According to the National Bank of Belarus, electronic payments are actively developing in the country.
As of 1 October 2015, the share of non-cash transactions amounted to 76% in number and 30.9% in the payment volume.
Belarusian banks issued over 12 million cards, 5.5 million of them under Visa brand, world's largest electronic payments operator.
Just recently at Minsk Business Meetings Visa representatives announced the intention to promote mobile payment the CIS region.
BelTA met with Mandy Lamb, Group Country Manager for CIS & South-Eastern Europe, to talk about electronic payments and payment innovations Visa is ready to offer for consumers in Belarus.
Minsk hosted Minsk Business Meetings for the first time last week. Visa took part in the Forum. What are your expectations?
Visa representatives were speaking both at the plenary and technological sessions. We used this platform to present an overview of Visa's innovative payment solutions and technologies to CIS banking and finance community.
Those payment innovations are already in place and can be implemented in CIS and Belarus in particular. We believe this is a very important networking platform in CIS and many Visa client-banks and regulators attended the Forum.
Visa also became a sponsor of the plenary session. As was mentioned at Minsk business meetings, nowadays 77% of people would never leave home without their phone, so the future, including electronic payments, is in mobile technologies.
In the CIS countries, consumers often use Visa services on their mobiles, and we think mobile technologies will be developing rapidly in future. Visa's goal globally and in the CIS and South-Eastern Europe is to enable reliable, secure and convenient payments for businesses and consumers in the ever-changing economies, as well as to contribute to the development of non-cash payments.
We cannot predict how the future will look like, but we think that the future is in mobile technologies and software. Therefore, we continue to provide the best opportunities for consumers to pay and be paid – everywhere and anytime convenient for them to continue to lead electronic payments agenda.
What innovative solutions did Visa present at the Forum?
Those were actually three important things that Visa talked about at the Forum. Number 1 is tremendous responsiveness of the market to electronic payments. The second thing is the active support of the National Bank of Belarus in driving the electronic payments. The third component is the technology that is coming into the market. If I jump to the technologies, there is plenty of opportunity in this market and there is plenty of responsiveness and readiness from financial institutions for new technologies.
So some of the new things that we will be brining to Belarus are Visa Direct, P2P money transfer service which is already offered and is working to some degree but we are hoping to expand further. It allows Visa cardholders to quickly, securely and conveniently send and receive money from Visa to Visa, using a variety of channels: kiosks, ATMs, internet banking. Tremendous opportunity here for consumers and for business in Visa Direct space. The second piece is around mobile technology. The penetration of mobile phones and smartphones is high in Belarus within a consumer segment and we see here an opportunity for more efficient, safe and secure forms of payments for the consumer. One of those technologies is Host Card Emulation. HCE is a very popular topic all around the world and the good thing is that it is coming to Belarus. It has already been done in CISSEE region before. It offers a tremendous opportunity for this market. Using cloud technologies banks may issue payment cards in a digital format and upload them directly to consumers' smartphones; and consumers, in their turn, pay with their phones the same way they would pay with their payment cards. The next one is Visa payWave. It was already launched in Belarus and the technology allows consumers to do “tap and go” contactless transactions, even without entering PIN code and signature for small ticket transactions (equivalent of approximately US $25). This simplifies the payment process for both a cardholder and a merchant. We believe that Visa payWave technology can drive the usage of electronic payments and we are really working with local banks to make Visa payWave more integrated into Belarusian electronic payments. We have six banks which are fully certified for Visa payWave issuing and acquiring in Belarus. Mandy Lamb and Tatyana Ivanyuk I would like to go back to the cloud payments.
When do you expect HCE to be launched in Belarus?
Speaking about the CIS and South-Eastern Europe, HCE has been launched successfully in Georgia and Serbia. It is where the market is ready for such innovations and banks are ready to offer mobile solutions to consumers. At a later stage we can have tokenization coming, which is generating those random digits presented to the merchant for security. HCE is something we are actively working with some of our key partners in Belarus and within the next couple of month we should see the first pilot if not full launch of HCE. So, Belarus would probably be the third market in the region to launch HCE.
What is the share of Visa payment cards in Belarus currently?
Has it increased and what is the dynamics?
If yes, what factors helped Visa to grow its business?
This market is showing very strong growth in payments. If you look at the total market as published by the National Bank of Belarus when it comes to card payments, over twelve million cards issued for the population of nine million people, which is a very high penetration of payment cards within the market. Visa has been an active partner in Belarusian market for many years and as result working with our banks we have grown steadily and this year we have reached double digits growth of the market share. The reason that we have been strong at that space is Visa brand, which is very recognized in this market. We have strong partnerships with banks in Belarus which allows us to use this platform to innovate electronic payments space in Belarus, open up the acceptance network and actively work on financial literacy all the time. All these factors contributed to the overall growth. In terms of year on year growth (we are comparing Q2 of the financial year 2015 to Q2 of the financial year 2014), payment volume on Visa cards grew by 19% in Belarus. Moreover, we continue to see very strong growth year on year. And there is still a lot of potential.
What are your expectations for the financial year 2016?
As for this fiscal year as a whole, which ended 31 September 2015, the results are not yet available. The projections for the market are positive, and, based on current numbers, in the next financial year we expect a similar growth, or even higher. Now it is only a forecast. As it was previously reported, Visa is launching financial literacy program in Belarus, which includes public talks, online resource with the Association of Belarusian Banks, and media engagement.
What initiatives have been launched already and what else do you have in store?
A number of initiatives supported by the National Bank and the Association of Belarusian Banks have been successfully implemented. We are doing more, we are starting Financial Football program again. So you will see more activities on the ground related to the financial literacy. The second piece is our partnerships with the banks and the new technologies. And the third piece is an ongoing work that we are doing on the marketing side. In particular, we are launching promo campaign with Evroopt to promote Visa payWave contactless payments in December 2015. Together with our client-banks in Belarus, we will run a campaign aimed at promoting the use of cards while traveling abroad. There are also specific activities with some banks that we do to help them to drive their business objectives. These are some examples of our initiatives. During the interview In Belarus there is very strong infrastructure from a merchant perspective, very wide spread POS network, which allows consumers to use their cards almost everywhere. The credit goes to the acquiring banks and once again, this is because the National Bank encourages merchants to move to the electronic payments. We continue to do work with those merchants in segments like supermarkets, utility payments to make sure that consumer are using their products everyday and if they use it every day they are likely to use it for domestic and international payments or bigger purchases and everything moves towards the cashless.
What are the other innovative payment solutions, which are sure to come to Belarus, but may be in a longer perspective?
There are two, which are important at this stage. It would be fair to say that the first one would be e-commerce technology Visa Checkout and the growth of e-commerce is going well in Belarus, people are shopping online locally and internationally. Across the world Visa has launched a solution for on-line shopping, which is safer, faster and more effective means for consumers to load their data in the system within Visa and shop quicker. We are very hopeful to bring Visa Checkout to Belarus in the medium term. The second piece is around mCommerce and eCommerce and this is where tokenization comes in. As opportunity shift to online or remote payment, consumers need to feel safe from the risk of potentially exposing their card details, particularly when they are using their mobiles for payments. Tokenization takes off all the sensitive data and moves it into the cloud and then when you make a payment on your mobile it presents random digits for authenitification. Visa Tokenised payments are secure and consumers can pay with confidence, without fear that their personal data or money can be stolen. And what helps to bring this particular solution to Belarus is a high penetration of smartphones (40%)
In your opinion, what is the potential of the Belarusian market in terms of cashless payments?
A better way to show the potential is PV/TV ratio, which shows what is the total amount of consumer spend happening in electronic payments relative to the total volume. PV/TV ratio in Belarus is around 30%, which means that out of Br100, Br30 is spent on cards, the rest Br70 is still cash. Therefore, there is a huge 70% opportunity for growth and we are committed to grow the share of electronic payments in the country. And this aligns very well with the National Bank of Belarus objective of driving a cashless economy. They set a target by 1 January 2016 that 50% of the total market will move to cashless or electronic payments. That is another reason why this market is showing such strong PV/TV and growth because of the commitment of the national bank to drive non-cash payments
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