The Necessity and Specifics of Opening Bank Accounts in Armenia
Introduction
It is well known that a nation's financial and economic growth and development play a crucial role in shaping and enhancing the overall living conditions of society. In this regard, the UN devised an interesting measurement system called the Human Development Index (HDI). This index evaluates how the economic status of a country influences social and household well-being. Despite Australia, Sweden, the Netherlands, Germany, and Norway ranking among the top ten most socially and economically developed nations according to the HDI in 2023, none of these countries made it to the top ten safest countries due to relatively high crime rates (as evidenced by Global Peace Index (GPI), conducted in the same year).
Therefore, a key conclusion can be drawn: despite having a stable financial and economic foundation and a flourishing society, individuals must proactively safeguard their property and assets. Naturally, ensuring the safety of financial resources ranks among the utmost priorities. Fortunately, banking services can help in organising this process efficiently.
To safeguard the financial resources and ensure their efficient and smooth use, the initial step to consider is the possibility of opening various bank accounts.
Next, we will delve into the gist of a bank account and briefly outline its opening procedure, namely:
What is a bank account, and what bank accounts can be opened in Armenia?
In which currencies can bank accounts be opened?
Procedure for opening a bank account at Armenian banks.
Documents and conditions for opening a bank account.
What is the cost of opening a bank account?
How long does a bank account opening take?
How to close a bank account?
Key takeaways
Regardless of the social-economic situation of the country, nowadays it is necessary for each of us to take steps to ensure the security of financial means, which can be organized very efficiently thanks to the services provided by a number of banks.
What banks operate in Armenia?
Armenia's banking system is composed of domestic and foreign banks. According to the Central Bank of Armenia's 2023 data, there are 18 domestic banks, with notable ones including CJSC "ARARATBANK," CJSC "ID Bank," CJSC "ARMENCONOMBANK," CJSC "EVOCABANK," and CJSC "FAST BANK," which licensed in 2022. It is worth noting that the majority of domestic banks are privately owned.
On the other hand, Armenia also has branches of foreign banks, which Russian, Lebanese, Iranian, and Hong Kong corporations mostly own. Among the foreign banks, "Byblos Bank" is a branch of the Lebanese "Byblos Bank" in Armenia. Another notable foreign bank is "VTB-Armenia Bank," a Russian PJSC "Bank VTB" subsidiary in Armenia. "HSBC Bank Armenia" is a representative of Hong Kong PLC. At the same time, "Mellat Bank" was established as a symbol of Armenian-Iranian friendship and cooperation and is a branch of the Iranian CJSC "Mellat Bank" in Armenia.
Key takeaways
Currently, all 18 banks operating in Armenia are controlled by the Central Bank of Armenia.
Banking services in Armenia
Regardless of residency status, Individuals and legal entities can open bank accounts in Armenia. They have access to a diverse and innovative range of banking services, which allow for efficient financial management through flexible and accessible systems. Clients can take advantage of various benefits. Below is a comprehensive list of banking services provided by banks in Armenia, as per studies:
• Opening various bank accounts in different currencies,
• Debit, credit, and issuing other cards, including international ATM card issuing,
• Credit services,
• International concierge services,
• Investment services,
• Acceptance of deposits,
• Cash and non-cash transfers,
• Other specialized services.
Armenian legislation lays out a comprehensive framework that governs the services banks provide, including the specific procedures banks must follow before offering these services. By doing so, Armenia ensures the protection of clients' rights. The legislation prescribes the highest and lowest interest rates that banks can charge within the scope of their services. This helps to regulate the market and ensures that clients are not exposed to exploitative practices.
Moreover, the legislation specifies the obligations and responsibilities of banks towards their clients. For example, banks are required to provide clear and accurate information about their services, including the terms, tariffs, and procedures for each service. They are also required to disclose any fees or charges associated with the service, including any penalties or fines.
However, while the legislation provides a general framework for banking services, the specific terms, tariffs, and procedures for each service may vary depending on the practices of individual banks, their internal regulations, and certain individual or entity characteristics. Therefore, clients are advised to carefully review the terms and conditions of each service before engaging with a bank.
Key takeaways
The services provided by Armenian banks, from opening bank accounts to credit services and accepting deposits, have their own clear regulations, which provide additional guarantees to ensure the protection of customers' rights.
What bank cards are available in Armenia?
(Visa, MasterCard, and American Express)
Various cards and payment systems in Armenia directly influence the effective use of bank accounts. Bank accounts linked to the bank card enable instant contactless payments, quick transfers, and many other transactions, saving time and resources. Armenian banks currently issue and provide services for a number of debit, payment, and credit cards, including Arca, Visa, MasterCard, AMEX, Diners Club, and other cards, which we will delve into further below.
ArCa national payment system
The ArCa payment system is a payment method in Armenia that allows local payments through cards issued by Armenian banks. These cards can only be used within Armenia and are designed to enable payments at trade and service providers across the country. ArCa cards also allow cash withdrawals from ATMs within the country, making online purchases and payments on websites with the ArCa logo, as well as utility payments, transfers, and other transactions.
In 2017, the ArCa payment system entered into a partnership with the Russian MIR payment system to provide services to each other's cards. As a result of this cooperation, ArCa cards can now be used in the Russian Federation, and Russian MIR cards can be used in the infrastructure of the ArCa system. This means that ArCa cardholders can use their cards to make payments and withdraw cash in Russia, while Russian MIR cardholders can use their cards in Armenia. This partnership has greatly expanded the usability and convenience of ArCa cards for Armenian citizens and businesses.
Visa cards in Armenia
Visa cards issued by Armenian banks are an excellent option for those who want to enjoy many local and global privileges. These cards offer numerous benefits to cardholders and their families, including travel insurance that covers emergency medical expenses, trip cancellations, and loss of baggage. Purchase insurance is also included, which protects cardholders against unauthorized purchases, theft, and accidental damage to purchased items.
In addition, Visa cardholders can enjoy concierge services, which assist with travel arrangements, entertainment, and other lifestyle needs. They also get free access to business lounges in over 1000 airports across 450 cities worldwide, making travel more comfortable and convenient. Furthermore, Speed Pass services allow cardholders to make fast and secure payments, while VIP guest status at over 900 luxury hotels offers exclusive perks and upgrades.
Payment cards issued within the Visa system can be used as credit cards, with banks offering favorable credit limits for cardholders based on specific service packages. This function allows cardholders to make purchases and pay for them later without needing cash or other payment methods.
Digital Visa cards are becoming increasingly popular due to their fast processing and issuing, often without opening fees. These cards are accessible through a mobile application, eliminating the need for physical cards and reducing the risk of loss or damage. With digital cards, cardholders can quickly and conveniently manage their accounts, check balances, and make payments.
MasterCard cards in Armenia
MasterCard payment system provides premium chip cards that Armenian banks issue. These cards are designed to offer a high level of security and modern technologies to ensure the safety of the funds. With the convenience of access anytime, anywhere, cardholders can withdraw money from ATMs with the MasterCard logo worldwide. Additionally, these cards allow cardholders to make many non-cash payments, including pre-booking airline tickets, hotel rooms, and cars, all on preferential terms. Cardholders can enjoy exclusive travel benefits, such as access to airport lounges, travel insurance, and emergency assistance services. These cards also offer rewards programs with cashback, points, and discounts on a variety of purchases. With MasterCard premium chip cards, Armenian banks provide their customers with comprehensive financial services to meet their needs wherever they are in the world.
American Express cards in Armenia (AMEX in Armenia)
American Express payment system cards are also issued in Armenia, enabling payments in over 200 countries worldwide. Armenian banks issue American Express Gold, Blue, and Cashback cards, which provide an array of insurance services covering medical, travel, and purchase insurance. Cardholders benefit from purchase protection against price fluctuations, damage, or loss during delivery. In addition, all purchases made with American Express cards are insured against damage or theft for 120 days from purchase. If the merchant provides a warranty period, it is doubled if the purchase was made using an American Express card. American Express cardholders receive additional complimentary cards, allowing their family members to benefit from all the privileges the primary cardholder enjoys. Cardholders have the option to purchase a Priority Pass card, with access to VIP lounges at over 1,200 airports worldwide.
Key takeaways
Currently, a number of world-famous payment cards are issued and serviced in Armenia, including: Arca, Visa, MasterCard, AMEX, Diners Club, American Express, etc.
Payment systems in Armenia
In Armenia, many individuals prefer to use payment systems to quickly transfer money without having to go through the hassle of opening a bank account. Payment systems provide a more convenient and accessible way for users to send and receive money, especially for those who do not have a bank account or are looking for a faster alternative.
Moneytun is a fast money transfer system suitable for making and receiving dollar transfers from Armenia to the USA, China, and vice versa. Within the USA, Moneytun operates in California and Nevada. Transfers to China are executed through crediting to the China Union Pay Card.
IntelExpress is a widely recognized money transfer system prevalent across the CIS (Commonwealth of Independent States) region and a number of other countries.
Ria Money Transfer is a fast money transfer system that operates in 182 countries globally. It's a simple, fast, and secure way to transfer funds in Euros and US Dollars. The commission fee is solely levied on the sender in Armenian drams at the rate set by the Central Bank of Armenia on the given day.
MoneyGram is a fast money transfer system operating in 192 countries around the world. Apart from worldwide transfers, the system also allows for bill payments from Armenia to the USA. MoneyGram International is one of the leaders among international money transfer companies.
PayPal while not entirely a cashless payment system, stands as the most extensive debit electronic payment system globally. It allows clients to send a variety of payments and transfers from any location worldwide. Using its services merely requires linking any payment card to an email address. Unfortunately, in Armenia, it is still not possible to open an electronic wallet connected to open an electronic wallet connected to the PayPal payment system for receiving transfers. Nevertheless, individuals can make any payments and transfers with the open PayPal system.
It should be noted that citizens of the Russian Federation can use the PayPal payment system in Armenia. This is due to recent geopolitical events that have led PayPal to restrict access to its system for both citizens and foreigners residing in Russia.
Key takeaways
In recent years, such payment systems designed for quick money transfers, such as Moneytun, IntelExpress, Ria Money Transfer, MoneyGram, Paypal, etc., have become very popular in Armenia.