This post is an unabridged version of the post that I previosuly did
The annual gathering of the Emoney Association, that comprises Russia's leading emoney operators announced today industry revenues for 2011. The Association tracks payments done through stored-value wallets accessed via Web or mobile wallets, yet excludes
mobile operators account originated payments, as well as bank mobile banking payments.
Yet enough of this, you should have got the sense of how emoney business goes in Russia (through this blog). What is important, is that a dominant number of payments over the Web goes through these types of wallets and not through banks. A staggering pace
that the industry demonstrates, with over hundred billions of rubles, underlines the importantce and all seriousness that other financial players attribute to it. Another important corner-stone for the industry progress was the enactment of the National Payments
Bill, - on September 29th, 2011.
LegislationDespite the quarrels and horse-trading, the bill is more or less liberal and does not impede innovation, is constrictive and forward-looking. For example, PayPal was noted as one of the beneficiaries of the legislation, that has cleared
its (and many other schemes) way into Russia.
The load of work to go through is still big, as all existing emoney operators got a 1 year free-ride period (to make themselves compliant with the legislation), and several keystone amendments are to be cleared-out, like the amendment on repudiation of emoney
payments, as well as the legal status of prepaid and gift cards, as well as points-based loyalty schemes. They are probably to be cleared through Russian Ministry of Finance «cashless taskforce» procedures, that would clarify their status.
Five new types of banking accounts were created as a direct consequence of the Bill – forcing a diect regulatory-bound innovation for banks, while also creating aditional pressure (the market is suffering a knowledge hunger for emoney and retail payments,
making it both hot market not to be (money-wise) and be in (intellectual-wise).
Another important aspect of the passed legislation is that payment agents (those working with emoney operator / payment system operator can now provide limited authentication / KYC services, thus allowing more flexibility for end-users to get services from
payment operators remotely. The full scope of services relegated through agents is still to be discussed.
BusinessThe Association deems the Bill's good fortune to have resulted in surge of mobile payments and e-government payments that were initiated through wallets – as government agencies are now sure of emoney sector legal status and are willing to
tap into the billions of US dollars that go through them.
As for the billions, Emoney operators posted RUB 125 billion in revenues (top-up value) from RUB 70 billion as of end of 2010 (RUB 40 billion in 2009). The Association has previosuly wished for RUB 140 billion, yet the number did slack a bit (I'd say because
of banks trying to do their job and shipping good mobile banking applications). The presiding spokesman of the Association casted an end to uncotrollable scale growth of the industry, saying that now most initiatives would be driven to raising quality and
«monetizing» on the accumulated customer base. (I will do a full analysis of the type of payments in these 125 billions a bit later)
Emoney wallets have good chances for that, as they continue driving revenues from cash kiosks (my other post on that a bit later) – as they are by themselves portable kiosks (when accessed as an app). One of the reasons for emoney wallets popularity and
volume growth is that it is easy to obtain and use.
Authentication is part of the problem / solution, so it is hard to guess whether banks would undercut the market by offering apps and services with easy enought ID procedures (as strong authentication is part of their DNA). There are currently two Russian
banks, that are testing / preparing their own emoney wallets (Russian Standard and Sberbank), so we would see that soon enough.
Future:Talking about new-found competition (from banks and MNOs), the main point will be not about technology and even not about regulatory barriers – but about reinventing interaction with customers. Yandex Money spokesperson posted some good points
about emoney evolution through the evolution of the Web itself.
As today's Web is ubiquitous and mobile-bound, so money services should be, crossing the charsm between online and offline and assisting with local merchant search and instant payment services. By the way, Yandex is already doing this as it pilots Yandex
money payment from Yandex Taxi application (an application, that allow customers to geolocate and select taxis within their phone vicinity).
Yandex also talked about crowdfunding potential, enabled by emoney. Volumes for 2010 forecasted to be USD 600K #Russia
NFC is (of course) a hot discussion topic for emoney (I would concur, NFC is for offline communication in the world of ubiquitous online), despite the bold talk on egg-chicken problem being solved with dozens of handsets and MasterCard piloting 1000s of
POS in Russia, members of Association think on payment in the cloud type of solution – where they could tap several technical interfaces and be independent of the payment token.
Summing up, emoney industry successes has drawn banks attention to the sector and has accelerated development of mobile banking and e/m-commerce apps, and that serves as a good "halo" effect for all players.
A good day, good future for emoney in Russia.