Jane Zavalishina EMA Brussels 2011 v2

7/31/2019 Jane Zavalishina EMA Brussels 2011 v2

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TheRussianregimeforE-money

NewlyadoptedNa,onalPaymentSystemLaw

inrespectofelectronicmoneyregula,on

JaneZavalishinaCEO

Yandex.Money


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Russianpaymentlandscape


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Cash-basedeconomy

SberBank,early 90s


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Retailcashtransac,ons:regulatoryperspec,ve

BankingLawmoneytransferviabankaccounts Moneytransfer/paymentwithoutopeninganaccountaddedin1998 Checksarepossiblealthoughneverused.Noseparateregula,ononlyCivilCodeandbankingselementterms

PostalLawmoneytransfer(postalremiances)viapostofficeswithoutopeninganaccount

FederalLaw#5215-IfromJune181993cashacceptanceforfirmsusingcer,fiedcashregisterswithbuilt-incontrolunit

Basicallyacompanycanacceptpaymentsinitsoffice

ifusingfiscalcashregistersandreceivefundssentbycustomersviabankorposttransfer.


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Banksissuedalotofcards

0

20

40

60

80

100

120

140

200920082007200620052004200320022001

Cardsissued(millions)

DebitCards CreditCards PrepaidCards


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Anddevelopedacquiringinfrastructure

0

100

200

300

400

500

600

200920082007200620052004200320022001

Cardacquiringterminalsinstalled(thousandsofunits)

POSterminals ATMs


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Butwes,llarentthere

ThethreebigBUTs:

1. Onaverageeachci,zenhasacoupleofbankaccounts.Butwhatkindofaccounts?

2. Almosteveryonehasaplas,ccard.Buthowdotheyusethem?

3. Impressivegrowthrate.Butisitenough?


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Keepyoursavingsinthebank

Morethan70%

ofindividualbankaccountswere

savingsaccounts.

Soviet-times poster

recommends putting savingsin a bank instead ofkeeping them in a lockbox.

PaymentsystemofRussianFederaCon,BankofRussia


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Theunconsciouslybankedclients

Formanyyearsnearly10%ofplasCccardtransacConsvolumewerepayments,theother90%

beingcash-outs.

PaymentsystemofRussianFederaCon,BankofRussia

Workers queuing towithdraw money from ATMon payday


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S,llnotenough

2249021469 21178

19179 1885518226 17838

17020

11669

7221

2497

Cardacquiringterminalsinstalled(unitspermillioninhabitants)

Source:TheentralBankoftheRussianFederaCon,www.cbr.ru


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TheTerminalsstory(cash-inkiosks)

Re-inven,ngcashpayments


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Late90s:scratch-cards

Retail stores sell piles oftop-up cards


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Early2000s:Internethelps

Internet-based service forreal-time payments inconvenience stores


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Whyemployacashier?

3.Insertcash

2.Inputclientinfo

1.Choosemerchant


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2005-2008:TerminalsBoom

PaymentsOperator

Merchants:

mostly telecoms

Agents:

Thousands ofsmall businesses


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KiosksnowarevitalforMNOs(andviseversa)

89%ofMNOsincome83%ofkioskspayments=

Source:Json&PartnersonsulCng,2010

89%

11%

Kioskspayments

ForMNOs Other

83%

17%

MNOsIncomeCollec[on

Throughkiosks Other


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In5+yearsmostofATMs

offermobiletop-up


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atleasttwiceamonth

withdrawcash

fromandputitinto.

Butpeoples,llprefer


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NoImnotmakingitup:


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Collec,ngpayments:regulatoryarbitrage

Agent

company

Bank

Regulated by Banking Law:

Certified office & equipment

AML Law compliance Full customer identification

for every payment

Regulated by Civil Code:

No special requirements foroffice/equipment/procedures

No customer identificationneeded

Authoriza,on

topayon

customers

behalf

Authoriza,onto

collectpaymentson

Merchantsbehalf(AgentServices

Agreement)


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Terminals:regulatorynightmare

Legalperspec,ve: CivilCodesagentregula,onsBankingLawisavoided Evencer,fiedcashregistersrequirementdoesntapplyanymore Bankshavehugedisadvantageincashpayments

By2009thereare~200000kiosksthat: havehugeamountsofcashinside carryoutpaymentsforbillionsofRubles areusedbymillionsofpeopleeveryday arethemajorpaymentscollec[onchannelforbiggesttelecoms arenotregulatedwhatsoever


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Late-90s:needfore-paymentsinthecashcountry

Problem:

Youcanttakecashfromyourcustomerviainternet!

Solu[on:prepaide-wallets

Veryeasytouse 24/7 Fastcheapandreliable


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Howitworks


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53%

48%

44%

28%

25%

24%

19%

18%

16%

6%

Mobiletop-up

Internetusage(ISP)

Onlineshops

Peer-to-peerpayments

E-,ckets

U,litybills

Socialnetworks

Onlinegames

Digitalcontent(musicvideoebooks)

Finesandtaxes

*TNSsurveyFebruary2011Moscowpopula,onaged18-45

E-moneyisntjustforonlineneeds

Q:Usinge-moneywhatdidyoupayfor(inlastyear)


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PopularityofE-moneyinRussia

E-moneyTerminals Cardpayments

13%

24%

63%

Usedinlast6

month

Awareofbut

didntuse

Notaware

7%79%

14%

16%

29%

55%

27%

19%

54%

SMS-payment

*TNSsurveyFebruary2011Moscowpopula,onaged18-45

E-Moneyisalmostaspopularasbankcards:


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Bankcards

32%

Mobilepayments

2%

WebMoney

8%Yandex.Money

37%

Kiosks

21%

Goslotoelectronicloery,cketssales

Marketshares:virtualgoods

Source:Gosloto,2010


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Marketshares:smalle-shops

Source:RoboKassa,2010

Moneytransfer

2%

Mobilepayments

2%

Kiosks

6%

Bankcards

16%

WebMoney

29%

Yandex.Money

44%

Other

1%

Smalle-shopspayments


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by default

other methods


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Yandex.MoneyDailyPayments

Andcoun,ng


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E-money:regulatoryview

E-wallets

storecustomersmoney

usedforpaymentsnotsavings

mostlyforlow-valuetransac,ons

focusedonremotepayments(internetmobile)

Payment AgentsLaw doesnt apply

Banking Law wouldover-regulate themarket

AML Law changesare needed


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Na,onalPaymentSystemLaw

DiscussionsstartedinFeb2010 LawisadoptedJun2011 InforcefromSept2011 Transi,onalgraceperiodforalreadyexis,nge-moneyissuers,llOct2012


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NPSonE-money:keydefini,ons

Electronicmoney: oneofelectronic(non-cash)formsofmoneyjustlikemoneyonabankaccount

requiresnobankaccount acceptedasmeansofpaymentbythirdpar,es issuedonreceiptoffunds(prepaid)

E-moneypayments: specialtypeofwiretransfers madebyelectronicmeansofpayment(e-walletprepaidcardetc)

Canbeoperatedby banks; non-bankcreditorganiza,ons.

Nowaivers!


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NPSonE-money:BankLite

Newformofnon-bankcreditorganiza,on(NCO):

Authoriza,onandpruden,aloversightbyCentralBank Ini,alcapital~430000EUR(18MMRUR) Limitsonac,vi,es:justpaymentsnocreditnointerestonfundsreceived

Notincludedinna,onaldepositinsurancescheme Ongoingownfunds>2%ofoutstandinge-money 100%ofoutstandinge-moneyinliquidassets


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Physical Person(anonymous)

Physical Person(identified)

Legal entity

Open e-walletNo limits No limits Only entities registered

with Russian TaxAuthorities

No. of e-wallets per

person

No limits No limits No limits

Top-up

bank payment from anypersonal account; moneytransfer; card payment;

cash (+through agents)

bank payment fromown account; moneytransfer; card payment;

cash (+through agents)

bank payment from ownaccount

Receive e-money from Only physical persons Anybody Only physical persons

Pay e-money toAnybody Anybody Only identified physical

persons

Withdrawals

To any personal bankaccount

To any personal bankaccount; by moneytransfer; by cash(+through agents)

To own bank account

E-wallet balance limit 15,000 RUR (~360 EUR) 100,000 RUR (~2400EUR)100,000 RUR at the end ofthe day

E-wallet turnover limit40,000 RUR (~960 EUR)monthly

No limits No limits

!


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Jane Zavalishina EMA Brussels 2011 v2

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