What is your company’s vision?
WebMoney Transfer is the global settlement system and environment for online business activities. State-of- the-art technical solutions provide high level of security for p2p, p2b and b2c online transactions without any geographical limits.
What challenges has the company faced since its foundation in 1998?
Ironically, first transactions in the System took place shortly after “Black Tuesday” – the day in November of 1998, when Russian markets collapsed leading to a default of the country’s bank system. People didn’t believe banks again, so it tuned out that alternative payment solution arrived just in time. The challenge was launching something completely new and unique on the market which was as well in its initial phase.
What are the advantages and disadvantages for a consumer in using WebMoney Transfer services?
We provide immediate irreversible transactions with no charge-back risks for a very low fee. Necessity to install specialized applications and software might be seen as disadvantage, as they are bound to one device.
In April 2011, you have introduced your top-up services in France and Netherlands. Do you plan to expand these services to other countries in Europe? What about worldwide?
Absolutely! We have recently launched in Vietnam and now strategically focus on Pacific Asia and Latin America. Emerging countries are our core markets, so the growth rates outperform bank products as we focus on unbanked audience.
You are currently offering 6 Purses each of them supporting a different currency. Do you plan to extend introduce new Purses/currencies in the near future?
As stated above, Vietnamese Dongs are now live, more currencies from Asian and Latin America regions will follow shortly, as well as local CIS (ex-USSR countries) currencies.
What systems/measures have you implemented to prevent online fraud attacks during online transactions?
It is not a secret that credit cards were not designed to be used online and essentially not protected. By paying with a bank card online, you only transfer payment details via this or that channel, which makes this data extremely vulnerable to all types of fraud. Our transactions are first of all irrevocable, which protect a merchant form charge-back risks; when transaction is performed, various sorts of cryptographic means are triggered- keys, challenge-response values, biometric hardware, etc.
What other payment systems in Russia do you consider to be the main competition for WebMoney Transfer? Why?
As we have explained above, we operate mainly in emerging markets and developing countries. We can say that our main competitors are a) cash and b) bank (i.e. cashless) payments. Russia is definitely a cash economy. We have a unique payment landscape: from one side, “banking” and financial culture is very low; from another- cash gave birth to a phenomenon called cash-in kiosks (or terminals), which you can hardly meet outside Russia and CIS (ex-USSR countries).
In 2010, the Russian government approved new e-money regulations according to which e-money operators have to get a license from the Central Bank applicable to non-banking credit organizations. Could you provide more details on these regulations and what impact will they have on the e-money market in your country?
New regulation resembles rather a US model, than a European one. Unlike European Payment Directives (that clearly set up a definition of “e-money issuer” and requirements towards issued obligations/liabilities as to storing/providing equal amounts of live currency on specialized secure accounts), Russian e-money law doesn’t have a term “Issuer”. It will operate not obligations or liabilities in any other (electronic) format, but money itself. New regulations change the current environment so seriously, that it affects not only all payment industries and financial instruments (both offline and online), but requires all banks to update (re-apply for) their banking licenses. We welcome these changes and consider them as healthy measures, that will do market good.
What is your opinion about the current status of Russian online payments field?
The industry is overall very well developed technically. WebMoney itself pioneered many solutions that are now industry standards globally. For example, we had a mobile payment solution launched in 2003, ahead of mobile applications rocketing all over. Our E-num application- an authorisation tool that uses single-session challenge and response values is live since 2005. All payment technologies keep developing fast all over the country.
According to a report commissioned by Google, spending on online shopping, internet access and web devices like laptops and mobile phones will grow 26 percent annually in Russia until 2015. Do you think that it is a realistic prediction taking into account the fact that 95% of payments are made by cash?
Yes, it is still a cash country. Payment habits are part of a culture and cannot change fast. But cash is almost useless when it comes to e-commerce or “digital/virtual economy” – travel (almost all air travel covered by e-tickets), entertainment, software, etc. And we grow together with these industries.
Where do you see the Russian online payments industry ten years from now?
Because of the crisis waves, the whole world is now living from one expectation to another. Yes, deposit, credit or other financial activity might slow down, but not the demand for settlements and other social relationships. People in Russia as well tend to consume more. As soon as we are living in the internet society, we only see huge growth potential in our future.
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