ASTANA—Kazakhstan’s fintech sector is thriving, with the number of fintech startups growing from around 50 in 2018 to 200 in 2024, according to the July report on the fintech market.
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The report, prepared by RISE Research, the National Payment Corporation of Kazakhstan, Mastercard, and Tarlan Payments, highlights the rapid growth and development of the fintech sector in Kazakhstan.
Banks play a crucial role in this effort, particularly fueled by the absence of legacy banking systems, allowing for rapid technological transformation. Major banks are making substantial investments in payment infrastructure, enhancing service efficiency and reliability.
Proactive collaboration between banks and government e-systems is integrating various services, furthering digital transformation. Multiple public services are now available for Kazakh citizens via banking apps, including access to digital documents, renewing driving licenses, transferring car ownership, registering businesses, paying taxes, registering a marriage, and obtaining a birth certificate, amongst other government services.
Booming digital financial services
Rising consumer demand for digital financial services, including mobile banking and e-wallets, is propelling the market forward. Analysts indicate an increase in online banking usage, as well as all fintech-related services and products.
In 2023, the number of active online banking users reached 23.1 million.
“Between 2019 and 2023, active online banking users in Kazakhstan increased 4.6 times due to technological improvements, regulatory support, high demand, market competition, and greater internet and cashless payment adoption,” reads the report.
Online banking usage benefits from high levels of banking penetration, internet penetration, and the share of cashless payments.
As of 2021, 81% of the country’s population had access to banking services, including a bank account. At least 92% had internet access as of 2024, and 89% of all transactions are conducted through digital means.
Cashless transactions on the rise
Cashless transactions have seen a tremendous rise in Kazakhstan over the years. This is a result of a combined effort by the government, financial institutions, and a tech-savvy population that embraces the convenience and security of digital payments.
According to the National Bank of Kazakhstan, as of June 1, there were 77.4 million payment cards in circulation. In May 2024, the volume of transactions using payment cards reached 15.4 trillion tenge (US$32.5 billion), with 1.1 billion transactions.
At the same time, compared to the same period of 2023, the number of non-cash transactions increased by 13.3% to reach 1.1 billion transactions, with the volume hitting 13.3 trillion tenge (US$28 billion).
According to the report, Kazakhstan witnessed a triple growth in the number of tokenized transactions, such as via Applе Pay and Google Pay, between 2021 and 2023.
Binur Zhalenov, chairman of the National Payment Corporation of Kazakhstan, said Kazakhstan leads globally in terms of the development of cashless transactions.
“Over the past five years, the number of non-cash transactions has increased more than twenty-fold, now accounting for 89% of retail turnover. Competition drives the market to enhance services and introduce innovations. Transparent game rules and equal access to the Digital Financial Infrastructure, overseen by the National Payment Corporation of Kazakhstan, are fundamental to fostering this competitive environment. We intend to continue supporting and developing innovative solutions to ensure that end consumers benefit from better, more economical, and convenient financial services,” said Zhalenov.
The fintech market projected to grow
The report highlights Kazakhstan’s payment landscape is undergoing a significant transformation driven by several factors, including favorable demographics, growing digital readiness, increased e-commerce, enhanced banking accessibility, and infrastructural advancements such as local payment systems and QR codes.
The youthful, tech-savvy population, with 62% aged between 15 and 64, is increasingly adopting digital payment methods.
E-commerce, which made up 12.7% of total retail trade in 2023, is further propelling the shift towards non-cash payments. According to the Bureau of National Statistics, this is a substantial growth from 1.8% in 2019. Kazakhstan seeks to bring the figure to 20% by 2030.
Overall, analysts forecast all fintech-related markets in Kazakhstan to continue growing, with at least a double-digit compound annual growth rate between 2022 and 2027.
According to the report, fintech has emerged as the foremost investment category in venture capital deals in Kazakhstan. In 2023, it accounted for 40% of all venture capital financing in Kazakhstan.
Sanzhar Zhamalov, Mastercard country manager for Kazakhstan and Central Asia, noted Kazakhstan’s efforts to become a regional leader in fintech development.
“We have observed rapid growth in this sector in recent years: new payment solutions such as tokenized payments, fintech solutions for SMEs [small and medium enteprises], artificial intelligence and Blockchain projects, investment platforms, digital insurance products, and much more are actively developing,” he said.
The report highlights seven main trends shaping the country’s fintech market. Among them are artificial intelligence, the synergy between govtech and fintech synergy, digital products & services for SMEs, buy now, pay later (BNPL), and central bank digital currencies (CBDC).
However, it is imperative for the market players not only to monitor the trends, but keep up with them, said Ainur Zhanturina, founder of RISE Research.
“It is crucial for fintech market players not only to observe current trends but also to actively engage with them, stay ahead, and set the pace in the market. Banks should implement BaaS [banking as a service], collaborate with fintech startups, and integrate govtech and AI tools into their processes,” said Zhanturina.
