Currently at the legislative level, consider the idea of regulation of the Commission for cashless settlements with use of Bank cards. About how it may affect the dynamics of the rates in the sphere of acquiring, as well as new initiatives in this segment, the second assets of a Russian Bank in an interview with RIA Novosti said the Vice-President, head of acquiring VTB Alexey Kirichek.
— At the beginning of this year, the head of the Central Bank Elvira Nabiullina expressed concern about the high level of monopolization in the sphere of acquiring. How is the market for Russian banks? What proportion of the controls VTB?
License acquiring have about 500 Russian banks, but by and large consolidated the market between multiple players. According to information of payment systems, our share by 2018 is 14%. In addition to VTB, the key players in this sector are the three largest Bank and Russia’s largest independent processing company.
— Could you tell me what is the rate of acquiring?
The major share, about 95%, is interchange is that the Bank gives the payment systems for the transfer to the issuing Bank of the card. In addition, the payment system still hold the processing component FEE (Commission payment system — approx. ed.). The remaining 3-4% is the cost of the equipment and service: compensation depreciation of terminals, processing services, maintenance of networks. If the shop buys the equipment on your own, then it can expect a discount of 0.05 — 0.1 p. p. to the tariff. Previously, it could be more, but in recent years has increased the average turnover of the terminal and interchange, and equipment, on the contrary, fell, and his share in the commissions declined.
— What is the average rate at VTB in this area?
In fact, it is small. For grocery retail our rate is 0,7 — 0,8% for small grocery chains — 1,2 — 1,4% for non-food trade from 1.6% to 1.8% for Internet-acquiring — 1,8 — 2%. We also provide batch services for small business when acquiring is in combination with SCS (settlement and cash services — approx. ed.). In such cases we have a single rate is 1.6%, which is lower than the market rate of 2%.
— Do you think the bet size is too high and acquiring it necessary to legislate it? If so, what it may lead?
If you compare with foreign markets, there are examples of both higher and lower rates. In my opinion, the current rate is the result of the market evolution. They appeared to have varied in a competitive environment — some have grown, some have diminished. For example, a qualitative decrease was observed in retail, when it was introduced a special program for large retail chains became available the rate of 0.5 — 0.6%.
In the process of legislative changes it is important to avoid the opposite effect and do not inhibit the development of Bank sphere. This trend we have seen in 2015, when Europe has imposed such restrictions. Average rate became lower, but the flow of calculations in the “clearing” stopped. According to the international statements, if Russia dynamics of transition in non-cash turnover is 4 to 5% per year, in European countries, the movement does not exceed 1%. By the way, we have already overtaken Europe in the share of cashless payments, and in the future will break away even more. Also the reverse effect of regulation is the emergence of paid services for individuals: Bank statements, minimum account transactions, opening cards, etc.
— Will the reduction in commissions to increase the cost of banking services and/or reduce kesbeke? How can you reach a compromise with the business?
— As practice shows, in markets where regulation was introduced, banking services have to be paid, ranging from the cost of annual servicing of the card and ending with the simplest operations. This significantly degrades the attractiveness of cards — changed the loyalty program, decreased accrual of kushbakov and miles, and customers come back to cash or kept one card. This observation, which was confirmed on Western markets.
But compromises are possible. In our practice there are cases when we, together with the company were in negotiations with payment systems, special rates. Agreement has been achieved as we have developed a program to promote card acceptance: spent retrofitting the entire infrastructure in which the terminal was proposed as the first method of payment. We placed them in front of the cash register, in the short sight of the buyer. After this, the share of non-cash purchases jumped up by a few percent in one month.
In addition, we are always willing to respond to offers of payment systems on establishment of a joint loyalty program. This is a common situation for restaurants, for example, when the payment of the premium card involves getting discounts from 10% to 20% that strongly motivates customers to cashless payment.
Card payment system which you have connected to its acquiring network for the last time?
Last year we finished the roll-out (opening network — approx. ed.) for American Express and China UnionPay. And hooked up a new nicarthy method — wallets Alipay. Now tourists from China can their smartphones to pay for purchases in a large segment of our network and we will continue to develop in this direction. Any new system of to connect now there is no need, since the set of the five current — the “World” MasterCard, Visa, China UnionPay, American Express, plus the wallet Alipay is a fairly competitive set compared to other acquirers. It covers more than 99% of the traffic on the Russian market of cashless payments. Moreover, substantial amount of alternative cards on the market just yet.
— A month ago, Visa increased the limit on credit cards without entering the pin-code up to 3 thousand rubles. You previously stated that you support this increase. At what stage of the upgrade implementation?
We immediately spent all the necessary settings and implemented this feature. I hope that soon all banks that will also make the client have the same perceptions and he did not think, where should and where should not enter a pin. In fact, even the previous limit of 1 thousand rubles were closed basic need, as the average bill is 800 rubles. But we understand that there is a layer of charges on him, and we are interested in the bar was higher. This innovation removes barriers: at least, it is not necessary to remember a pin, to which the company seeks to come in the near future. After all, automated payments via smartphones gradually wean people use of a pin code, replacing it with FACE ID or Touch ID.
Visa also announced that it plans to introduce a new way of cashless payment, in which entrepreneurs can use as a payment terminal mobile phone. You, in turn, said that testing such a service. Can you tell us more about it?
— Indeed, there is a prototype of such a service, and we analyze how we can simplify the business process for clients. The main goal is to avoid the use of unnecessary equipment and replace it with a smartphone app. It will be interesting courier services, taxi, private entrepreneurs. It is that the requirements of the payment system we are forced to physically contact the acquiring with the client, to examine documents of legal entities, register it and so on. So we are looking for a compromise in which, without breaking any rules, you can simplify all these procedures. In this case, the installation application on your smartphone is a great solution, as it is already familiar to the public service. If you, having made a couple of actions in your device, will be able in a few minutes to accept payment, then this would be a breakthrough.
VTB began acquiring turnstiles at all stations of the Moscow metro and is engaged in providing cashless payment in ticket offices and vending machines. How important is the project? And than it are interesting to people?
VTB has started cooperation with the Moscow metro a few years ago. This spring we completed a major project for the modernization of the turnstiles. Provided their equipment for cashless payment of fare by credit card, and other devices with contactless technology. Now all stations at least two gate, each lobby is equipped with such readers. Pass by impossible — they are covered with special stickers. We worked a lot on the transaction rate, because to compete with the “Troika”, which opens the turnstiles instantly, is not easy. After all, if authorization of a credit card would last 5-6 seconds, for the passenger it is long. Now the process of fare payment and opening of turnstiles takes a maximum of 2 seconds, but our goal is to bring it to one.
The main advantage for passengers — it is now possible to travel without buying a ticket. It’s enough to make your Bank card with contactless payment function to the turnstile reader. You can also conduct a transaction with the bracelet, smartphone and hours that support payment services Samsung Pay, an Apple Pay or Google Pay. After that, from the customer’s account will be debited the amount equivalent to the cost of a trip on the subway. Another convenience of this innovation is minus one card in your wallet. For those who drive occasionally, the “Troika” definitely will not need a ticket for one trip costs 55 rubles, by credit card — 42 rubles, which is a third cheaper. But if you pay for the pass card loyalty program with kasbeam 5%, you will be back 2 rubles. Accordingly, the cost will be 40 rubles, which is quite close to the rate of the “Troika” — 38 rubles.
— What is your interest in this project?
First of all the turnover. But most importantly, the project teaches people to pay off the card constantly. They used to use it for big purchases later, when the terminals have appeared in convenience stores, have to pay for each product. And the introduction of a payment card for transportation services will lead to the fact that it will always be used. Especially if it is tied to the smartphone. Currently, it is a strong driver of non-cash payments, which separates the customer from the cash behavior, which is useful for the entire economy. This is confirmed by statistics of the past years — payments with a smartphone already accounts for 17% of non-cash transactions. This proportion was recruited from scratch a little more than a year.
— Tell us about the service of cash on cards of other banks in the ATM network of VTB?
— In April we launched this service at their ATMs. Now customers absolutely all Russian credit organizations will be able to Deposit cash into your account through self-service devices in branches of VTB.
Few banks do this because, as a rule, all strive to develop a network for their customers. But some time ago we noticed that the load on the ATM network decreases. This is linked to the trend flow in non-cash payment, respectively, of cash from operations becomes smaller. I’m talking about removing, and introducing. Users have already found ways to do this without getting cuts on the hands, for example, making a p2p transfer. The first thing we did was offered good conditions for withdrawing funds, and also raised the limit on cash withdrawals of up to 100 thousand rubles for clients of other banks. This is a very rare offer in the market. Accordingly, the next logical step was to start Deposit funds to cards of other banks. If there was any need (I forgot to make a mortgage payment or just need to recharge the card), the customer is no longer need to search the device of your Bank. Most ATMs tend to support only the function of issue. Our network of prominent, high-quality, on receiving funds we have a nearly 7 thousand devices.
— And the fee for this service is?
— At the start, yet the client will have to pay for the service. The Commission while making cash to holders of VISA and Mastercard is 1% (minimum 20 USD), for the card “the World” for free. The main goal of the project is to provide quality service that guarantees almost immediate receipt of funds. So we are ready to make it completely free and is already in talks with other banks about this possibility. We are trying to reach agreement on which the Commission will take on yourself the Bank on whose map made money. We have a similar practice is at issue: customers do not pay for receiving funds. The interest of both banks is that this feature allows them to invest in the development network. People service still need, and to develop and contain the network expensive. Therefore, if trade-offs are possible, all do it with pleasure. On introduction we expect the same: key players come to agreement that the client will be able to pay bills for free. While we are on the levying of a fee notice on the ATM screen that always gives you the opportunity to refuse the operation.
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