Over the past few years, Bulgaria has gone from having a small patchwork of digital finance startups to hosting more than 150 fintech companies, most of them clustered in Sofia. The sector has seen consistent growth in revenue, investment, and international visibility, and it’s not just about volume. It’s about how these companies are scaling fast, experimenting across verticals, and attracting global backing.

The digital payments segment is especially dominant. It makes up about a third of all fintech activity in the country and drives more than 60% of the industry’s revenue. Names like BORICA, Paynetics, and EasyPay form the local backbone, while giants like Visa and Mastercard have set up shop here too. Add in Bulgaria’s first fintech unicorn, Payhawk, and a wave of crypto innovation led by companies like Nexo, and the picture gets clearer: Bulgaria is a testbed for real fintech ambition.

So, how did this happen? What role did regulators, banks, and cross-border investors play in shaping the ecosystem? And what’s next as Bulgaria eyes eurozone entry and deeper EU integration?

That’s what we’re about to explore.

Regulation: Stability First, Innovation Close Behind

Bulgaria’s financial regulation system is methodical, and that’s part of what’s helped the fintech ecosystem grow without overheating. At the centre of it all sits the Bulgarian National Bank (BNB), which acts as the country’s central bank, banking regulator, and macroprudential watchdog. It issues licenses for banks, payment institutions, and e-money firms, oversees financial stability, and implements EU rules like PSD2.

Since 2020, the BNB has been under “close cooperation” with the European Central Bank, meaning the ECB now supervises Bulgaria’s largest banks directly through the Single Supervisory Mechanism (SSM). This was a major step forward in aligning with the eurozone. The BNB has gradually raised capital buffers, like the countercyclical capital buffer (CCyB), which hit 1.5% in 2023 as a way to prevent excessive credit growth and make the system more shock-proof.

Speaking of eurozone preparations, Bulgaria still aims to adopt the euro, even though that timeline has slipped past 2025 due to inflation concerns. But regulators are treating it like a when, not an if. The BNB recently connected its national payment system (BISERA) to the ECB’s TIPS platform, enabling instant euro transfers, one of the last pieces of technical infrastructure needed for euro adoption.

Another big name in the regulatory space is the Financial Supervision Commission (FSC). While the BNB handles banks and payments, the FSC oversees insurance, pensions, capital markets, and non-bank finance. They’ve started to lean into fintech more actively, rolling out a Strategy for Monitoring Financial Innovation (2021–2024) and showing openness to ideas like a regulatory sandbox, though a full one hasn’t launched yet.

There’s also the Ministry of Finance, which handles legislation and coordinates Bulgaria’s eurozone strategy and post-COVID recovery investments. Their work with the BNB and FSC helps align Bulgaria with upcoming EU rules like MiCA (for crypto) and DORA (for digital operational resilience).

So far, this three-pronged setup (BNB, FSC, and the Ministry) has struck a fairly good balance between financial stability and fintech growth. One key challenge, however, remains financial literacy. Bulgaria’s population still struggles with understanding new financial products, especially digital ones. The government’s Financial Literacy Strategy (2021–2025) tries to tackle that, but making fintech truly inclusive will take time.

Commercial Banks, Neobanks & Fintechs: Digitalisation Meets Consolidation

Bulgaria’s banking sector is concentrated, foreign-owned, and (over the past few years) quietly getting a digital overhaul. As of the end of 2023, 23 banks were operating in the country, including six branches of foreign banks. But it’s the top five that run the show, holding nearly 77% of all banking assets. That level of concentration isn’t new, but what’s changed is how these banks are operating.

There’s been a steady wave of consolidation. The most recent example was in 2023, when Postbank (Eurobank Bulgaria) acquired BNP Paribas Personal Finance Bulgaria, tightening its grip on the retail lending market and expanding its customer base.

Banks like UniCredit Bulbank, DSK (OTP Group), UBB (KBC), and Postbank are not only dominant but also investing heavily in digital transformation. Bulgaria’s eurozone ambitions are pushing banks to modernise legacy systems, tighten up compliance, and rethink how they deliver services online. A lot of this is also driven by necessity, such as regulatory alignment and rising customer expectations.

United Bulgarian Bank (UBB), part of the Belgian KBC Group, has been getting noticed not just for tech upgrades but also for its ESG credentials. In 2024, UBB was named Best Digital Bank and Best ESG Bank in Bulgaria by Euromoney, proof that digitalisation and sustainability can go hand in hand.

Meanwhile, neobanks and fintech-style lenders are starting to carve out their own space. A major move came in 2024 when Advent International announced it was acquiring tbi bank, a Sofia-based digital-first bank focused on Buy Now, Pay Later and consumer lending. Tbi isn’t a classic neobank, but it plays like one: mobile-first, quick onboarding, and accessible financing options.

On the infrastructure side, Evrotrust has become a key tech provider, especially in digital identity. In 2023, the Bulgarian government officially adopted Evrotrust’s eID scheme as the national standard for electronic identification, allowing people to sign documents and access public services online. The company is also working with private clients. Porsche Finance Group Bulgaria now uses Evrotrust to digitise internal workflows.

Beyond banks and neobanks, Bulgaria also has a handful of heavyweight fintechs that are powering much of the ecosystem’s infrastructure:

• BORICA, a state-backed payment infrastructure provider, runs the Blink instant payment system, launched in 2021 for 24/7 transfers in BGN. It later added person-to-person transfers via phone number, and is now being linked with the ECB’s TIPS platform for euro instant payments.
  
• Paynetics is a licensed e-money institution that operates across the EU and UK, offering card issuing, embedded finance infrastructure, and payment solutions to fintechs and merchants.
  
• iCard is one of the oldest fintech names in Bulgaria. Its digital wallet app supports IBAN accounts, P2P transfers, foreign exchange, and even crypto/metal investments. The company now serves 1.8+ million clients in 30+ countries.
  
• And EasyPay, while sometimes flying under the radar, is one of the most widespread hybrid payment platforms in Bulgaria, combining physical cash-in/cash-out points with digital services and integrations into the national payments infrastructure.

Fintech Startups & Investment Beyond Unicorns

For a long time, Bulgaria’s fintech scene flew under the radar. That changed in 2022, when Payhawk raised a $100 million Series B extension led by Lightspeed Venture Partners, officially becoming Bulgaria’s first unicorn.

But Payhawk isn’t the only company making a difference. Over the past five years, Bulgaria has quietly grown a dense network of fintech startups, more than 150 by 2022. Most of them are SMEs based in Sofia, but their ambitions are regional, and sometimes global.

Take Iris Solutions, one of the first licensed open banking providers in Southeast Europe. They offer infrastructure for banks and fintechs to launch PSD2-compliant services. Or Boleron, an insurtech startup building a fully digital insurance platform. In 2023, it raised €2.1 million to expand into Greece and Romania, showing that regional investors are now looking at fintech through a wider lens.

So, what’s fueling all this? A mix of local and international capital. Funds like LAUNCHub Ventures and Eleven Ventures have backed some of the biggest names in the market, including early rounds for Payhawk and Nexo. LAUNCHub has also invested in Nexo’s early stages and continues to raise fresh capital for fintech and deeptech bets across the region.

Meanwhile, foreign investors are getting in earlier than they used to. Payhawk’s $100M round brought in Lightspeed, Greenoaks, and Earlybird. Even crypto startups like Nexo, though they’ve had a bumpy regulatory ride, drew global capital during the boom years. Some startups like Phos, a SoftPOS provider that turns Android phones into card readers, even got acquired by big names (Ingenico picked them up in 2023).

What’s also interesting is how established players like Paynetics are acting like platforms for others. Besides offering embedded finance infrastructure, Paynetics has actively supported fintech entrepreneurs, partnered with startups like Phyre, and even acquired UK neobank Novus to expand its digital reach.

From a macro perspective, Bulgaria still isn’t a massive funding market. But it still performs beyond expectations. In 2023, over €260 million in startup funding was raised in Bulgaria across all verticals, and fintech remained one of the strongest categories. According to StartupBlink, Bulgaria ranked 37th globally in the Startup Ecosystem Index, with Sofia acting as the central hub for innovation.

So while the unicorn headlines matter, the real story is about ecosystem depth. A growing number of fintech startups, VC funds with regional reach, and a few high-profile exits have created momentum. And if Payhawk’s rise is any indication, Bulgaria’s next breakout fintech might already be in the works.

Associations & Support: Who’s Holding Up the Fintech Scene

Behind the startups, funding rounds, and flashy exits, there’s a surprisingly solid support system helping Bulgaria’s fintech ecosystem grow. And for a relatively small country, it’s got a few things going for it that others don’t.

The Bulgarian Fintech Association (BFA) is probably the loudest voice in the room. Since 2018, they’ve been the go-to group for research, advocacy, and general ecosystem-building.  Then there’s the Visa Innovation Program, which Bulgaria helped launch and now co-leads through Eleven Ventures. 

What started as a local accelerator has turned into a regional platform connecting fintech startups across Greece, Turkey, and Bulgaria, with Sofia acting as a central hub. Startups in the program run pilots with Visa’s corporate partners and banks, which is a big deal when you’re trying to validate a product in a conservative industry.

And it’s not just Visa. A few years back, Raiffeisen Bank’s Elevator Lab also ran a chapter in Bulgaria to scout for fintech partnerships. One notable graduate was actually Phos, the SoftPOS startup that eventually got acquired by Ingenico. It’s a good example of how these programs can bring real value. 

Add to that startup hubs like Campus X, where fintech founders work out of the same building as VCs and tech mentors, and you get an ecosystem that’s tight-knit, not siloed. Some of the Visa program activity even took place there.

So while there’s no formal regulatory sandbox (yet), the combination of active associations, corporate-led programs, and VC-accelerator overlap has created a pretty functional support structure. It’s not flashy, but it works. And it helps explain why a country with just 7 million people keeps putting interesting fintechs on the regional map.

Conclusion: Early Days, Big Signals

Bulgaria’s financial sector has undergone major shifts in recent years, from the consolidation and digitalization of traditional banks to the rise of a growing fintech startup scene. It’s not the largest market in the region, but it’s moving fast and making itself hard to ignore.

What stands out in a Central and Eastern European context is the density and profitability of its fintech ecosystem. Bulgaria actually outpaces Romania in both the number of fintech companies and sector performance, and while it hasn’t positioned itself as a licensing magnet like Lithuania, it stands out for its engineering talent, strong infrastructure, and cost-effective environment. 

The sector is still in early stages, but it’s vibrant, well-networked, and building from solid fundamentals. With active associations, cross-border accelerators, and a healthy mix of local and foreign investment, the conditions are right for entrepreneurs to scale.

In the larger context of CEE, Bulgaria has positioned itself as both a collaborator and a competitor, collaborating to build regional fintech synergies while competing by offering a highly skilled yet cost-effective environment for financial services development. 

The country’s first fintech unicorn and successful exits signal the coming of age of the ecosystem. Going forward, the continued inflow of EU funds, the prospect of euro adoption, and sustained tech innovation are poised to further integrate and advance Bulgaria’s financial market

Simplifying Currency Conversion

The initiative by TBI Bank simplifies the process for clients who need to convert their currency from Bulgarian Lev (BGN) to Euro (EUR), reducing financial burdens associated with conversion fees. 

Currently, Bulgarian customers lose an average of about 6 BGN for every 1000 BGN converted. By offering conversion at the official bank rate and eliminating the spread, TBI Bank ensures that clients save money, making financial transactions and planning more predictable and straightforward as the country transitions to the Euro.

TBI Bank is leveraging its digital platform to facilitate this service, allowing clients to perform currency exchanges digitally at any time of the day securely and efficiently. This approach not only enhances customer convenience but also aligns with modern banking trends towards increasing digitalization and customer-centric services.

This initiative by TBI Bank is expected to play a role in smoothing Bulgaria’s transition to the Euro, providing both individuals and businesses with the tools they need to manage their finances more effectively in a changing economic landscape. It also reflects TBI Bank’s role as a pioneer in adopting financial practices that can lead to broader economic benefits for Bulgaria.

To do exactly that, the Romanian Fintech Association Gala brings together the brightest minds in Romania’s fintech scene. It’s an annual event that not only hands out awards but also spotlights how far fintech has come in Central Eastern Europe (CEE). 

This year, the gala, which took place at The Marmorosch Hotel in Bucharest, was especially significant as it coincided with the launch of the Romania-Bulgaria Fintech Report—a collaborative effort between the Bucharest Business School and the Faculty of Economics and Business Administration in Sofia.

The report was the brainchild of several distinguished academics and industry experts, including Associate Professor Vasile Alexandru Strat, Dean at Bucharest Business School, who attended the Gala, and Dr. Deyan Radev from the Faculty of Economics and Business Administration, Sofia University.

Community and Innovation at the RoFintech Awards Gala

This year’s Romanian Fintech Association Gala was all about class with a twist. Industry leaders gathered not just to celebrate but to connect. The presence of the Bulgarian Fintech Association added to the event’s significance, underscoring the growing cross-border collaboration in the fintech sector.

The event was marked by several key award presentations, with iFactor stealing the spotlight. They picked up three out of the four nominations, including awards for the “Most Innovative Fintech Project,” “Collaboration of the Year” in partnership with Raiffeisen Bank Romania, and “Fintech Startup of the Year.” 

Our continuous effort to democratize access to financing and innovation through technology and successful collaborations with leaders in the financial industry has brought iFactor three top awards at the Romanian Fintech Awards Gala. We thank the Romanian Fintech Association for organizing the event and the jurors for recognizing our achievements!

Cosmin Curticapean, CEO of iFactor

Another nominee recognized with an award was BCR, which received the “Excellence in User Experience” award for its George platform. The bank was also honored for its commitment to innovation with the “Romanian Open Banking Initiative (ROBI)” award. Additionally, Banca Transilvania (BT) distinguished itself by receiving the “Bank Most Open to Fintech Collaboration” award, underscoring its proactive approach to engaging with the fintech sector.

Bridging Markets Through Collaboration

For the past five years, fintech in Romania and Bulgaria has been on a rapid ascent. This latest report, which was unveiled at the RoFintech Gala, represented a joint effort between some of the top academic institutions and fintech associations in both countries, analyzing what’s been happening behind the scenes. It’s the first of its kind to assess both ecosystems, using consistent methodologies and updated data to keep things comparable year over year.

Coordinated by the Bucharest Business School and backed by the Romanian Fintech Association, the effort also includes insights from Sofia University’s Faculty of Economics and Business Administration and the Bulgarian Fintech Association. This broad team approach has pooled expertise from across four major universities to tackle the complex task of mapping the fintech landscape—a landscape where distinguishing a fintech firm from a non-fintech firm can be trickier than most people think.

Of course, getting the data for this kind of report isn’t as simple as sending out a few surveys. In their analysis, the team streamlined how they categorized fintech companies compared to earlier studies. They looked at two broad types: those providing direct financial services and those offering the technology—support and services that make the digital work. As a result, they came up with the following insights:

Diverse and Dynamic Ecosystems

Both countries show solid growth and a burst of innovation with a mix of startups and established companies, especially in urban hubs like Bucharest and Sofia. Both ecosystems benefit from an increasing pool of tech talent and a growing interest from international investors looking to tap into emerging European markets.

Complex Regulatory and Legal Landscape

Both countries are tightening their belts with regulations that aim to keep pace with global standards. The EU’s frameworks, including the latest on digital finance and payment services, play a big role, but local adaptations mean there’s a unique twist to how things are done in each country. 

Economic Impact 

Sectors like digital payments and enterprise technology are leading the charge. Digital payments are surging thanks to increased online consumer activity and a push towards cashless transactions. Enterprise technology, particularly solutions that streamline operations and enhance security, is also getting much attention as companies look to scale efficiently and securely.

Challenges

Regulatory issues and the fast pace of technological change can be tough to keep up with. Adoption rates for new technologies are climbing, but it’s not without growing pains—integrating advanced tech like AI and blockchain is still a major hurdle for many. Strategically, there’s a strong focus on innovation and scaling up, but finding the right talent and navigating the regulatory environment are significant challenges.

Fintech in CEE: Growth Trajectories in Romania and Bulgaria

In Bulgaria, the fintech sector has concentrated growth within the nation’s three largest cities—Sofia, Plovdiv, and Varna—with Sofia emerging as the heart of this activity, hosting 131 of the total 156 fintech firms. This cluster of companies benefits from a strategic mix of high-quality education facilities, robust digital infrastructure, and strategic geographical positioning. Of course, this transition (as with most countries from the Eastern part of Europe) happened right after the fall of the communist regime.

A seminal transformation within the digital finance sector in Bulgaria unfolded following the dissolution of the communist regime.

 (Radev and Penev, 2024)

This change marked a shift from public sector-driven innovation to a dynamic market-oriented approach that has spurred growth, especially in 2018 and 2020.

Romania’s fintech sector, on the other hand, has rapidly matured, shrinking the gap with more established markets. This growth is fueled by new funding opportunities, increased cooperation within the ecosystem, and some notable exits. The Romanian fintech ecosystem has strengthened its regional and international ties, laying a foundation for future collaboration and innovation.

Since its inception, the Bulgarian Fintech Association has applied the Quadruple Helix Model of Innovation, involving government, academia, industry, and civil society, to foster a comprehensive developmental approach for the ecosystem. In Romania, similar collaborations are underway, with universities increasingly playing a central role by aligning with fintech firms to bridge the gap between regulatory frameworks and market needs.

These research projects, together with the close collaboration with RoFintech, could lead to FinTech spinoffs emerging in the coming years, founded either by faculty members alone or by faculty members together with executives from the existing companies.

Success Stories

In Central and Eastern Europe, particularly in our two centers of interest, fintech companies are making strides without much fanfare but with a lot of substance. Companies like Paynetics (Bulgaria) are creating a niche for themselves in the digital payments sector by helping small businesses and freelancers accept payments digitally without the need for traditional and more costly payment systems. This service has been especially crucial for small enterprises looking to modernize quickly and affordably.

In Romania, start-ups like iFactor are demonstrating the power of targeted solutions. Their approach is direct and practical: they offer an innovative financing platform that leverages technology to provide quick, flexible funding solutions to small and medium-sized enterprises (SMEs). This is crucial in a market where traditional banking procedures can often be slow and restrictive.

These examples exemplify how targeted innovation and collaborative efforts can result in a dynamic and inclusive financial environment. By addressing specific market needs and overcoming traditional barriers, fintech companies are paving the way for a more inclusive and efficient financial landscape in this part of the world.

Paynetics stands out in the crowd as one of Europe’s top names in embedded finance, boasting a license as an e-money institution authorized by the Bulgarian National Bank. This gives it the green light to stretch its services all over the European Union.

Expanding Horizons

This collaboration is a big change for CatalystPay, especially when it comes to expanding its European circle of acquiring bank partners. It’s a clear signal of the company’s ambition to serve up flexible and strong payment services that meet the fast-changing needs of digital businesses head-on. 

This partnership underscores our commitment to a multi-acquiring strategy designed to elevate reach, visibility, and sustainable growth for digitally native businesses within Central and Eastern Europe (CEE) and beyond.

Stefan Zisov, Chief Operations Officer at CatalystPay

One of the immediate perks of this partnership is CatalystPay’s new ability to handle settlements in Bulgarian Lev (BGN), alongside a basket of other currencies. This is a big win for digital merchants in Bulgaria, simplifying their settlement processes and cutting out those pesky foreign exchange fees. It’s the kind of strategic edge that local businesses gunning for international growth have been looking for.

A Boost for the Fintech Ecosystem

Partnering with Paynetics cements CatalystPay’s presence in the local and regional market and changes how businesses can scale their operations globally. In today’s world, where digital payments are skyrocketing thanks to an uptick in the digitalization of commerce and services, this partnership is set to cater to the evolving needs of merchants and consumers alike.

By joining forces, the two companies are gearing up to bolster the local and regional fintech ecosystem, promising unmatched access to the local market and helping local entities shoot for the stars with their international aspirations. 

We are excited to announce our strategic partnership with CatalystPay, a leading player in the payment ecosystem. This collaboration will further enhance our capabilities and strengthen our position as Europe’s leading regulated fintech. Together, we aim to revolutionize the payment industry and provide innovative solutions to our clients.

Ivo Gueorguiev, co-founder at Paynetics

The app partners with 130 ethical brands and allows users to participate in certified Carbon Removal Projects to offset their purchases’ carbon footprint. Additionally, with every transaction, Novus directs a portion of its revenue to an NGO chosen by the customer.

A Strategic Expansion into Sustainable Banking

This acquisition marks a strategic move for Paynetics, enabling it to bolster its environmental, social, and governance (ESG) ecosystem across Europe. It aligns with Paynetics’ goal to advance social and environmental initiatives through its embedded finance solutions.

This news follows Paynetics’ achievement last year of securing an electronic money institution (EMI) license from the UK’s Financial Conduct Authority (FCA). The Sofia-headquartered company is known for offering a wide array of B2B and B2B2C solutions, including card acceptance and issuance, as well as digital wallets.

With this move, Paynetics is set to empower more customers to make ethical consumption choices easily. The integration of Novus’s rewards system for sustainable purchasing into Paynetics’ suite of services will likely encourage more consumers to consider the environmental impact of their spending, fostering a culture of conscious consumption.

Aiming High for Autonomy

Currently, Paysera Bulgaria operates somewhat as a franchise under a contract with Lithuania’s Paysera LT, sharing revenues and responsibilities. Snagging an electronic money license from BNB would pivot Paysera Bulgaria towards more autonomy, transforming its Bulgarian and foreign physical persons and companies from being in contractual relationships with the Lithuanian company to becoming direct clients of the Bulgarian entity.

Growth Despite the Challenges

Despite some problems, including a previous license rejection from BNB, Paysera Bulgaria has seen substantial growth. With around 10,000 clients and a blurry line between registered individuals and active users, the company navigates a complex financial landscape. Their financial snapshot reveals about 1 million levs in revenues and a modest 26,000 levs net profit in 2022. Expectations are set not on immediate profitability but on expansion and embracing the Eurozone’s future impacts.

Looking forward, Paysera Bulgaria isn’t just focusing on regulatory compliance but also on broadening its business horizons, including a venture into the Romanian market and potential investments in property crowdfunding platforms. With a current team of 53 and relationships based on a unique business model with Paysera LT, the company stands on the brink of an exciting phase of growth and development.