Croatia’s payment space showcases both the nation’s rich cultural heritage and its readiness to embrace modern payment technologies. The nation’s digital payment market is projected to surpass a total transaction value of $7 billion in 2025, and businesses that plan to expand into Croatia can benefit from this growth trajectory.

Below, we’ll help businesses think through strategies for the Croatian market by looking at important elements for success, including:

• Incorporating various payment methods
  
• Building customer trust
  
• Strengthening fraud prevention systems
  

The state of the market

Customer behavior in Croatia is a blend of tradition and changing preferences. Reflecting a wider European trend, Croatians are increasingly using digital payment methods. This is most pronounced among younger people. While cash transactions remain common, card payments, especially debit cards, have gained traction. Mobile payments and online banking are also gaining acceptance as the country’s digital infrastructure expands and trust in digital transactions grows.

Croatia’s joining the European Union in 2013 and adopting the euro in 2023 have helped push the country towards EU norms, including regulations that emphasize transparent, traceable transactions. Croatia adheres to the EU’s regulatory framework for payments, including the revised Payment Services Directive (PSD2). This helps maintain a safe, standardized environment for payments service providers and promotes improvement and competition.

The Croatian National Bank (HNB) is the central pillar of the country’s monetary policies and financial stability. The Croatian Financial Services Supervisory Agency (HANFA) oversees the nonbanking financial sector, including capital markets, insurance, and pension funds. Both HNB and HANFA are instrumental in ensuring Croatia’s financial markets adhere to EU standards.

Payment methods

Croatia, which is situated at the crossroads of Central Europe and the Mediterranean, uses numerous payment systems. Here’s a closer look.

Current usage

Although cash payments remain prevalent—accounting for about 64.5% of total payment transaction volume in 2022—preferences are shifting towards digital solutions. According to the European Payments Council, the number of total card-based payments increased by nearly 15% in 2021, amounting to half of all cashless transactions. Debit cards remain more popular than credit cards, with just 30% of the population owning a credit card and 88% owning a debit card in 2021. By the end of that year, a majority of all payment cards issued could be used for contactless payments.

As digital payment solutions continue to rise in popularity in Croatia, mobile payments are playing a key role. The value of mobile point-of-sale (POS) transactions is expected to grow by about 20% annually between 2025 and 2030, until it totals an estimated $11.15 billion. While international platforms like Apple Pay and Google Pay are present in Croatia, local providers are also carving out their niche. One example is Aircash, a digital wallet that facilitates various transactions from peer-to-peer transfers and online payments to cash withdrawals from ATMs.

Popular B2C payment methods in Croatia

• Credit and debit cards (e.g., Zaba)
  
• Digital wallets (e.g., Aircash)
  
• Bank transfers
  

Popular B2B payment methods in Croatia

• Credit cards
  
• Bank transfers (e.g., SEPA)
  
• Wire transfers
  

Emerging trends

Buy now, pay later (BNPL) services are on the rise across Europe, with BNPL payments expected to reach $191.30 billion in 2025. While BNPL services have already gained traction in countries such as the United Kingdom and Sweden, they’re still emerging in Croatia.

Ease and friction of entry

Entering the Croatian market involves particular processes regarding taxes, international payments, and payment security. Here are a few factors to consider.

Taxes

Croatia levies a standard value-added tax (VAT) rate of 25% on most goods and services, which is one of the highest in the EU. While customers pay this tax directly at the point of purchase, businesses must collect and remit it to the government. Proper VAT handling is necessary, as any discrepancies in collection and remittance can create legal issues.

Chargebacks and disputes

Croatia adheres to EU-wide regulations that favor consumer protection. PSD2, a cornerstone of EU payment regulation, requires Strong Customer Authentication (SCA) for most electronic payment transactions. This requirement for enhanced authentication directly impacts chargebacks and dispute resolutions, as demonstrating that stringent authentication was in place can influence the outcome of a claim.

Croatia also enforces strict consumer protection measures that put the burden on businesses to prove the legitimacy of a transaction, particularly in cases of unauthorized or disputed transactions. This means that businesses in Croatia must be prepared to provide substantial evidence to support their claims in chargeback disputes.

International payments

Croatia’s status as a tourist destination means businesses can benefit from accepting international payments, despite the challenges they present. Here’s what to know about accepting these payments.

• Currency conversion
  Many businesses in Croatia access multicurrency features through their merchant accounts. Conversion rates are determined at the POS, and fees typically range from 1%–3% of the transaction amount. These fees can be either passed on to the customer or absorbed by the business, depending on the business model.

• Single Euro Payments Area (SEPA) transfers
  As part of the SEPA zone, Croatian customers and businesses can send cost-effective transfers between the 41 member countries. The SEPA zone makes it faster and easier to send transfers and direct debits within Europe.

• Payment methods from nearby markets
  Accepting payment methods from the surrounding region, such as Italy’s Bancomat cards, can help businesses increase sales among international tourists.

Security and privacy

Croatia’s approach to payment security, compliance, and regulation aligns with EU directives. Croatia keeps payments secure with a focus on data protection, customer authentication, and Anti-Money Laundering (AML) measures.

• Data protection laws
  Like all EU member states, Croatia adheres to the General Data Protection Regulation (GDPR). The GDPR establishes strong standards for safeguarding customers’ data, including obtaining explicit consent for data collection, showing transparency in data handling, and giving individuals the right to request the removal of their data from organizations’ databases. Croatia’s Consumer Protection Act also prohibits businesses from using customers’ personal data for unsolicited calls or texts.

• The role of PSD2
  PSD2 is a key piece of legislation in Croatia’s payment space. It mandates SCA, requiring two-factor authentication for most transactions. This added layer of security aims to reduce fraud and make payments even safer.

• AML initiatives
  Croatia has rigorous regulations for AML and Countering the Financing of Terrorism (CFT), in line with EU directives. Financial institutions in Croatia are obligated to implement AML and CFT measures, including monitoring and reporting suspicious financial activities. Failure to adhere to these regulations can result in severe penalties.

• Governmental oversight
  HANFA is the national regulatory authority that oversees financial markets and institutions. It plays an important part in guaranteeing compliance with regulations related to payment security and AML. The Financial Intelligence Unit of Croatia is responsible for investigating suspicious financial activities.

• Local card networks
  Zaba, Croatia’s local card network, is operated by Zagrebačka banka. This network works with international payment systems like Visa and Mastercard for greater transaction security and offers advanced features such as dynamic security codes.

Key success factors

With a digital payments infrastructure that’s not as developed as that of some European countries, Croatia contends with technological inertia and security risks, among other obstacles. Businesses in Croatia must proactively address these challenges to safeguard their payment operations within the country and across borders. Here’s how to succeed in this market.

• Varied payment options
  Croatians are slowly adopting payment technologies, particularly mobile payments. About 44% used mobile devices or the internet for online purchases in 2021, compared to about 30% in 2017. This means businesses should support a mix of payment methods to serve a range of consumer preferences, including traditional credit and debit cards and contactless cards.

• Local nuances
  Design your website and payment interfaces to reflect the local community by translating them to Croatian. Accept local payment methods like Aircash and Zaba cards to build trust and boost conversion rates.

• Card dispute protocols
  As more payments are made digitally, mitigating disputes and fraudulent transactions through tools such as 3D Secure authentication can help prevent financial and reputational damage to your business. Ensure you have effective dispute resolution systems in place.

• Simplified international transactions
  Transactions beyond the SEPA zone come with their own set of challenges. These include exchange rate fluctuations and overlapping regulations, which can complicate cross-border transactions for both businesses and customers.

Key takeaways

Businesses that operate in Croatia can improve the payment experience by implementing tactics that account for local preferences, regulations, and market dynamics. Here’s a recap, along with specific actions to help your business succeed in this market.

Incorporate various payment methods

• Embrace local payment methods
  While card payments are common, businesses should also consider local options like Aircash to signal their knowledge of the local market and make transactions easier.

• Adapt to mobile payment preferences
  As mobile payments gain popularity in Croatia, businesses should adapt their payment systems to accommodate these preferences. Ensure all payment processes are mobile friendly to provide customers with a convenient, easy payment experience from their smartphones.

• Use SEPA for direct debits
  Businesses with subscription-based models or recurring revenue can benefit from using SEPA-compliant payment gateways.

Build customer trust

• Provide real-time support
  Offer immediate, accessible customer support options such as live chat to help resolve payment issues quickly.

• Simplify refund procedures
  Establish a transparent refund process. A well-defined policy and swift responses to refund requests can help build customer loyalty.

• Accommodate language options
  Given the predominantly Croatian-speaking population, translating payment interfaces to the local language is necessary. Beyond just translation, localize them to create a more relatable and user-friendly experience.

Strengthen fraud prevention systems

• Shield customer data
  Ensure your data protection standards align with GDPR regulations and clearly communicate your data security measures.

• Prevent payment fraud
  Use machine learning fraud detection tools, employ 3D Secure authentication for online transactions, and implement multifactor authentication for customer accounts.

• Remain vigilant
  Stay up-to-date on the latest advancements in payment security and run regular security audits of your payment systems to catch any vulnerabilities.