Albanian Prime Minister Edi Rama won a fourth mandate in May, promising Albanian citizens that he would lead the country into the European Union by 2030.

In mid-July, he announced another major plan for the same timeframe. "We have an ambition: that by the end of this decade, Albania will become a cashless society, meaning that all interactions and financial transactions are fully digital," he told representatives of start-ups and the technology and innovation sector at a meeting entitled "Albania 2030 — a vision towards European integration."

"What's needed is more upskilling," he went on, stressing that the necessary tools for a cashless Albania already exist. "I believe that if we manage to properly outline the roadmap ahead, this goal is entirely achievable, and it will free the country from a heavy burden of outdated practices and inefficiencies that weigh down everyday life," said Rama.

It all sounds very simple and straightforward. But is it?

'I prefer cash'

In everyday life, Mimoza A., a 62-year-old from Tirana, says that the only time she uses a bank card is when she withdraws her salary from the ATM near her apartment.

"It's not usual for people of my generation to use a card to pay for groceries or at the hairdresser. I prefer cash and I always will," she told DW.

Mimoza is not alone in this attitude; most people in the country feel that way.

Is the cashless society a pipedream in Albania?

When Albania cast off the shackles of communist dictatorship 35 years ago, it did not have a modern banking and financial system. Things were also slow to progress after the transition to democracy, with ATMs only being introduced in 2004.

Arben Malaj, who served as minister for finance and the economy from 1997 to 2005 and is now a senior financial expert and lecturer, feels that populism is the motor behind Rama's ambition to have a cashless economy.

Malaj says that there are a number of crucial elements that will make it difficult to achieve a cashless society in the next five years.

"The high rate of informality, especially in the agricultural sector, which accounts for a large part of [Albania's] GDP, is much larger than anywhere else in the region. A high percentage of the population lives in rural areas. Also, the biggest part of the emigrants' income — billions of euros per year — is sent outside the official payment channels. And Albania's main trade partners — Turkey, Greece and Italy — have high percentages of informality as well," he told DW.

He warns that any reduction in cash would require massive investment in cybersecurity.

'Dangerous' ambition

Cybersecurity experts such as Besmir Semanaj consider Rama's plan not only unrealistic, but also "dangerous."

Semanaj points to the massive cyberattacks on government institutions in 2024. Targets included the e-Albania system (the government services website) and the websites of the Albanian parliament and the Institute of Statistics.

Semanaj says that these and other major cyberattacks in 2022 clearly show that Albania is not only very exposed but also does not have the necessary architecture to protect this critical infrastructure.

"Even the most advanced countries in Europe, such as Sweden or Norway, are reassessing the need to keep a minimum of cash in circulation, precisely for reasons of security and readiness in emergencies or cyberattacks," he told DW.

"So, while the most digitalized nations are maintaining 'offline forecasts,' Albania says it is planning to become 100% digital in less than ten years, without first building basic cyber protection capacities. An economy that is totally dependent on digital systems and does not have an alternative is an unprotected and exposed economy that would be totally paralyzed by a virus or blackout," said Semanaj.

'Small and medium-sized businesses will suffer'

Hazis I. has worked as a manager in the tourism sector for some 40 years. Today he manages one of the most popular hotels in Tirana, which is used by tourists from all over the world.

As a rule, foreign tourists prefer to use cards to settle their bills. This is in stark contrast to the hotel's Albanian guests, who still prefer to pay in cash. This means higher costs for the hotel because businesses pay bank fees for every card transaction.

Hazis I. is not very enthusiastic about the prime minister's plans for a cash-free society.

"I am against this cashless objective, because we can deal with tourists who want to use a card to pay for a coffee that costs €1.50. But what shall I do with those small businesses that supply us with vegetables or cheese from the farm for our restaurant?" he said.

"During the summer season, for instance, I regularly buy watermelons from the farmer who sells them on the corner. He has never used digital payments, and I'm quite sure he never will. This plan will put small enterprises out of business. And even we will struggle a lot," he told DW.

Lack of concrete targets

For financial expert Arben Malaj, the objective of being cashless by 2030 has not been defined and is, therefore, not measurable. He says the government could set concrete targets and mandatory deadlines only after institutions, interest groups and academics have studied the payment system closely.

"Currently there is no 'zero cash' economy [anywhere in the world]. And in those countries where there is minimal financial education and a lack of digital knowledge, poor governance and poor quality of crucial public services — such as education, health, cohesion and social solidarity — and where perceived corruption is high, it is impossible to achieve major, sustainable success in the short term," says Malaj.

The Bank of Albania has noted an increase in electronic payments over the past ten years.

"The public has benefited from lower costs, products that were tailored to their needs and enhanced access to payment services, which has been reflected in a double-digit increase in the use of electronic payments, reaching 21 electronic payments per capita [per annum], compared to only two in 2015," said the bank's governor, Gent Sejko, in a press release last year.

A long way to go?

For Semanaj, this is too far below the EU standard, where member states count over 300 digital transactions per capita per annum.

"E-commerce is limited [in Albania]," he said. "International platforms like Stripe don't operate at all in Albania, and small or medium-sized businesses depend on local banks that offer gateways that are often very expensive to integrate. PayPal exists for individuals, but it is not an integrated solution for Albanian businesses. This means that online trading is limited and blocks the access of Albania in the global digital trade."

So, even though Albanian Prime Minister Edi Rama wants to catch up with Europe and join the EU as soon as possible, it looks as if Albania has a long way to go in terms of becoming a cashless society and will need more than a decade to adapt to this new financial culture.

Edited by: Aingeal Flanagan