Maxim Ivanchenko, Canopus IT Director General, Advapay project founder
In my opinion, there are at least 4 main reasons why it makes sense to create a payment business in Europe.
Capacity of the market;
Significantly better investment climate;
"Globalization". We place the last reason in quotation marks because the used term in this case is quite conditional and requires explanation.
Now let’s take a closer look at each of the reasons. Back in 2009, the so-called 64th European Union Directive regulating the activities of payment operators has started to work in the EU. Before that, in different European countries there were local laws
regulating the activities of this kind of companies. In particular, in the UK, there was a law regulating the activities of the MSB.
Federal Law "On the National Payment System" (161-FZ) was adopted in June 2011. I have personally seen the literal translation of the 64th directive on the website of the Central Bank of Russia as soon as it was adopted, that is, about 2008 (the law was
adopted in 2007). So, it is obvious that our Central Bank experts have carefully studied this legislative act.
However, if we compare these two legislative acts - the Russian and the European - it becomes absolutely clear that European law and Russian law, from the point of view of the opportunities offered by licensed payment companies are simply incomparable!
As mentioned, everything possible was cut and limited in Russia.
At the end of last year, I met with one distinguished man who is directly related to the development and adoption of the Federal Law 161. I got the same direct answer to my direct question on why there was no similar law simply established to the 64th directive
in Russia: they wanted, but the banking lobby did not let them.
To be fair, I should mention the fact that in this regard everything is not so perfect in the EU, as well. The banks are very wary of the new, often more flexible and technologically advanced players of the payment services market. Although, the regulator
does not follow the banking lobby. By the end of 2018 the new version of the Payment Directive - PSD-2 will come into force across the EU, which will significantly enhance the ability of payment companies and adjust their relations with banks at the legal
The second factor that I have mentioned is the capacity of the payment services market. Undoubtedly, the capacity of the European market is not comparable with the capacity not only of the Russian market, but also of other countries of the former post-Soviet
space altogether. And it is not only about population. The size of the Russian economy, if I am not mistaken, is about 7% of the size of the economy of the united Europe. And if we take into account the level of penetration of the banking and payment technologies,
the level of the financial literacy of the population, if you choose so, I think this comparison will obviously not be in favor of Russia and CIS countries, as well.
Of course you can argue that it is necessary to take into account the higher level of competition. Yes, this factor is difficult to argue. But I think that in this case we should not be afraid of competition. We have to be at the height of modern technologies,
to attract the best professionals, consultants, managers and to create a competitive payment business, which will be in demand all over the world.
Regarding the investment climate, I think, it is not necessary to give too detailed comments. A lot of things are being said and published about this nowadays. Unfortunately, the facts that we are facing in our economy and in particular in the banking and
financial sector, I think, are not very encouraging.
In my opinion, the discussions about the taxes lower than in Europe, do not stand up to criticism. The point is not in the amount of taxes, but in their structure. When many things cannot be attributed to costs, even a flat income tax rate schedule of 13
% does not help.
The massive "shooting" of the banks does not encourage optimism, as well.
Creation of own payment business in the EU could be a good alternative, or at least, an additional opportunity to these people.
Finally, the last factor that I have mentioned is "globalization". I'll try to explain what I mean by this term in the context of topic of our conversation. Russian business seeks more and more to integrate into the global economy. Russian beneficiaries
buy and register the foreign companies, including in Europe. In some cases, the use of the licensed payment companies for cross-border financial transactions seems to be highly effective. And we have some experience in making such decisions.
Another point relates to the fact that in many European countries there is a quite large Russian-speaking expat community, including people who still have a Russian citizenship. Quite a lot of Russians live in the Czech Republic, Germany, Great Britain and
other European countries. This means that we can offer payment services to these people, focused on Europe-Russia cross-border transfers and vice versa.
I would like to give you an example quite interesting from my point of view to illustrate how such a system might work. However, it is not about Europe but about the United Arab Emirates. About a year ago one entrepreneur from Novosibirsk, who had already
been living in Dubai for a few years with his family, contacted us. It turned out that there is a quite large Russian expat community in the UAE. Some people live there only part time. People buy property there or rent housing. In any case, they have two constant
problems: payment of the utility bills at that time when they are physically outside the UAE and receiving rental payments from tenants when they lease the purchased property. We have proposed a fairly simple solution: to create a payment service on the basis
of a licensed payment company, whose clients would be individuals, property owners and tenants, on the one hand, and on the other - legal entities: managing and service companies in the sphere of housing and public utilities. Such a decision could be relevant
to any country where there is a large percentage of the real estate purchase by foreign investors: Spain, Bulgaria, Cyprus and other countries.
Benefits of payment business in Europe to Russian customers.
Building of payment business in Europe gives various advantages to Russian customers. Firstly, it is a new market, much more capacious than the domestic market of Russia and CIS countries. Secondly, this is a market with clearer rules and an improved legislative
Creation of payment business in Europe gives our customers a tool enabling to solve a number of new challenges that cannot be solved only with the help of the Russian companies, banks or NSCA, or at least a tool to do so more effectively. Finally, there
are a number of "niche" applications to these solutions for various branches of payment services, such as cross-border transfers or payment of services in other countries.