Vice President of the National Bank Ekaterine Galdava reported plans to create a national payment system that would be independent from international providers like VISA and Mastercard.
On March 27th, during a meeting with the European Integration and Sector Economy and Economic Policy committees, the founder of the fintech company Keerz and majority deputy Vako Turnava asked the National Bank representative to explain the advantages of open banking to the public.
“To be honest, since I came [to the National Bank], for the past year, I’ve been trying to better understand open banking and why it doesn’t work as it should. Sometimes, I try to blame to the fact that it’s decentralized and not centralized and isn’t endorsed by the National Bank. Sometimes Natia [National Bank President Natia Turnava], the board, and I discuss what can be done to make open banking more centralized. It’s now in the hands of banking associations,” Galdava responded.
But Vako Turnava noted that Georgia was losing money due to intermediaries:
“I just saw the latest statistics, and VISA and Mastercard are taking millions of lari through commissions. The question is if introducing open banking will cause this money to leave the country, but it’s the opposite–it will be circulating in our economy.”
Ekaterine Galdava stated that the National Bank is already working on a Switch national card processor project. Along with open banking, it will allegedly reduce VISA and Mastercard’s leverage on transactions using lari.
“The Switch project will take at least a year. It isn’t a simple project. We’re trying to somewhat reduce our dependence on business using credit cards. We believe that our mentality and the population need to gain a more competent understanding of account ownership; they need to understand that using their accounts will be safer, and we don’t have to have cards everywhere,” Galdava stated.
She added that the national payment system will allow Georgia to strengthen its economic independence.
Preparing for Sanctions?
Experts say that parliament’s conversation on reducing VISA and Mastercard’s effect might indicate that the ruling party is preparing for Western sanctions. In the event that citizens’ international payment systems are disconnected, they’ll be denied access to them.
“The fact that the National Bank and several deputies are talking about VISA and Mastercard taking a lot of money from Georgia serves one purpose: to prepare you for the expected financial sanctions,” stated the founder of business platform freebusiness.ge and economist Giorgi Chugoshvili.
One of the main risks is Georgia being disconnected from the SWIFT system. It’s an association of financial institutions founded in 1973 with headquarters in Belgium. Banks use the system for exchanging payments between counties. It replaces other communication channels and helps transmit confidential messages with information about money transfers. Currently, the system is made up of 11,000 financial institutions in over 200 countries around the world.
According to Giorgi Chugoshvili, the following scenarios can be expected if SWIFT is disconnected in Georgia:
- Restricted access to all international payment systems
- Establishment of a Georgian card payment system
- Creation of a National Bank child company for local processing (to conduct money transfers only in lari)
- Inability to pay for services like Amazon, Netflix, Spotify, etc., using these hypothetical Georgian cards
“Before or after this, visa-free travel for Georgia in the European Union will be cancelled. And in the very end, we might find ourselves in a ruined economy with private cards and in line for a visa,” Chugoshvili said.
New Opportunities or Limitations
The National Bank of Georgia immediately tried to curb talks about the government’s plans to limit VISA and Mastercard power, calling it misinformation. The institution explained that together with the World Bank, it was working on a project to install an instant payment system that could be available to business representatives and the public in the second half of 2026.
“These systems work without using cards and have the ability to offer the end user a way to pay, similar to a card, but in some cases with more advantages, such as having lower transaction fees and immediate access to transferred funds.”
At the same time, the company assured that they aren’t going to take international cards from anyone.
“We would like to clarify that the aforementioned non-card and traditional card (VISA, Master Card, American Express) paying systems will operate parallel in Georgia, and in leading countries, to create more competition in the payment sector and provide consumers with a greater range in options,” a statement said.
Georgian Dream deputy Bako Turnava noted that creating open banking, considered in the context of national payment processing systems, is one of Georgia’s requirements for EU entry.
Open Banking is the system through which banks and financial institutions provide access to their data and infrastructure to third-party services through secure software interfaces. It allows third parties like financial applications or startups to create new products and services for users, automate personal finance management, offer loans, and simplify payment processes.
What It Was Like in Russia
Georgian expert communities are skeptical of the National Bank’s attempts to justify its plans. Economist Giorgi Chugoshvili notes that there were similar processes in Russia ahead of extensive Western sanctions.
“The government and Central Bank of Russia started to move to a local card system after 2014 and the annexation of Crimea. Even then, they were fully aware of what they were planning to do in Ukraine, and they understood that inevitable sanctions would follow. That’s why they were prepared.
The decision to build the internal payment system Mir in Moscow came in 2015 after the annexation of Crimea amid the introduction of restrictions on Russian banks.
In 2022, after the start of the full-scale war in Ukraine, VISA and Mastercard payment systems announced they were terminating service in Russia. Methods like Apple Pay and Google Pay also stopped working, and bank cards issued by Russian banks stopped being accepted abroad.
