Romania’s payment sector has seen a steady transformation influenced by the country’s position at the crossroads of Central, Eastern, and Southeastern Europe. The change reflects global trends and Romania’s distinct trajectory. Historically reliant on cash transactions, Romania has swiftly shifted toward digital payments, especially in its cities. For example, the Romanian payment market was worth $62.2 billion in 2023 and is projected to grow more than 12% annually through 2028.

Parallel to this growth in electronic transactions, Romania’s membership in the EU has also influenced its financial systems. The adoption of European regulatory standards, such as the revised Payment Services Directive (PSD2), has affected payment service providers and the country’s financial system. This integration has facilitated smoother intra-European transactions, creating more opportunities for businesses and customers.

The Romanian payment sector, with its blend of swift digital adoption and adherence to European standards, presents opportunities and challenges. As the country continues to develop its payment systems, it’s becoming an increasingly relevant player in the broader European and global payment markets. Below, we’ll explain Romania’s payment systems and what businesses need to know about entering its payment market, including:

• Incorporating local payment preferences
  
• Complying with EU regulations
  
• Prioritizing cybersecurity
  

The state of the market

The National Bank of Romania (NBR) directs Romania’s monetary and fiscal policies. The Financial Supervisory Authority, another institution central to Romania’s financial regulations, oversees the insurance, capital market, and private pension sectors. Since Romania joined the EU in 2007, EU directives have also influenced the country’s regulatory stance. Key regulations such as PSD2 shape the payment and fintech environment in Romania.

Payment methods

Though digital payments are increasing, the country still uses a mix of payment methods. Here are the popular payment methods in Romania:

Usage

In Romania, traditional payment methods such as cash and bank transfers coexist with newer methods. Romanian customers still rely on cash for small transactions and in places with limited technological infrastructure. Though cash remains a significant payment method, especially in rural areas and among older generations, there has been a shift among urban populations. After the COVID-19 pandemic started, the share of Romanians who reported using cash dropped from 45% to 21%.

Digital payment solutions are increasing, especially among the younger demographic. The number of debit cards in circulation increased every year from 2010 to 2023 to 1.16 cards per capita, a testament to Romanians’ changing payment preferences.

Contactless payments have seen consistent growth in Romania, influenced by a combination of technological advancement and shifting customer behaviors. The COVID-19 pandemic amplified this trend, with many Romanians seeing the value in touch-free transactions. Before the pandemic, only 50% of Romanians reported using contactless cards; in a few months, that figure rose to 59%.

Mobile payments are redefining how Romanians handle financial transactions. Technological development and changing consumer preferences are central to this transformation. Mobile payment adoption has steadily increased, with almost one-third of respondents saying they paid with a mobile device or smartwatch in 2020.

Popular B2C payment methods in Romania

• Prepaid cards
  
• Cash on delivery
  
• Domestic debit cards
  

Popular B2B payment methods in Romania

• Credit cards
  
• Bank transfers
  

Trends

Technological development has changed customer behaviors in Romania, particularly relating to cash use. Customers are switching from cash for everyday transactions, with advancements such as contactless payments gaining traction and making it easier and quicker for customers to make purchases. Mobile banking, though still in its early stages, has increased in popularity, with many Romanian banks promoting their mobile banking applications to a tech-savvy younger demographic.

Ease and friction of entry

Though Romanian customers in certain areas and among certain demographics continue to rely on cash, the factors of technology, changing consumer preferences, and regulatory nudges have led to a gradual shift away from cash. As Romania’s digital infrastructure expands and as customer habits change, the nation’s relationship with cash could transform more.

Taxes

In Romania, the value-added tax (VAT) rate for most goods and services is 19%. Customers pay this tax when making purchases, while businesses must collect and remit VAT to the government. Both parties should monitor VAT because discrepancies or errors can lead to stringent penalties. Businesses must ensure accurate VAT collection and remittance, and customers must track their receipts and transactions to avoid any potential mistakes.

Chargebacks and disputes

As a member of the EU, Romania complies with PSD2. This regulation emphasizes Strong Customer Authentication (SCA), which affects how chargebacks and disputes work. If a transaction gets a proper SCA verification, businesses can present this as evidence during dispute resolutions. As a result, SCA can minimize fraudulent chargebacks.

Romanian businesses face challenges regarding chargeback timelines and documentation. For one, they might have shorter windows to respond to disputes compared with those of international counterparts. So agility and organization as well as detailed documentation are key. Businesses must maintain comprehensive records of transactions, customer communications, and authorization protocols for reference when disputes arise and must be able to access them quickly.

International payments

Though Romania has distinct payment practices, it does share with global markets traits such as digital payment trends, a balance of local and global card systems, and the influence of mutual trade relationships. Here’s how Romania’s payment market interacts with and adapts to global financial trends:

• Currency conversion: Romania, a member of the EU since 2007, is considering adopting the euro. But for now, the Romanian leu remains the official currency. This dynamic has created the need for efficient currency conversion processes for businesses and customers engaging in cross-border transactions.

• Single Euro Payments Area (SEPA): Romania is part of SEPA, which has regulations that let customers request refunds for direct debit transactions within eight weeks. This provision leaves a broad time frame for customers to raise concerns, which slightly favors customer rights.

• General Data Protection Regulation (GDPR): Though it’s often associated with data privacy, the EU’s GDPR governs payment transactions as well. The GDPR requires businesses to obtain explicit consent before collecting personal data and gives customers the right to access or delete their data. Both directives protect customers’ personal and financial data during transactions.

Security and privacy

Romania enforces local and EU regulations to create a secure, compliant payment environment. Given the increase in digital payment adoption, the country aims to safeguard transactional integrity while providing customers and businesses advanced and protected payment solutions.

• Data protection laws: The National Supervisory Authority for the Processing of Personal Data (ANSPDCP) is an important entity that oversees GDPR compliance in Romania. Noncompliance with the GDPR can result in hefty penalties, which incentivize businesses to prioritize data protection.

• Compliance with PSD2: As a directive, PSD2 facilitates the integration and use of online and mobile payment solutions, subtly reducing the reliance on cash.

• Anti-Money Laundering (AML) rules: Romania abides by EU standards regarding AML rules. Businesses are required to conduct due diligence on their customers, maintain records, and report any suspicious transactions. The National Office for Prevention and Control of Money Laundering analyzes and processes the notifications received to prevent and combat money laundering.

• Role of the national bank: The NBR is the main regulatory authority overseeing financial institutions and payment systems in the country. The authority focuses on keeping the financial system stable, and its guidelines often extend to how payments, including electronic ones, are processed.

Key success factors

Though Romania has a flourishing payment sector, businesses still face challenges. By recognizing these issues and planning how to address them, stakeholders can work through Romania’s financial system more effectively. Here are factors that can enable success:

• Plan for lower rates of adoption: Romania’s transition from cash to digital payments is ongoing but incomplete. Roughly 28% of the population used online banking as of December 2024. This suggests a large segment of the population is still fully reliant on traditional payment methods, which poses challenges for businesses that want to operate entirely digitally.

• Find a balance between local and international payment systems: Romanian customers use international card networks (e.g., Visa, Mastercard) and local card systems. These preferences resemble those of Australian customers, who use global card brands and local systems such as electronic funds transfer at point of sale (EFTPOS).

• Use Romania’s trade allies: Romania’s major trading partners include Germany, Italy, and France. They exchange financial practices and payment methods on top of goods. For instance, Romania’s trade with Germany has led to the adoption of similar B2B payment preferences and an increased use of electronic invoices. These shared payment preferences and methods facilitate a smoother payment process and establish common ground in transactional methodologies between trade partners.

• Closely track regulatory changes: Romania’s integration into the EU means it’s subject to various EU regulations, including those related to payments and financial services. PSD2 has imposed new requirements on payment service providers. Adjusting to these regulations and ensuring compliance has been a challenge for several businesses operating within Romania.

Key takeaways

Romania’s payment market presents businesses with opportunities and challenges. Here’s a recap and tips for entering this market:

Integrate popular local payment methods

• Consider accepting cards and cash on delivery: In Romania, card payments are increasing in popularity, but cash remains a common payment method. Businesses that facilitate card and cash-on-delivery options can cater to a broader range of customers.

• Use payment interfaces in Romanian: Though the Romanian population is familiar with English, offering interfaces in Romanian can resonate more with local users. Localizing the payment experience integrates local customs and preferences into the payment process, leading to an improved user experience.

• Consider the country’s urban-rural divide in internet access: There are infrastructure disparities between Romania’s urban and rural areas, with much higher internet penetration in cities than in some rural zones. Businesses should use payment methods that are versatile enough to serve online shoppers and those who prefer offline or traditional payment methods. Doing so can help these businesses reach a wider portion of the population.

Comply with EU rules

• Adhere to SEPA rules: As a member of the EU, Romania follows SEPA rules in its payments infrastructure. This integration ties Romania’s financial system to other European markets, standardizing euro-denominated bank transfers. The ease in managing cross-border transactions within the euro area creates a sense of financial unity with other EU nations.

• Follow EU rules for payment security: Romania adheres to a set of shared financial and regulatory standards. PSD2, which promotes innovation and payment security, is a cornerstone of Romania’s financial regulations. The country also complies with the GDPR, which regulates data privacy and customer rights.

• Adhere to PSD2: This EU regulation influences Romanian currency conversion practices, promotes transparency, and aims to secure transactions.

Focus on cybersecurity and fraud prevention

• Plan on building out security systems: Romania has been a target for cyber threats. The Global Cybersecurity Index ranks Romania 62nd in cybersecurity, signaling the need for improved infrastructure. Payment systems are prime targets for cybercriminals and face threats such as phishing and malware attacks. This shows the importance of continually updating security protocols.

• Use two-factor authentication: One of the core components of PSD2 is SCA, which mandates two-factor authentication for most online payments. Incorporate this security layer to remain in compliance.

• Consider advanced fraud detection: Many third-party payment providers such as PayU, mobilPay, and Romcard implement advanced security measures such as machine learning algorithms to detect and prevent suspicious activities. These providers go beyond EU requirements.