By Imran Vilcassim, Chief Commercial Officer of Digital Platforms at BPC
Eastern Europe represents a dynamic and evolving financial landscape characterised by diverse markets at varying stages of digital transformation. From EU member states like Poland, Czechia and Estonia to emerging markets like Serbia, North Macedonia and Albania, the region offers considerable growth opportunities for innovative financial services.
For this analysis, we focus specifically on Bulgaria, Romania and Moldova as they represent distinct stages of financial evolution in Eastern Europe. EU members Bulgaria and Romania are advancing rapidly, with Bulgaria’s “Digital Bulgaria 2025” programme driving economic modernisation through IT adoption and digital skills development. Similarly, Romania’s digital payments market is projected to reach $90.72 billion by 2029. Despite this progress, both still face financial inclusion challenges, with 16% of Bulgarians and 24% of Romanians still unbanked. Moldova, with over 35% of adults outside the formal banking system, exemplifies the more pronounced challenges facing developing European nations.
These three countries collectively host over 914,000 SMEs (338,000 in Bulgaria, 520,000 in Romania and 56,000 in Moldova) that form the backbone of their economies. Despite their economic importance, many of these businesses still operate in cash-dominated environments, limiting their growth potential and financial resilience. Their experiences provide valuable insights into both the challenges and opportunities facing the broader Eastern European region.
A progressive shift through technology adoption
While Eastern Europe has historically been slow to adopt new financial technologies in comparison to its counterparts in Western Europe, recent years have shown a remarkable acceleration. The COVID-19 pandemic served as a catalyst, dramatically accelerating the shift toward digital payments and contactless transactions.
Digital payments infrastructure across Eastern Europe reveals significant room for growth when compared to the vibrant SME sector. In Bulgaria, there are approximately 149,000 Point of Sale (POS) terminals serving a market of 338,000 SMEs, meaning many businesses lack access to traditional payment acceptance tools. Similarly, Romania’s 260,000 POS terminals serve over 520,000 SMEs, highlighting a substantial infrastructure gap. This shortfall represents both a challenge and an opportunity, as evidenced by Romania’s rapidly growing deployment of approximately 25,000 Software Point of Sale (SoftPOS) solutions. These next-generation payment technologies are gaining traction precisely because they can quickly bridge the infrastructure gap, allowing Eastern European markets to accelerate digital payment adoption without waiting for traditional terminal deployment to catch up with business demand.
Governments across Eastern Europe are increasingly recognising the importance of digital financial inclusion and are taking decisive steps to promote adoption. Bulgaria amended its Payment Services Act in September 2023, mandating free basic bank accounts for citizens receiving wages, pensions or social benefits, while also requiring large employers with over 100 employees to pay salaries via bank transfer. Moldova launched its Instant Payment System “MIA” in March 2024, enabling real-time transfers 24/7, a significant upgrade to the country’s payment infrastructure.
Romania has implemented a “cash-back” law and POS mandate requiring merchants to offer card payment options. The government has set ambitious targets of 90% financial inclusion by 2025 and views digital payments as a critical tool for reducing the shadow economy. Similar initiatives are being implemented across other Eastern European nations, creating a supportive regulatory environment for digital finance innovation.
New revenue streams through next-generation acquiring
With mobile penetration reaching saturation levels across Eastern Europe, Android is fast becoming the de facto operating system for retail devices and the dedicated Mobile Point of Sale (mPOS) segment is growing. Unlike yesterday’s “card-reader machines,” modern mPOS comes with roomy colour touch-screens, cloud connectivity and hooks into inventory and loyalty data. Across Eastern Europe mPOS payments transaction volumes are projected to reach a total of $447.81 billion by 2030, highlighting a 17.6% annual growth rate from 2025 onwards.
For banks operating in Eastern Europe, the evolving payment landscape represents an unprecedented opportunity. Traditional revenue streams are under pressure from increased competition and regulatory changes, making the merchant acquiring space an attractive avenue for growth. Next-generation acquiring solutions, particularly SoftPOS and mPOS technologies, offer banks the ability to expand their merchant networks while dramatically reducing the cost and complexity of deployment.
SoftPOS technology represents a revolutionary approach to merchant acquiring by transforming standard smartphones and tablets into fully functional payment acceptance devices. Unlike traditional POS terminals that require significant hardware investment, SoftPOS solutions leverage devices that merchants already own, requiring only a simple app download. The technology uses the built-in NFC capabilities of modern smartphones to accept contactless card payments directly on the device. This dramatically reduces the entry barriers for smaller merchants who previously found traditional POS terminals prohibitively expensive.
Driving financial inclusion through innovation
The true power of next-generation acquiring solutions lies in their ability to bring previously excluded merchant segments into the formal financial system. Small vendors, rural businesses and mobile service providers without prohibitive upfront costs. This inclusive approach creates a virtuous cycle. As more merchants accept digital payments, consumers have a greater incentive to use banking services, which in turn encourages more merchants to accept digital payments.
In practical terms, a small shop owner in rural Romania who previously operated exclusively in cash can now accept card payments through their existing smartphone. This not only increases their sales potential by catering to card-preferring tourists and younger consumers but also creates a digital financial footprint that can later facilitate access to credit and other financial services. Similarly, in Bulgaria, a family-run restaurant can leverage Digital Bulgaria initiatives to implement QR code payments and digital ordering systems, allowing them to streamline operations during the busy tourist season while building the transaction history needed for business expansion loans. Meanwhile, in Moldova, where digital adoption is still emerging, a local grocery store might begin with more basic solutions like mobile money transfers, representing their first step away from cash dependence.
While SoftPOS turns standard smartphones into payment terminals, mPOS solutions offer a more robust alternative for merchants needing enhanced functionality. Unlike pure software solutions, mPOS systems typically combine a compact Android-powered device with integrated hardware features such as barcode scanners and receipt printers. This creates a versatile, self-contained payment terminal that remains significantly more affordable and flexible than traditional POS systems.
Market vendors, small retailers or staff managing customer queues can transform their operations with mPOS devices that combine payment processing and essential business tools in one portable system. These versatile solutions offer dual benefits, practical business functionality alongside relationship building services that foster merchant loyalty.
On the practical side, merchants gain powerful capabilities including real-time inventory tracking with automated alerts, flexible payment options spanning traditional cash to digital wallets, streamlined onboarding that reduces setup from days to hours and support for the region’s growing QR payment ecosystem. Complementing these operational features, value-added services enhance the merchant experience through instant technical support via in-app chat, seamless integration with popular digital wallets including Apple Pay and Google Pay, comprehensive loyalty programme management tools and automated compliance functions that simplify tax calculations and regulatory reporting.
These comprehensive capabilities transform what would otherwise be simple payment terminals into complete business management systems. For Eastern European merchants, particularly those transitioning from cash-only operations, this integrated approach provides an accessible entry point to the digital economy without requiring multiple separate systems or significant technical expertise.
The future of merchant acquiring in Eastern Europe
Eastern Europe represents a diverse and dynamic region with enormous potential for digital financial services growth. From EU members like Poland, Czechia, Slovakia and the Baltic states to emerging markets in the Balkans, the entire region is undergoing a significant digital transformation. While countries are at different stages of this journey, all are moving toward greater financial inclusion and modernised payment infrastructures with the SoftPOS market in Europe projected to reach revenue of $320.8 million by 2030, a 24.3% compound annual growth rate from 2025 to 2030.
As Eastern European economies continue their digital transformation, we can expect accelerated adoption of next-generation acquiring solutions. The combination of government initiatives and innovative technology will likely drive substantial growth in digital payment acceptance across the region.
For financial institutions, the imperative is clear. Embrace next-generation acquiring solutions now to utilise SME vast market potential and capture market share. Banks that offer merchants simple, cost-effective solutions for accepting payments will be well-positioned to build lasting relationships with Eastern Europe’s vibrant SME sector, a segment that will drive economic growth across the region for decades to come.
