Cash Machine Country: Why is ATM Business so Profitable in Croatia?

Lauren Simmonds

As Novac/Dora Koretic writes on the 2nd of July, 2019, there’s nobody in Croatia who hasn’t been slightly irritated that Croatia has become known as ”ATM country” over recent days. Owing to that, many are calling for a boycott of the owners of the spaces these ugly cash machines are placed in. Dubrovnik being one of the loudest.

Residents’ protests are being organised, liberal capitalists are being cursed, mayors and other people from city administrations are being called on, and the dreaded cash machines are wanted out of Croatia’s many historical town and city centres.

Far from defending this proverbial plague that has seen many residents of Croatia’s top tourist destinations rise up on their feet, but it is unbelievable that virtually nobody is asking the fundamental question: why is this all happening here in Croatia, and not over in Germany or Sweden? Just how and why has Croatia managed to gain the title of ”ATM country” ahead of the far more developed countries of Western Europe?

The answer, like almost everything in life, is right in front of our noses. Jutarnji List published a story on the latest publicly available statistics from the Croatian National Bank (HNB), the one for 2017, and found numbers and data that are very ”plastic” in explaining the general flood of ATMs into Croatia.

Simply put, Croatia is a country in which business entities continue to insist on “cash”, the vast majority of them don’t allow the banks and all of their modern devices, such as POS machines, to enter their premises where they sell their goods or services. Croatia just loves cash, and with that came a window of opportunity for the cash machine world.

According to the statistics of the Croatian National Bank, which were published in June last year, only 32,003 business entities were registered in Croatia in 2017 which provided a POS payment option, while 118,621 POS devices were available in the country, according to the central bank’s data.

This figure seemed a bit too small for Novac, and they sent an additional query to the Croatian National Bank asking them to explain whether they included in this number of the 32,000 aforementioned business entities in hospitality, and they quickly sent back a verified answer, pointing out that the above figure applies to all businesses, regardless of what kind of business they’re engaged in.

To make things worse, all companies, including very large ones such as Konzum, Lidl, Kaufland, Tommy, and others, are included in this surprisingly small number, which means that a good part of the total of 118,000 POS devices are on self-service appliances in stores.

Additionally, the figure is incredible when compared to the total number of active business entities operating in Croatia.

According to the Financial Agency’s data, 158,060 active business entities were recorded in Croatia in 2018, which means, if we divide this number with the above-mentioned POS device statistics, that the POS payment option today is offered to customers by only every fifth business entity, which is a rather small figure indeed.

Given that consumers in Croatia actually have a narrower number of entities in which services can be paid for by card, it’s no surprise that there is a shocking comparison between the cash rate in relation to credit card payment and various other types of card payments.

While most of Croatia is arguing about ATMs and where they’re placed, Novac asked several leaders of restaurant and hospitality associations to explain just why Croatia seems to hate card payments, especially given the fact that everyone who travels outside the country knows that in most European cities and towns, cards are frequently used to pay in cafes and bars, and in some countries it’s even considered to be a little weird to have customers attempting to pay for things with large banknotes.

Franz Letica, chairman of a hospitality association in Zagreb, responded, pointing out the fact that today, every high quality hospitality facility in Croatia is obliged to receive card payments as well as notes, and that he has doubts about the accuracy of the numbers and data collected from the Croatian National Bank. Others agree with him.

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