Final Preparations Underway for Bulgaria’s Transition to Euro in Card Payments

Bulgaria is approaching the final stages of preparation for transitioning card payments from the national currency, the lev, to the euro. In recent years, the Bulgarian National Bank (BNB) and financial institutions have emphasized their readiness, creating the impression that the transition would be instantaneous. However, the actual process involves years of planning and coordinated action across multiple systems and institutions.

The BNB, in collaboration with BORICA AD, the Government Securities Depository (DDZK), the Central Depository AD, and the banking community, has led the preparations for transitioning payments and settlements to the euro. Key milestones have already been achieved in line with the National Plan for the Introduction of the Euro. In 2023, the BNB, domestic banks, and the BISERA system for customer payments in euros joined the Eurosystem's consolidated TARGET services platform. Bulgarian institutions also integrated into the TARGET2-Securities platform for securities settlement, deepening ties with the euro area.

Further, a project involving the BNB, the Ministry of Finance, BORICA AD, and local banks migrated budget payments in leva to SEPA standards. As a result, all customer payments in leva now align with Eurozone business and technical specifications, smoothing the path toward SEPA-compliant euro payments.

In July 2024, the BNB achieved full SEPA reachability by joining the STEP2 system of EBA Clearing. This enables Bulgarian banks to execute euro payments to over 4,800 service providers across the SEPA zone. Since December 2024, the BNB (via the TARGET-BNB system) and BORICA AD (via BISERA) have participated in TIPS, allowing local and cross-border instant euro payments under the SEPA Instant Credit Transfer scheme. These transfers are executed 24/7 within 10 seconds, from initiation to confirmation. Ongoing efforts aim to integrate Bulgarian banks with TIPS to maintain high service levels post-euro adoption.

The migration of card payments to euros and BORICA's planned accession to TARGET by the end of the year are well advanced. Operational preparations in payment systems and settlements are in their final phase, progressing as scheduled.

According to ECB statistics from January 30, 2025, non-cash payments in Bulgaria during 2023 totaled 572.3 million transactions, valued at BGN 1,098.5 billion. The first half of 2024 saw 309.4 million such transactions, amounting to BGN 565.5 billion. Card payments alone reached 310.8 million in 2023 (BGN 20.0 billion), and 164.8 million in the first half of 2024 (BGN 9.4 billion), underscoring the importance of card-based digital transactions.

As of February 2025, deposits in euros represented 25% of household and NPISH (non-profit institutions serving households) sector deposits. In the case of non-financial and financial enterprises, euro-denominated deposits made up 32% of total deposits. This widespread use reflects Bulgaria's close economic relationship with the euro area.

Following euro adoption, the BNB will retain its responsibilities as defined by the Bulgarian National Bank Act, amended in February 2024. These include managing efficient payment systems in line with EU law, operating TARGET-BNB, and integrating T2, TARGET-Securities, and TIPS. The BNB will also regulate and supervise payment system operators, service providers, and e-money issuers under the Payment Services and Payment Systems Act. These duties will remain under the Banking Department, which will additionally support the Eurosystem's monetary policy by supervising bank reserve requirements.

The BNB will also have the authority to provide emergency liquidity assistance (ELA) to solvent banks outside regular monetary policy operations. Furthermore, the BNB will maintain its statistical functions, contributing data to both the national statistical system and the European System of Central Banks (ESCB).

The digital euro, designed in response to rising demand for digital services and e-commerce, is poised to benefit all stakeholders. It aims to replicate the attributes of cash in a digital form, offering high confidentiality for consumers and businesses. Neither the ECB nor national central banks will be able to identify users or the nature of their transactions.

The digital euro will be free of charge for consumers and serve as a tool for financial inclusion. It will accommodate people with disabilities and those lacking access to banking or digital skills. As a unified pan-European payment solution, it promises merchants a low-cost, instant payment option, streamlining the fragmented payments market. It will also strengthen the euro area's financial sovereignty by reducing reliance on foreign payment platforms and fostering innovation in European payment infrastructure.