Croatia New Hit Destination for Financial Startups in Europe?

Lauren Simmonds

As Poslovni Dnevnik/Bernard Ivezic writes on the 18th of July, 2019, it appears that Croatia is a new top destination for financial startups in Europe, and naturally, everyone is wondering why.

After the Nordic startup Auka made the global premiere of its Settle mobile payment application from Zagreb, and Apple Pay immediately arrived in Croatia with its expansion across Europe, now a young, high tech Romanian company called Pago, has started testing its financial application (app) of the same name, right here in Croatia.

Moreover, after a successful launch in Romania, Pago decided that its application would first be alpha-tested in Croatia, alongside the biggest market in Eastern Europe – Poland. The word ”Alpha” in this sense means that the application is not yet completely functional or completely translated into Croatian. Antonija Bilić Arar, Pago’s manager for Croatia, told Poslovni Dnevnik that the new mobile application will be officially presented shortly. Probably in September.

Despite that, users in Croatia can already download the application if they so wish, regardless of the fact that it can’t yet be used in full, and Pago has briefly explained that it is because of the size and development of the market, and has revealed the figures that no other player on that same market has yet wanted to comment on.

“About four billion euros per year are spent on utilities, rent, food, entertainment and other similar activities in Croatia, of which sixty percent of all payments are made in cash and only 25 percent are done by bank transfer, all indicating huge potential for easy payment solutions like Pago,” stated Bilić Arar.

These figures further clarified the finances, stating that according to the internal research of one of the two largest card holders in the world, Croatia, with regard to payment transactions, has one of the most underdeveloped markets in the whole of Eastern Europe. And while it’s bad for beginners who want to break through here, this is a great opportunity.

Antonija Bilić Arar says that in Romania, when it comes to paiyng for rent, food, entertainment and other activities, people spend nine billion euros yearly. In the largest regional market, that of Poland, only 21 percent of transactions are done in cash.

“In Romania, however, the situation is similar to that in Croatia, where a large number of payments, as much as 75 percent of them, are done with cash and only 15 percent are done by bank transfer, and over there in Romania, Pago already has more than 100,000 users per month, more than 200 suppliers in the system, and there are more than 5,500 accounts paid via Pago daily,” said Aric Bilić.

Pago has not commented on what kind of appetite Croatia has for it, but the founder and chief executive of Auke, Daniel Döderlein, at the global premiere of Settle in Zagreb, said they wouldn’t even enter Croatia’s market without thinking that their results couldn’t beat those of the current market leader, KEKS Pay.

On the Croatian market, a number of domestic and foreign players have begun to catch up. The aforementioned KEKS Pay from Erste Bank went one step farther and can now boast of more than 40,000 users. The second largest mobile bank in Europe has also entered the Croatian market, Revolut, which already has more than 20,000 users here, and they confirmed that Croatia was their most successful soft launch in southern Europe.

Because of all of the competition, PayPal and TransferWise completely opened up their services to users in Croatia last year, Google Pay arrived in Croatia, and Apple Pay has now also arrived. In addition, Corvus Pay, the company-daughter of the largest Croatian IT company, M SAN Group, has also offered its services.

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