In Albania, payments for goods and services are still predominantly made in cash, causing the circulation of money to remain uncontrolled, its source untraceable, and enabling the avoidance of tax obligations.

“The market economy in Albania was thus born as a cash economy—without rules, without a banking system, without proper procedures—and whoever started doing business did it in cash. It created a model where business is done with physical money, as it avoids tax obligations. A regular economy helps us all understand the real power,” said to the media Spiro Brumbulli, Secretary of the Association of Banks.

Outside the banking sector, 4.4 billion euros are currently in circulation—an amount that has doubled in a decade, or is three times higher than in the 2000s.

Brumbulli says it is necessary to limit cash payments for citizens, as is already the case for businesses.

“We have a ceiling for cash payments only for businesses, set at 150,000 lek, while Greece, North Macedonia, and Hungary have already implemented such ceilings. We don’t have one. So, an individual can buy out an entire boutique and no one will ask where they got the cash. If we were to impose a limit, say 50,000 lek as the maximum allowed for cash purchases, and require the rest to go through banks, we would start forcing society and transactions to become more disciplined,” says Brumbulli.

Beyond limiting cash payments for citizens—a measure the Ministry of Finance has already begun working on—Brumbulli says legal changes are also needed to compel businesses to accept card payments.

“Every business unit should be required to offer a payment option other than cash. They should not raise prices for card payments, as we have received such reports,” says Brumbulli.

However, the financial education of citizens also plays a crucial role. Not every payment should require going to the bank.

“After 20 years, major changes have occurred. We now have 1,000 ATMs, 25,000 POS devices, and offer payment services for taxes, levies, social contributions, electricity, and water—without needing to visit the bank,” says Brumbulli.

Instant payment, a method of electronic fund transfer, will also play an important role in reducing physical cash.

“We aim to reach at least 50%—meaning that 50% of all financial transactions take place through the banking system, without cash. If these measures are implemented as we propose, it is possible to achieve this within 3 to 4 years. That is, if 'instant payment' becomes operational within the next year,” he claims.

At the end of June, the Bank of Albania reported that cash in circulation reached 4 billion and 420 million euros, up from 3 billion and 953 million euros in June of the previous year.

This high cash flow has numerous costs for the economy, as it increases the space for informality, makes it harder to fight money laundering, and makes it nearly impossible to verify the origin of the generated income.