It would seem the imposition of capital controls in Greece hasn’t been without its benefits.

Capital controls have seen 135 per cent increase in card transactions.

While officials worried the measures would fuel the black market, the opposite has occurred, with close to one million debit cards issued, helping to curb undeclared transactions.

Last month alone, Alpha Bank reports having issued 220,000 cards – more than the whole of 2014, while the National Bank of Greece issued more than 400,000 debit cards in the last four weeks.

Greece’s manager for Visa Europe, Nikos Kabanopoulos said the number of active Visa debit cards has now more than doubled, along with a 135 per cent increase in card transactions in the two weeks following the introduction of capital controls.

Alpha Bank’s general manager for household lending, Leonidas Kasoumis, attributes the shift to pensioners, who during the closure of the banks realised the need to access their money from cash machines and to purchase goods.

Mr Kasoumis said during July, debit card sales at the supermarket and petrol stations doubled, while increased card usage was not exclusive to the cities, with numbers tripling in rural areas.

“Capital controls were a big trigger. It’s good for merchants, because cash is limited; it’s good for banks because it reduces operational costs. But the best news is for the economy,” Mr Kasoumis told Fairfax Media.

The rise in credit card use has pleased the Confederation of Greek Tourism (SETE).

SETE’s head, Andreas Andreadis, urged tourists to Greece back in May to use cards where possible to help fight tax evasion.

“In a country where the tax collection system is so inefficient, credit cards are the easiest way of clamping down on evasion,” said Mr Andreadis.
“We calculate that around 40 per cent of receipts are not issued in tourist areas to avoid VAT.”

Though capital controls introduced in June continue throughout the country, with Greeks limited to a cash withdrawal of €420 a week, spending on debit and credit cards is unlimited.

Athenian cafe worker Alexandros Papadakis says he has already noticed an increase in customers asking to pay by card.

“I hope it becomes a habit among all Greeks,” he said.

Sources: The Age,
The Guardian