nfc prospects in emerging markets: case of russia (english)
TRANSCRIPT
Victor Dostov
Russian Electronic Money Association
NFC Prospects in Emerging
Markets: case of Russia
CEESCA Meeting, Portoroz, 20-21 September 2012.
Russian E-Money Market: going upward
1000
1700
3000
6000
0
1000
2000
3000
4000
5000
6000
7000
2009 2010 2011 2012 (projection)
Millio
n e
uro
Russian E-Money Industry Turnover
Russian Electronic Money Association, 2012.
Russian E-Money Market: going upward
Russian Electronic Money Association, 2012.
Active ‘e-wallets’, mln.
20 30 34
2009 2010 2011
Basic technologies
E-Wallets for online transactions
Mobile phones for small payments
from pre-paid mobile account
Payment kiosks for offline
‘insert cash’ payments
Innovative offline interfaces
Payment kiosks
1. Choose a service 2. Deposit cash 3. Payment is done
Innovative offline interfaces
Payment kiosks
Installed virtually in every
retail shop, business
center and sometimes on
the street, number of
payment kiosks is
estimated around
250 000
Important note:
Customers are paying from their prepaid mobile account
and not from their bank account
Mobile Commerce in Russia
Topping-up
mobile phone
account
Money on mobile account
transformed into e-moneyE-Money may be used for P2P or
P2B transactions or forwarded to
money transfer system
Regulation environment growing strong
Pre-2009 era
• Regulation is mostly circumstantial
2009 • Law on Payment Agents
2011• Major Breakthrough:
• Federal Law “On National Payment System”
Federal Law “On National Payment System”
Legal Definition of „electronic money‟
Expansion of agents‟ functionality
Legal Framework for the sustainable evolution of the market
• Supposed to complement and substitute ID
• NFC-enabled
• Includes multiple applications:– Payments
– ID
– Driving License
– Access control
– Digital signature
– And many others…
Universal Electronic Card
• Limited distribution from 2013
• Distribution via Government Services
Centers, Russian Post
• 50/50 public and private financing
Universal Electronic Card
Universal Electronic Card
?Bank card
Electronic ID
State services website
credentials
Innovative projects
Government agencies started to compete with their
own electronic card projects.
Few are willing to cooperate.
Result: many ideas and no product (yet)
Interfaces and technologies complement each other
From diversification to hybridization
From hybridization to „cloud-ization‟
• Funds easily „migrate‟ between
instruments and can be
managed anytime, anywhere
Bringing part of the cloud to the offline world (which may still lack universal connectivity)
Where does NFC stand?
NFC-enabled
phones
NFC-enabled
cards
NFC-enabled
kiosks
NFC is more than payments
Identification vs. payment function
• Cloud and universal connectivity brings identification issue into
focus
• Getting reliable and remote answer to ‘Who You Are?’ question is a
key to the provision of innovative and comprehensive financial (and
other) services
Technological impetus
to the contactless ecosystem?
„Injecting‟ NFC into existing solutions
Making contactless experience matter
• Speed
• Security
• Convenience
St-Petersburg Underground: from magnetic stripe
to stored-value contactless Oyster-type card
Making contactless experience matter
Potential contactless hybrids?
Square PayPal HereiPay
Contactless ecosystem: where do we start?
Customers (NFC mobile, NFC cards)
Point-of-sale (POS terminals)Additional functionality
(transport, access, ID, loyalty, etc.)
Victor DostovPresident of the Russian Electronic Money Association
+7 921 963-85-15
www.npaed.ru