If you want to get a sense of what the technological future has in store, it often makes sense to take a look at what’s occurring in the developing world. Too poor to keep up with the last several generations of investment, markets such as BRIC countriesBrazil, China, India and Russia are often just getting around to providing many services that richer markets take for granted—and they are skipping ahead to the latest technological developments.
That dynamic appears to be at work in the financial services industry in Russia, where 95% of people lack credit cards and other banking services, according to Frederic Vanoosthuyze, vice president of information technology at MTS, the Russian telecommunications company. In place of those basic financial services, Russians are rushing ahead in the deployment of mobile payments, a technology that has been slow to take off in the U.S., as CIO Journal’s Clint Boulton reported.
“Mobile payments are growing and have huge potential in Russia given the fact that there are few credit cards,” Vanoosthuyze says. Russia is largely a cash economy. Vanoosthuyze notes that there are only 0.1 credit cards issued per person in Russia, just one third the rate in China. Thus the opening for mobile payments.
And as mobile payments enter the mainstream, they will extend financial services to millions of people, as Irving Wladawsky-Berger notes. “In developing economies, mobile digital money could be the ticket to financial inclusiveness and a higher standard of living for billions of people around the world, Wladawsky-Berger wrote in CIO Journal in August. “CIOs and other leaders need to make sure that they are prepared at various levels—from infrastructure to strategy and customer service—for those global differences.”
Russia does have a relatively widespread adoption of smartphones—which exists, in part, because the development of fixed line communications lagged the West for many years. Now one leapfrog technology—the smartphone—is making way for another. “Smartphones gives us a better platform for making financial products like mobile payments a part of people’s lives,” Vanoosthuyze told CIO Journal. Smartphone adoption is still in the single digits in Russia—not particularly high, but still much more widespread than credit cards. Vanoosthuyze says the total mobile payments market in Russia will hit 40 billion rubles ($1.2 billion) this year and triple to 163 billion rubles by 2017.
MTS—which is part of Russian investment firm Sistema and has about $12 billion in annual revenue—has been using the IT infrastructure that supports its telecom business to build a broader mobile payments service allowing its customers to use their mobile phones to pay a variety of bills. The company already has payment histories for millions of customers, which allows it to qualify them for its nascent banking services. That is a big deal in a country where credit scoring services, a key part of the financial infrastructure, have been lacking as well. “The absence of databases for credit also gives us an advantage in scoring people and distributing to our customers financial products,” Vanoosthuyze says.
As CIO Journal reported last week, he has been upgrading MTS’s IT infrastructure to enable the expansion of the mobile phone company into fixed line communications, pay TV, and now financial services.
Since 2010, he says, MTS has used its Easy Payment application to allow customers to transfer money to other accounts, and make so-called “community payments” for utilities such as water, heat, and electricity. The Easy Payment application handles about 125 million rubles a month worth of commerce, and total MTS mobile commerce is 500 million rubles a month. Vanoosthuyze says the total mobile payments market in Russia will hit 40 billion rubles this year and triple to 163 billion rubles by 2017.
Since 2011, MTS has offered a service called MTS Dengi (Russian for money), which allows any smartphone to be used as a mobile payment device. The service includes a near-field communications chip and a credit card. NFC services allow machine-to-machine communications over very short distances—such as the space between a customer and a cash register. They have been slow to take off in the U.S., however, as CIO Journal’s Boulton notes, for a variety of reasons. NFC hasn’t been built into the latest phones, such as the iPhone 5. And merchants haven’t invested in the technology, either
MTS has built a high level of security into the Dengi service, placing it in the phone’s SIM card. Vanoosthuyze says that’s more secure than a smartphone app.
MTS is only part of a wider mobile payments infrastructure in Russia. Two companies—Q/WI and Chronopay—operate so-called “corner terminals,” booths that can be found in shopping malls, underpasses and transportation stations. These machines accept cash for a range of bills, such as utilities or pay TV services, and then wirelessly transmit the credit to the user’s account, according to Vanoosthuyzse. Many ATMs provide a similar service, he said.
As Wladawsky-Berger notes, the arrival of digital mobile payments on a global scale will be as transformative as the rise of the credit card business was in the 1950s. And much of that change is beginning now, in Russia and other developing markets.
Liens partenaires :Liens partenaires :
plug in Magento et Prestashop pour caisse enregistreuse et commerce de proximité
plug in Magento et Prestashop pour caisse enregistreuse et commerce de proximité
plug in Magento et Prestashop pour caisse enregistreuse et commerce de proximité
plug in Magento et Prestashop pour caisse enregistreuse et commerce de proximité
plug in Magento et Prestashop pour caisse enregistreuse et commerce de proximité
plug in Magento et Prestashop pour caisse enregistreuse et commerce de proximité
plug in Magento et Prestashop pour caisse enregistreuse et commerce de proximitéLabels: Business development director mobile payment Russia; Vice President mobile payment asia; swiffpay europe: VP business developement europ mobile payment, m-pos EMV Level2, PCI DSS, PCI PED
