Doing Business in Hungary 2010 - International Franchise Association

Although Hungary is still largely a cash economy, the number of bank cards (such as Visa and
Mastercard) and credit cards issued by commercial banks has grown significantly in recent
years. The use of bankcards has risen from 31 percent (2003) to 57 percent (2007). Particularly
in cities, consumers tend to use credit cards in malls, superstores, and supermarkets. Checks
are not used at all. A wide and reliable network of automatic teller machines (ATMs) operates
throughout Hungary.
Selling Factors/Techniques Return to top
Success in the Hungarian market is difficult without an in-country representative, agent, or
distributor. While marketing tools serve to introduce a product or service, personal visits carry
much more weight in Hungary. English, German and French are often spoken by younger
business managers and are more prevalent in larger firms. U.S. companies in Hungary are still
advised to have their brochures and information professionally translated and have a translator
during business meetings if needed.
U.S. companies should also be aware that access to capital is limited for many Hungarian firms.
With an inflation rate in 2009 at 4.2 percent in Hungary and bank lending rates between 9 and
20 percent, some Hungarian companies and their customers cannot easily finance purchases
locally. Most Hungarian firms are too small to offer stock or issue commercial paper. As a result,
business, including paying for imports, largely depends on self-financing. U.S. companies can
mitigate financing risks and better compete with EU firms by directing their Hungarian
customers to services like those of the U.S. Export-Import Bank.
Because business in Hungary is based upon personal relationships and trust, U.S. exporters
are encouraged to visit potential Hungarian customers when presenting a proposal and discuss
all conditions of future dealings. Face-to-face meetings are essential to successful long-term
business cooperation in Hungary. The U.S. Commercial Service Budapest, through its Gold
Key Service and International Partner Search Service, can pre-screen export market potential in
Hungary before U.S. firms commit resources.
Electronic Commerce Return to top
Citing the boost e-commerce could give Hungary’s productivity and innovation, the National
Development Plan places a high priority on advancing this sector. To this end, the Hungarian
Government instituted Law CVIII (17/1999(II.5.)) in 2001, which opens up e-commerce
competition by eliminating differences between domestic and EU-based vendors. See below for
further information on EU law regarding e-commerce.
Due to a lingering distrust of e-payments, e-commerce had a slow start in Hungary and
continues to lag behind Western Europe. The most developed segment, however, is e-banking.
The number of Hungarians using online banking services reached 2 million in March 2009
according to the National Bank of Hungary. Business-to-Consumer (B2C) e-commerce
represents 0.5 percent of Hungary’s retail trade compared to 1.8-2.0 percent in the EU 15
countries. In 2008, B2C e-commerce was estimated to reach USD 233-291 million (excluding
tourist services and air ticket sales). Figures on E-services are not available, but experts
estimate that turnover of online sale of insurance, air tickets, hotel reservation, cinema, theatre
and concert tickets equal to that of web shops. In 2009, B2C e-commerce is expected to
amount to HUF 95 billion (USD 468 million). According to industry sources, 80 percent of
Hungary’s e-commerce revenue is made by the 20 major players of its roughly 2,400 B2C
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