Prime Minister Edi Rama recently announced an ambitious plan: he wants Albania to become the first country in the world before the end of this decade cash.
Edi Rama, who won his fourth mandate in May, promised the citizens that he would bring the country into the European Union by 2030. In July, he announced another big plan for the same time frame: "We have the ambition that by the end of this decade, Albania will become cashless society, which means that all interactions and financial transactions should be completely digital," he said at a meeting with representatives of startups and the technology and innovation sector called "Albania 2030 - a vision towards European integration", he writes Deutsche Wellee.
"More training and development is needed," he added, stressing that the tools for a cashless Albania already exist. "I believe that if we manage to clearly define the roadmap, this goal is completely achievable and will free the country from the burden of outdated practices and inefficiencies that make daily life difficult," Rama said.
It all sounds simple. But is it really?
"I prefer cash"
In everyday life, 62-year-old Mimoza A. from Tirana says she only uses the card to withdraw her salary from an ATM near her apartment.
"It's not common for people of my generation to use a card to pay in a store or at a hairdresser. I prefer cash and I will always use it," she told DW.
Mimoza is not alone in this attitude – most people in the country think similarly.
Is a cashless society just a dream?
When Albania emerged from communist dictatorship 35 years ago, it lacked a modern banking and financial system. Progress has been slow even after the transition to democracy – ATMs were only introduced in 2004.
Arben Maljaj, former Minister of Finance and Economy (1997–2005), now a financial expert and lecturer, believes that populism is the main driver of Rama's ambition. He lists several key obstacles to achieving a cashless society in the next five years:
"The high rate of the shadow economy, especially in agriculture, which makes up a large part of the gross domestic product (GDP), is much higher than in the rest of the region. A large percentage of the population lives in rural areas. Also, the largest part of the income from the diaspora - billions of euros per year - comes outside official channels. And Albania's main trading partners - Turkey, Greece and Italy - also have a high rate of the shadow economy," Mallaj told DW.
It warns that any reduction in the use of cash would require huge investment in cyber security.
"Dangerous" ambition
Cyber security experts like Besmir Semanaj think Rama's idea is not only unrealistic but also "dangerous". He recalls major cyber attacks on state institutions in 2024, including the e-Albania system, the website of the Parliament and the Bureau of Statistics.
Semanaj says these attacks show how exposed Albania is and that it lacks the necessary infrastructure to protect critical infrastructure.
"Even the most developed countries in Europe, such as Sweden and Norway, are considering the need to keep a minimum amount of cash in circulation - precisely for security and emergency preparedness," he said.
"While the most digitized nations keep 'backup options', Albania plans to become 100 percent digital in less than ten years, without basic cyber protection. An economy that depends exclusively on digital systems, and has no alternative, remains unprotected and vulnerable - a virus or a power outage would completely paralyze it," warns Semanaj.
"Small and medium-sized enterprises will suffer the most"
Hazis I, a tourism manager with 40 years of experience, runs one of the most popular hotels in Tirana. Foreign tourists mostly pay by card, while domestic guests still prefer cash. This increases the hotel's costs, as banks charge fees for every card payment.
Haziz I. is not very optimistic about the Prime Minister's plan.
"I'm against a cashless society. We can deal with tourists who want to pay for a €1,50 coffee with a card. But what should I do with the small producers from whom we buy vegetables or farm cheese for our restaurant," asks Hazis.
"During the summer season, I regularly buy watermelons from the farmer who sells them on the corner. He has never used digital payments and I'm sure he never will. This plan will destroy small entrepreneurs. Even we will have to deal with it," he told DW.
Lack of specific goals
For Arben Maljaj, the goal of Albania becoming cashless by 2030 is not clearly defined, and therefore not measurable. In his opinion, the government could set specific goals only after a detailed analysis of the payment system by institutions, experts and the academic community.
"Currently, there is no 'zero cash' economy. In countries with low levels of financial education, poor digital literacy, poor governance and weak public services - such as education, health and social care - and high corruption rates, it is impossible to achieve sustainable success in the short term," says Mallaj.
The Central Bank of Albania, however, notes the growth of electronic payments in the last ten years.
“Citizens have benefited from lower costs, products tailored to their needs and better access to payment services, which has been reflected in double-digit growth in electronic payments – from two per capita in 2015 to 21 per year,” said Governor Gent Sejko.
On a long stick
For Semanaj, this is still far below the EU standard, where member states have more than 300 digital transactions per capita per year.
“E-commerce is limited (in Albania). Platforms like Stripe do not operate in Albania, and local banks offer expensive and complicated systems. PayPal exists for individuals, but not for businesses. This limits and blocks access to global digital commerce,” he says.
So, although Prime Minister Edi Rama wants Albania to join the EU as soon as possible, it seems that the transition to a cashless society will require more than a decade and a serious transformation of the financial culture.
