Albanian Prime Minister Edi Rama won a fourth term in May, and one of his promises was to bring the country into the European Union by 2030.
In mid-July, he announced another important plan with the same deadline: "We have the ambition that by the end of this decade Albania will become a completely cashless society, which means that all operations and financial transactions will be completely digital", he told representatives of start-ups and the technology sector.
The necessary tools for a cashless Albania are in place: "I believe that if we manage to properly outline the roadmap for the future, this goal is fully achievable and will free the country from the heavy burden of outdated practices and inefficiencies that weigh on everyday life," Rama said. All this sounds very simple and clear. But is it so?
"I prefer cash"
Mimoza A., a 62-year-old resident of Tirana, says she uses a bank card only when she withdraws her salary from the ATM near her apartment.
"It is not common for people of my generation to use a card to pay for groceries or at the hairdresser. I prefer cash and for me it will always be like that," she tells DW. Mimosa is not an isolated case: most Albanians feel the same way.
Cashless society in Albania - is it just a dream?
When Albania freed itself from the shackles of communist dictatorship 35 years ago, it did not have a modern banking and financial system. After the transition to democracy, progress was also slow, with ATMs only being introduced in 2004.
Arben Malaj, former Minister of Finance and Economy from 1997 to 2005 and now a senior financial expert and lecturer, believes that populism is the driving force behind Edi Rama's ambitions. According to Malaj, there are a number of obstacles to the transition to a cashless economy in the next five years. "The shadow share of the economy, especially in the agricultural sector, which accounts for a large part of the country's GDP, is impressive. A large percentage of the population lives in rural areas, and the billions of euros sent by emigrants each year enter Albania through unofficial channels. In addition, Albania's main trading partners - Turkey, Greece and Italy - also have large gray sectors," Malaj told DW.
The expert warns that any reduction in funds will require huge investments in cybersecurity.
Dangerous ambitions?
Cybersecurity experts such as Besmir Semanaj believe that Rama's plan is not only unrealistic, but also dangerous.
He recalls the massive cyberattacks against state institutions in 2024, when the e-Albania system (the government services website) was among the targets, as well as the websites of the Albanian parliament and the Statistical Institute.
Semanaj says that these and other large cyberattacks, such as the one in 2022, clearly show that Albania is not only very vulnerable, but also does not have the necessary protection architecture of this critical infrastructure: "Even the most advanced countries in Europe, such as Sweden or Norway, are reassessing the need to maintain a minimum amount of money in circulation - precisely for security reasons and to be prepared for emergencies or cyberattacks", he tells DW.
"While the most digitalized countries have not completely eliminated offline practices, Albania says it plans to go 100 percent digital in less than ten years - without first building the necessary cyber defense capacity. An economy that is completely dependent on digital systems and has no alternative is an unprotected and at-risk economy and can be completely paralyzed by a virus or a single power outage," warns Semanaj.
"Small and medium-sized enterprises will suffer"
Hazis I. has been working as a manager in the tourism sector for about 40 years. Today, he runs one of the most popular hotels in Tirana, which welcomes tourists from all over the world.
As a rule, foreign tourists pay their bills with bank cards, which is in stark contrast to Albanian hotel guests, who still prefer to pay in cash. This means higher costs for the hotel, as a bank fee is charged for every card payment.
That is why Hazis is not very enthusiastic about Prime Minister Rama's plans for Albania to move to a cashless economy. "I am against it. "We can probably handle tourists who prefer to use a card to pay for their coffee, which costs 1.50 euros. But what about those small businesses that supply us with vegetables or cheese from the farm for our restaurant," he asks.
The hotelier gives the example of watermelons, which he always buys in the summer from a producer who sells them on the corner and who has never used a bank card. "I am absolutely sure that he will never do it. This plan will put small businesses out of business. Even for us, it will be very difficult", Hazis I. tells DW.
Lack of specific goals
"So far, there is no economy in the world with zero cash. And in countries with low levels of financial literacy and lack of digital knowledge, with poor governance and low quality of key public services, such as education, healthcare, cohesion and social solidarity, and where perceived corruption is high, it is impossible to achieve great, sustainable success in the short term", says financial expert Arben Malaj.
The Bank of Albania notes an increase in electronic payments over the past ten years. "Citizens have benefited from lower costs, products tailored to their needs and improved access to payment services, which has resulted in a double-digit increase in the use of electronic payments, reaching 21 electronic payments per capita per year - compared to just two in 2015," said the bank's governor, Gent Seiko.
There is still a long way to go
But despite this development, Albania is still very far from EU standards, where member states report over 300 electronic transactions per capita per year, says Besmir Semanaj.
"E-commerce is limited in Albania," he says. "International platforms like Stripe do not work at all in Albania, and small and medium-sized businesses depend on local banks to offer solutions that are often very expensive to implement. PayPal exists for individuals, but it is not an integrated solution for Albanian businesses. This means that online commerce is limited and blocks Albania's access to global online commerce."
It turns out that although Albanian Prime Minister Edi Rama wants to catch up with Europe and join the EU as soon as possible, Albania clearly has a long way to go before becoming a cashless society. And it may take more than a decade to adapt to this new financial culture.
Author: Elona Elezi