Hungarian Visa cardholders made purchases totaling USD 865.2 million using their Visa cards in Hungary last year

Hungarian Visa cardholders made purchases totaling USD 865.2 million using their Visa cards in Hungary last year, the company announced Wednesday. Total transactions, including cash withdrawals, reached USD 5.9 billion in 2003, a 39% increase over the previous year. The number of Visa cards in Hungary rose just 6% to 2.2 million, as the market is showing signs of saturation, Visa International vice president Radu P Obreja told reporters. In other statistics, the number of purchase transactions with Visa cards rose 31% to 21.9 million, while the number of ATMs accepting Visa cards was 2650 at the end of the year, 7% higher than a year earlier. A "weak link" in the development of the Hungarian card market is the relatively low number and slow expansion of merchant outlets accepting Visa cards, Obreja said. Hungary had 21,849 Visa-compatible POS terminals at the end of 2003, growing just 4% on the year. Of these, 19,000 were located at retail outlets, compared to 30,000 in the Czech Republic, which has a population roughly equal to that of Hungary. Therefore, card companies and banks need to encourage retailers to accept bank cards, Obreja stressed. Encouraging bank card use is also in the interest of banks, as an estimated 30-40% of emerging economy banks' total costs is related to cash handling, he pointed out. Commenting on Hungary's upcoming EU accession, Obreja said that accession states will move from Visa's CEMEA region to its EU division as of 1 October 2004, following the close of Visa's 2004 fiscal year. Among others, the move will result in new fee structures. Accession countries are already ahead of current EU states in battling bank card fraud, according to Obreja. In accession states, bank card fraud totaled 0.05% of total transactions in Q2 2003, half the rate of current EU member states. Among new products and services that could eventually reach Hungary is "cashback," the disbursement of cash to cardholders at POS terminals when a purchase is made with a Visa Card. The concept, which allows customers to also take out smaller amounts of cash when making a purchase transaction, is currently being tested successfully in the UK and the US, Obreja noted.