for companies and consumers. Chonishvili added that an artificially created situation does not give a chance for alternative companies to exist on the market.

Irakli Gilauri, General Director of Bank of Georgia, responded to the complaints by describing them as "absurd". Gilauri stated that he is more interested in consumers’ assessments than in "the opinion of two companies."

The Bank of Georgia General Director stated that his company's aim is to offer consumers the best service. He specified that while there is a 0% charge on Bank of Georgia machines, other similar pay boxes charge 4% per lari. Gilauri also explained that bank entered the instant payment business in compliance with the rules of competition.

He concluded that Express Pay business is profitable and admitted that the bank looks at overall profits, but not the profit from a particular product.

Gilauri added that the Bank of Georgia won the contract for Metro Money through a bidding process.