Review of local Kyrgyz payment system Elcart

Most people are familiar with the major international payment systems Visa and Mastercard, as almost everyone owns a card from one of these payment systems. Although both are based in the USA and are essentially American companies, over the years, they have integrated into global economy and built such a wide network of partners that cards under their brands are accepted almost everywhere. 

Because of this, these two companies can be called monopolists of the processing market, and this has led to many disputes, including with the governments of various countries and their unions. Since the companies are commercial, services of processing cards incur commission fees from all participants in the financial market. To partially avoid these fees and have more freedom in the domestic market, some countries have developed their local payment systems, such as the MIR system in Russia, UZ CARD in Uzbekistan, and Elo in Brazil. 

Today, we will examine the Kyrgyz payment card system Elcart in more detail and its role in the economy of Kyrgyzstan.

What is Elcart?

Founded in 2006, Elcart payment system aims to reduce Kyrgyzstan's dependence on international payment systems like Visa and Mastercard and provide greater financial freedom to local residents. Thus, Elcart is a payment system that operates only within Kyrgyzstan and performs all the functions that processing systems are responsible for.

For example, these include:

• Issuing cards;
• Transfers;
• Online payments;
• Non-cash transactions.

National payment system is always supported by the state and therefore remains the most popular in the country. In addition, using this payment system provides benefits to bank clients, such as cashbacks and participation in loyalty programs. The service of payment operations within national payment system provides a number of advantages for economy of the country, such as lowering transaction costs, ability to manage one's funds independently, since, as we have already discussed, Visa and Mastercard provide services not for free, but for fees. Not only from cardholders but also from banks and other participants in the financial market. In the EU, the issue of high commission fees and their global leadership, which does not allow other similar companies to compete with them at the international level, is often raised.

Payment of these fees and charges can hinder development of the national economy, especially if its currency is not euro or dollar. Dependence on foreign companies does not develop local businesses, forces to take into account significant restrictions and regulations, which for the country may not be so critical. Moreover, these are centers for innovations. Therefore, creation of a local payment system is always a push for development of fintech and is likely to pay off. Although development of a proper payment system is not easy and is expensive, these investments have high probability to pay off.

At the same time, becoming completely independent on international payment systems in the modern world is impossible, since they are international, they provide integration and interaction of different economies. Elcart cannot be used for payments abroad and only works in the domestic market. And this means that, when planning to travel outside of Kyrgyzstan, paying with an Elcart card is not possible. For such cases, users need to have a card Visa or Mastercard, which are the most widely accepted in the world.

Financial system of Kyrgyzstan

Examining the main payment system of the country, let's touch on also features of its financial structure. Kyrgyzstan, being a former republic of the USSR, has much in common with other CIS countries. The financial system is quite developed; country operates 21 banks that cover all needs of the population. Among them are flagship institutions such as Mbank, Bakai Bank, Optima, and Halyk Bank (in the process changing its naming to O!Bank), which have won authority through technological advancements and quality of services. The presence of Mbank is one of the most demanded in the country and performs most of the vital functions: transfers, payments for utilities, card P2P payments, credit operations. Residents actively use digital services and are not tied to banking branches, as is often the case in Europe. 

Among payment methods in Kyrgyzstan, the most popular are local wallets and payment with bank card Visa (or Elcart), to a lesser extent Mastercard. The country mainly relies on banks or payment systems for payments. High volume of cash operations means that country does not implement to strong AML legislation, which does not allow it to fully integrate with the Western world, due to its shortcomings.

However, Kyrgyzstan is making its own difference. Country is actively developing digital solutions and is also open to cryptocurrency; it has a local crypto license that has already been obtained by 20+ crypto companies. Although at the state level, real questions of its purpose and use are already being raised. The activity of these companies is not clear, and the level of crypto usage in the country is not high as well. Thus, the likelihood of Kyrgyzstan reviewing crypto regulation in the near future is high. But nevertheless, Kyrgyzstan will likely continue fintech innovation.

One of the most successful digital projects in Kyrgyzstan is Megapay application, which also aligns with financial trends of 2025 and combines many functions required by clients. Application allows to pay fines and taxes, buy bus tickets, pay for utilities, and receive more than 700 various services from the government. All this indicates a high level of development in the country, proper client base, and quality of services and applications. 

In terms of the e-commerce market, it is not very large and not very interesting to international businesses. The market is considered small and has many local aspects to consider, including religion. The launch of new websites in the Kyrgyz market — not the easiest task, but the main companies in gaming sector are still trying. There are gaming websites in the country, as well as some platforms. 

In conclusion, Kyrgyzstan is a perspective direction for business and local payment system Elcart is an integral part and instrument of its development. Before launching a new product on this market, you need to study payment methods and preferences of clients. And here professionals from Monoup can help. We conduct a proper analysis in practically any country in the world and can provide support by connecting indispensable local payment methods for a successful launch. A unique payment structure of Kyrgyzstan requires careful study, along with careful marketing planning.