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Not Too Fast: E-Wallets Won't Replace Payment Cards

29 Jun 2017 5:57 PM | Nikolai Pavlov (Administrator)

On the sunny morning of June 29, CFA Association Russia held a business breakfast in partnership with the Internet Initiatives Development Fund (IIDF). CFA Russia continued to explore the hot topic of fintech, inviting two experts from Russia’s Otkrytie bank and the software company Nekst.

The event was held at the new office of IIDF and featured Pavel Revo, the vice-president of Otkrytie, and Alexey Degtyarev, the business development director of Nekst, as the two invited experts.

Below: Pavel Revo giving a presentation


Pavel Revo focused on the essentials of the E-commerce payment system without a solid knowledge of which one cannot effectively understand Internet banking and shopping for that matter. He expanded on the details and roles of interchange, the component of fees that businesses must pay to accept credit cards.

Since interchange fees in Russia can be over 2 percent, merchants dream about solutions to cut transaction costs. According to Pavel, with the current interchange rates, the payment system is losing 100 billion rubles (around USD $1.7 billion) a year on interchange fees alone.

To sum up Pavel pointed out that to create a new payment system (the one with 0.1 percent interchange fees, for example) one needs to increase the use of non-cash transactions and get rid of ATMs, as they’re too costly to operate.


During his presentation Alexey Degtyarev, who is a former director of B&N Bank's digital services department, said the role of peer-to-peer payment transactions and other non-traditional methods of payment are overblown. He added that the use of bank issued payment cards won’t decrease with the increase of smartphones.

Although new fintech startups are trying to push out payment cards, so far they have not been successful. All these new fintech, like QR-codes and other E-wallet type systems, sounds fancy and the idea behind them may be genius, but currently they cannot effectively compete with the cards, Alexey said.

Below: Alexey Degtyarev doesn't believe E-wallets are replacing payment cards any time soon


“In Russian provinces there are many places without Internet. What kind of E-wallets are you talking about?” – Alexey asked a reasonable question and concluded that the payment cards are here to stay. The saying the old ox plows a straight furrow couldn’t be more true in this case.

Following the main speakers, Pavel Nikonov, an investment manager from IIDF, gave a short presentation. Nikonov briefly told about IIDF, which is a Russian venture capital fund that invests in potentially successful new tech startups, and said how successful the company has been. On a final note, he invited guests to send in applications if they have any bright startup ideas and see how IIDF can help realize them.

CFA Association Russia. Ассоциация CFA (Россия) не занимается вопросами приема документов и сдачи экзаменов - это исключительная сфера Института CFA. По всем вопросам, связанным со сдачей экзаменов CFA (Levels I, II, III) просьба обращаться по адресу info@cfainstitute.org

mailto: info@cfarussia.ru

Please send correspondence to: Edelweiss Center, Block 1, 1st floor, 3 Davydkovskaya street, Moscow 121352 Russia

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