Azerbaijan accelerates digital breakthrough Instant payments, QR codes, and financial innovation

The expansion of cashless payment infrastructure in recent years has enabled Azerbaijan to make significant progress in the digitalisation of banking services and the payments ecosystem. Under the “Financial Sector Development Strategy for 2024–2026,” adopted nearly two years ago, the country’s banking sector is implementing transparent digital services and developing an open banking platform.

The prospects for the development of a cashless digital economy, artificial intelligence, cybersecurity, and a new payment ecosystem based on FinTech solutions were highlighted at the two-day 9th International Banking Forum (IBF 2025), which opened on November 19 in Baku under the theme “Reliable, Safe, and Sustainable Banking.”

The Central Bank of Azerbaijan (CBA) has introduced a new strategy aimed at expanding financial accessibility, broadening the coverage of sectoral services, diversifying financial instruments, and enhancing supervision and network risk management. Its primary goal, however, is to accelerate the digitalisation of the financial market and liberalise the national payment system, creating a favourable environment for both market participants and consumers.

A key focus of the strategy is the use of alternative monetary and credit instruments, including the implementation of an open banking platform. This initiative will enable wider adoption of FinTech solutions and provide access to various international payment systems through new digital platforms and tools.

In addition to digitalising the operational environment, the strategy seeks to strengthen corporate governance standards and incorporate environmental, social, and corporate governance (ESG) principles, ensuring a modern, sustainable, and resilient financial ecosystem in Azerbaijan.

The prospects for implementing Open Banking solutions in Azerbaijan and further digitalising the operational environment of the financial sector have become a central theme at IBF 2025, held on 19–20 November. The forum is organised in cooperation with the Central Bank of Azerbaijan, the Azerbaijan Banks Association (ABA), Mastercard, and the Center for Analysis of Economic Reforms and Communications (CAERC).

The event will cover a range of topics, including “How Artificial Intelligence (AI) is Transforming Global Banking,” “How Local Banks Are Shaping the Next Wave of Growth,” “The Evolution of Risk and Regulation,” “Smart Banking: AI Agents in Action,” and “Open Banking — A New Stage in the Financial Ecosystem,” among others.

“Data-driven management, digital ecosystems, the transition from open banking to an open financial space, real-time settlements, and the adoption of artificial intelligence are setting new standards in the banking sector,” said Vusal Gasimli, Executive Director of CAERC, speaking at the IBF 2025 forum. “The new banking model is no longer built solely on providing services; it is also shaped by data-driven management, AI-based risk forecasting, and the implementation of advanced regulatory standards.”

According to him, AI and big data now open up new opportunities for assessing credit, liquidity, market, and operational risks, while the integration of IT technologies enables the creation of more resilient and reliable systems. In this way, an ecosystem approach, collaboration with FinTech companies, and flexible regulation have become key conditions for the sustainable development of the banking sector.

Moreover, Gasimli believes that Azerbaijan’s banking sector is experiencing a period in which digital transformation is accompanied by growing security threats: consumer behaviour is changing, technologies are accelerating, and risks are becoming increasingly complex. Therefore, a key challenge for the domestic banking sector remains balancing innovation with security to ensure the transition to resilient and reliable systems.

A similar point was made by Vusal Khalilov, Deputy Chairman of the CBA: “Several banks in Azerbaijan have already connected to payments via open banking. These services are available through mobile applications and primarily cover account and transaction information.” Among other initiatives, the AzQr standard for universal QR payments is currently in the approval stage. According to Khalilov, this standard will simplify the acceptance of cashless payments both in regional areas and in the capital, while also reducing transaction costs. Overall, this transition aims to significantly lower expenses not only for financial institutions but also for entrepreneurs.

Overall, in line with the Central Bank of Azerbaijan’s (CBA) strategy roadmap, banks are steadily integrating into the Open Banking system. This includes implementing advanced technological solutions and transitioning to risk-oriented supervision.

In this context, the Deputy Chairman of the CBA highlighted that financial institutions are actively adapting to cybersecurity regulations, while legislative improvements are being introduced to strengthen security in response to emerging challenges across the banking and financial sector.

“To digitalise the financial sector, it is essential to continue reforms, and first and foremost, to make more effective use of the Instant Payments System, one of the central components of the digital payments ecosystem,” said Zakir Nuriyev, President of the Azerbaijan Banks Association (ABA), who attended IBF 2025. “This includes attracting new payment systems, using QR codes as an alternative payment method, introducing innovative payment tools and technologies, and placing special emphasis on the expansion of NFC technology.”

He stressed that maintaining the growth of digital payments via payment cards is crucial, particularly in light of upcoming legislative requirements for card-to-card operations. To continue these reforms, amendments to the “Law on Payment Services and Payment Systems” will be necessary, along with restrictions on transactions conducted within closed networks.

Another important regional trend is exploring a sandbox regime in collaboration with neighbouring countries, including Türkiye and Georgia. According to Nuriyev, this approach could deepen regional integration, taking inspiration from successful experiences in Singapore and Malaysia.

The adoption of best practices in digitalisation and the implementation of AI solutions in the banking sector are among the key priorities for financial development, according to Alpaslan Çakar, Chairman of the Board of Directors of the Banks Association of Türkiye, who spoke at the International Banking Forum.

“In Türkiye, digitalisation and AI have become essential components of development. We understand that in the coming period, data will be the main ‘fuel’ of the banking sector, while artificial intelligence will be its engine. The distinction between banks will depend on how safely, efficiently, and seamlessly they use these technologies to create real value for customers,” Çakar emphasised.

In this regard, the intensification of bilateral contacts between Azerbaijani and Polish banking institutions is seen as highly promising by another IBF 2025 participant, Wlodzimierz Kicinski, Executive Vice President of the Polish Banks Association.

“We believe that Azerbaijani banks are modern, highly active, and play an important role in boosting investment in the national economy. This largely aligns with the objectives of the Polish Banks Association and Polish banks, which share many common positions with your country’s financial sector. We are confident that cooperation between our associations will be fruitful and has a bright future,” Kicinski emphasised.

He added that one of the most promising areas of cooperation is the payment system, including providing Azerbaijani banks access to an interesting tool — the Banking Technology Forum, a consortium of leading technology companies offering innovative solutions for the banking sector.