retail payments in russia: closing the infrastructure gap
TRANSCRIPT
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
1/30
Retail Payments in Russia:
closing the infrastructure gap
Speaker: Jane Zavalishina, CEO
Yandex.Money
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
2/30
Russia: Enormous and Uneven
140 ,000,000 citizens
17,000,000 km2 area
1100 cities
9 time zones
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
3/30
Russia: Enormous and Uneven
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
4/30
Moscow
10,000 / km2
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
5/30
Evenkia reg.
0.03 / km2
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
6/30
More than 300 000 times
Moscow
10,000 / km2Evenkia reg.
0.03 / km2
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
7/30
Banking: also very different
Alfa BankSberBank
most socially oriented most technologically advanced
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
8/30
Cash-based economy
Until 1990s, only one retail bank (state-own SberBank) existed
Early 90s:
To pay for public services: SberBank only
To pay for private companies: also SberBank, because it has much
more offices than any other bank
Private banks appeared, but arent used for retail payments
Retails payments were mostly made in cash:
Employees are paid in cash
Its much more convenient then using bank services
Huge amount of unofficial deals
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
9/30
SberBank, early 90s
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
10/30
Banks issued a lot of cards
0 20000 40000 60000 80000 100000 120000 140000
2009
2008
2007
2006
2005
2004
2003
2002
2001
Cards issued(thousands)
Debit Cards Credit Cards Prepaid Cards
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
11/30
And installed a lot of acquiring units
0 100 200 300 400 500 600
2009
2008
2007
2006
2005
2004
2003
2002
2001
Cards acquiring infrastructure(thousands of units)
POS terminals ATMs
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
12/30
At a glance
January 1st, 2003:
Bank offices: 85 per 1 million people
Individual bank accounts: 267,2 million
Bank cards: little over 100 per 1000 people
January 1st, 2008:
Bank offices: 289 per 1 million people x5
Individual bank accounts : 434,7 million x2 Bank cards : 728 per 1000 people x7
Source: The Central Bank of the Russian Federation, www.cbr.ru
http://www.cbr.ru/http://www.cbr.ru/ -
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
13/30
On the flip side
The three big BUTs:
1. On the average, each citizen has a few bank accounts.But which ones?
2. Almost everyone has a plastic card.But how do they use them?
3. Impressive growth rate.
But is it enough?
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
14/30
Keep your savings in the bank
On the average each citizen has a fewbank accounts. But which ones?
More than 70% of individualbank accounts were savings
accounts.*
Traditionally, people dont see thebanking account as a payment
instrument, but as a means of savingmoney.Soviet poster that recommends
putting savings in the bank
instead of keeping them in socks.
Source: The Central Bank of the Russian Federation, www.cbr.ru
http://www.cbr.ru/http://www.cbr.ru/ -
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
15/30
The unconscious clients
Almost everyone has a bank card. Buthow do they use them?
For many years nearly 10% ofplastic cards transactions volumewere wire payments, the other 90%being cash-outs.*
The majority of card holders: Didnt choose to open a bank account
Didnt choose the bank it is at
Get paid via the card and make full cash-out atthe ATM
Dont use if over the internet, because they areafraid to lose all their salary at once
ATM on payday
Source: Russian payment system in 2007, CB of RF, www.cbr.ru
http://www.cbr.ru/http://www.cbr.ru/ -
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
16/30
Still not enough
2249021469 21178
19179 1885518226 17838
17020
11669
7221
2497
Card acquiring terminals installed(units per million inhabitants)
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
17/30
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
18/30
Mid-90s: in need of retail payment services
The new solution soon spread out: scratch-cards for prepaid services
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
19/30
Late-90s: Internet helps
Scratch-cards problems: Logistics
distribution across a huge country
High merchant threshold there isnt enough room to
showcase every card
Large expenses the retail network takes 10-20%
of cards cost
Solution:
Internet-based service for real-timepayments in convenience stores
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
20/30
Why do we need a cashier?
Insert cash
Input client infoChoose merchant
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
21/30
Terminals appear and develop
Scalable scheme created in 2005 and the terminal boom began:
Sub-agents
Payments
Operator
(Merchants Agent)
Merchants
Payment operators:
1. Agent agreements with merchants
2. Automated billing
3. Terminals manufacturing and selling/lending them to sub-agents
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
22/30
Terminals: DIY business
Find a good spot (like a corner shop) and rent a 1 sq. meter
Rent or buy (approx. 2500) the terminal
Sign an agreement with the operator as sub-agent, receive the
software and gain the ability to accept payments for all merchants
of this operator
Collect your money (fee)!
Right now there are around 400 000 of these machines,
the majority belonging to small businessesor private entrepreneurs.
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
23/30
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
24/30
No, Im not making this up:
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
25/30
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
26/30
Cashflow
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
27/30
E-money goal now
Customers bank account Merchant
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
28/30
Case study: Alfa-Bank
We linked Alfa-Bank and Yandex.Money accounts.
First year results:
About 100 000 clients linked their e-wallet totheir bank account
Turnover of this project exceeded 2 billionRubles (approximately 60 million USD)
Customers spendings in Yandex.Money grow3-5 times after linking to bank account
For the bank this means profit instead ofexpenses!
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
29/30
70%
10% 12% 8%
45%38%
10% 7%
Cash on delivery E-money Credit Card Bank transfer
Preferred online payment methods:
2008 2009
E-money in Russia today
E-money market in Russia in 2009: approx. 10 million registered users approx. $1 billion turnover e-money more popular than credit cards
Source: Romir, 2009
-
8/7/2019 Retail Payments in Russia: closing the infrastructure gap
30/30
Questions?
+7 (495) 739 23 25
mailto:[email protected]:[email protected]