site.btaElectronic Food Vouchers Phased In, Higher Ceiling Could Be Considered due to Price Increase

The digitalization of food vouchers has increased the interest of businesses to provide the most popular social benefit in Bulgaria, according to observations of the Association of Food Voucher Operators in Bulgaria.

There will most likely be a need to increase the amount provided in the form of food vouchers next year, AFVOB Secretary General Tanya Obushtarova said in an interview for BTA.

According to her, more or less half of the available quotas for this year have been used for the six months, which shows that the situation is optimal for the time being. For 2024, the total ceiling is BGN 1.6 billion, and up to BGN 200 per worker per month.

According to Tanya Obushtarova, an increase in this tax-free value, which has not been changed since the beginning of 2022, can be discussed. Since its last increase, food prices have risen significantly, she argued.

The association's observations also show that the majority of employers on average provide more than BGN 150 to 160 per employee.

Since July 1, the paper voucher is now history and only electronic ones are issued. Their big advantage for the consumer is that they can be used to pay at a POS terminal even for small amounts. Employers save administration costs. If the voucher amount is insufficient, the option remains to pay by bank card or cash.

Since the beginning of January, a mixed regime has been in place where employers could choose whether to provide paper or electronic vouchers.

According to the association's data, more than two-thirds of employers have switched to electronic vouchers, and this has happened smoothly since January.

"Many employers have been waiting for this change for a long time, and the majority of them in the first months of digitalization switched to electronic vouchers; others waited until the last moment for various reasons," said Obuscharova. "Our observation is that the change is generally well received and most employers are ready for it. Only a few have any concerns," she added.

In the first months of 2024, operators have signed contracts with a very large number of outlets, and there is generally no problem with the network - it is commensurate with that existing for paper vouchers.

Obushtarova pointed out the advantage for retailers: "They had to collect and store these paper vouchers, and send them to the food voucher operators, then we cashed them by bank transfer within 20 days of receipt. Now, when employees pay with an electronic voucher at a POS terminal, outlets receive the funds almost immediately, with the delay that is normal for other types of bank cards."

According to the association's data, more than two-thirds of employers have switched to electronic vouchers, and this has happened smoothly since January.

"Many employers have been waiting for this change for a long time, and the majority of them in the first months of digitalization switched to electronic vouchers; others waited until the last moment for various reasons," said Obuscharova. "Our observation is that the change is generally well received and most employers are ready for it. Only a few have any concerns," she added.

In the first months of 2024, operators have signed contracts with a very large number of outlets, and there is generally no problem with the network - it is commensurate with that existing for paper vouchers.

Obushtarova pointed out the advantage for retailers: "They had to collect and store these paper vouchers, and send them to the food voucher operators, then we cashed them by bank transfer within 20 days of receipt. Now, when employees pay with an electronic voucher at a POS terminal, outlets receive the funds almost immediately, with the delay that is normal for other types of bank cards."

At mid-year, the larger percentage of paper vouchers has already been spent. "People who still have paper vouchers need not worry: they can use them until the end of their validity period which is stated on them. Our observation is that vouchers are generally spent almost immediately, within a month or two of receiving them," Obushtarova said.

She noted that both employers and employees prefer to have both a card and an app for the vouchers, so they can be more flexible and more family members can use the vouchers.

According to Obusharova, consumers rate having a mobile app quite highly because they can track their availability, the transactions they make, where they spent their money and the value of the food they bought. Accordingly, if there is any problem, they can immediately find out and alert the operator.

"We have had very positive feedback that this is a significant advantage and convenience. The apps that operators provide may even have additional features: a list of the store network, some discounts and offers to employees, for example," she explained.

As before, food vouchers are a social benefit and are absolutely free for workers. The cost of issue and maintenance is borne entirely by the employer, Obushtarova explained further. "Of course, this involves an investment, but I would not say it is significant for employers given the savings they make in taxes and social security contributions and, above all, the satisfaction of their employees. In this way, employers further motivate their workers and increase their purchasing power," said the Secretary General of the Association of Food Voucher Operators in Bulgaria.

It is a requirement for companies to provide the same amount to all their employees. Card funds cannot be withdrawn at an ATM or transferred to a bank account. Electronic vouchers can only be used at retail outlets that have signed a contract with the relevant voucher operator and accept payments at a POS terminal. Only food and food products can be purchased with them, the Association recalls.