Ye­lena NESTERENOK All Cards In

Ev­ery fourth pay­ment in Be­larus is made us­ing plas­tic cards

Economy of Belarus - - CONTENTS - Anna KOT

Cash­less pay­ments have per­me­ated our lives. Even the tough­est skep­tics give in “un­der the pres­sure” of prof­itable loy­alty pro­grams, con­ve­nient pay­ment ap­pli­ca­tions and func­tional card prod­ucts. The use of cash­less pay­ment in­stru­ments has been steadily grow­ing. Bank cards re­main the main pay­ment in­stru­ment to­day. In an in­ter­view with the Econ­omy of Be­larus Magazine Di­rec­tor of the Na­tional Pay­ment Sys­tem Belkart Ye­lena NESTERENOK talks about the changes await­ing the cash­less pay­ment mar­ket and pay­ment tools that can re­place plas­tic cards.

Ac­cord­ing to the lat­est data, Be­larus is among Europe’s lead­ers in terms of the num­ber of non­cash pay­ments. Ac­cord­ing to sta­tis­tics, Be­laru­sians use cards more of­ten than peo­ple in Ger­many, Poland, and Czechia. How can you ex­plain this?

In­deed, Be­larus is re­ally ahead of Ger­mans, Poles, Czechs, and Lithua­ni­ans in the use of pay­ment cards. This is de­spite the fact that the mar­ket of cash­less pay­ments in West­ern Europe be­gan to evolve much ear­lier than in Be­larus. As of 1 April 2016 Be­larus had ap­prox­i­mately 12.4 mil­lion cards in cir­cu­la­tion, i.e. more than 1 card per capita. As of the be­gin­ning of this year, ev­ery fourth pay­ment in Be­larus was made us­ing cards.

I think these re­sults were made pos­si­ble pri­mar­ily thanks to the ac­tive po­si­tion of Be­larus’ Na­tional Bank, great in­ter­est of all banks and close co­op­er­a­tion be­tween all par­tic­i­pants of the fi­nan­cial mar­ket. In 2013-2015 the coun­try im­ple­mented the plan of joint ac­tions be­tween the gov­ern­ment agen­cies and fi­nan­cial mar­ket par­tic­i­pants to de­velop the re­tail pay­ments sys­tem us­ing mod­ern elec­tronic pay­ment in­stru­ments and means of pay­ment.

Cur­rently, we are guided by De­cree No. 478 on Dig­i­tal Bank­ing Tech­nolo­gies and the Dig­i­tal Bank­ing De­vel­op­ment Strat­egy in the Repub­lic of Be­larus for 20162020. The goal is to in­crease the share of non­cash pay­ments to 40% of the to­tal re­tail turnover by 2021. A na­tional pro­gram to im­prove the fi­nan­cial lit­er­acy of the pop­u­la­tion is cur­rently in progress. Our pay­ment sys­tem and banks give fi­nan­cial lit­er­acy lessons and con­duct a va­ri­ety of pro­mo­tional events and other ac­tiv­i­ties.

How do things look for your com­pany? It is ob­vi­ous that Belkart has man­aged to fight off the stereo­types re­gard­ing the na­tional pay­ment sys­tem.

Over the past two years, Be­laru­sians have dras­ti­cally changed their at­ti­tude to Belkart prod­ucts. Now we see pos­i­tive trends both re­gard­ing the recog­ni­tion of our trade­mark and the use of our prod­ucts.

The num­ber of Belkart cards in cir­cu­la­tion is more than 5.1 mil­lion units. About 200,000 are co-badged Belkart-Mae­stro cards. The share of cash­less pay­ments in the to­tal vol­ume of op­er­a­tions with our prod­ucts rose from 21.6% to 27.04% in 20142015. In 2014 card­hold­ers made more than 360 mil­lion fi­nan­cial trans­ac­tions. In 2015, the num­ber of trans­ac­tions reached al­most 430 mil­lion, i.e. rose by 16.7%. Al­most 1.2 mil­lion fi­nan­cial trans­ac­tions were made per day, or 50,000 per hour.

Our pay­ment sys­tem may boast good re­sults in other ar­eas. For ex­am­ple, only 15.6% of card­hold­ers with­drew all the money on the day the money was cred­ited to the ac­count. In other cases our clients ei­ther kept the money on the card ac­counts and used it in vir­tual pay­ments, or with­drew it par­tially. This shows that peo­ple’s fi­nan­cial lit­er­acy is re­ally im­prov­ing and that non­cash pay­ments are gain­ing pop­u­lar­ity.

To­day Belkart prod­ucts are ac­cepted at 99% of re­tail and ser­vice out­lets, 98% of ATMs and 99% of self-ser­vice ter­mi­nals. It is the high­est pen­e­tra­tion rate among all do­mes­tic pay­ment sys­tems in the CIS. Thanks to the na­tional au­to­mated in­for­ma­tion sys­tem ERIP Belkart card­hold­ers can carry out trans­ac­tions in all on­line stores with . by and .bel do­mains.

How are things with the na­tion­wide loy­alty pro­gram Mot­snaya Kartka launched in 2014?

Over 170,000 cards have al­ready been is­sued. They pro­vide dis­counts in more than 2,000 sales out­lets across the coun­try. Over 150 or­ga­ni­za­tions have joined the ini­tia­tive, and their num­ber keeps grow­ing.

Eight banks take part in the pro­gram, and this is only the be­gin­ning. Our am­bi­tious goal is to turn ev­ery pay­roll card is­sued by any bank in the coun­try into a dis­count card ac­cept­able at all re­tail and ser­vice com­pa­nies through­out the coun­try.

Is Be­larus ready to turn into a cash­less so­ci­ety? Some coun­tries have al­most gone cash-free. Is this pos­si­ble in our coun­try?

In­deed, the share of non­cash pay­ments in Bel­gium, France, the UK, Canada, Swe­den, and the Nether­lands is ap­proach­ing 100%. Such a re­sult has been achieved in these coun­tries first of all thanks to a va­ri­ety of gov­ern­ment pro­grams such as the de­vel­op­ment of the mod­ern pay­ment in­fra­struc­ture, avail­abil­ity of mo­bile pay­ment ter­mi­nals, the in­tro­duc­tion of lim­its on cash pay­ments and com­mis­sion fees in cash trans­ac­tions.

The ma­jor­ity of these prac­tices are ap­plied in Be­larus as well. It per­tains, first of all, to a wide use of pay­ment ter­mi­nals in re­tail and ser­vice or­ga­ni­za­tions, in­clud­ing bank projects on pro­mot­ing mo­bile ter­mi­nals. The zero li­a­bil­ity prin­ci­ple that obliges banks to re­turn money to the card­holder in case of frauds is pro­tected by the law. The Be­laru­sian gov­ern­ment has im­posed a limit on cash

Be­larus is re­ally of Ger­mans, Poles, Czechs, and Lithua­ni­ans in the use of pay­ment cards

pay­ments re­strict­ing it to 1,000 base amounts. Banks now of­fer more ben­e­fits to card­hold­ers, in­clud­ing, for ex­am­ple, a cash-back op­tion.

All these steps help boost the growth of non­cash pay­ments. If all the par­tic­i­pants of the fi­nan­cial mar­ket stick to the strat­egy, Be­larus will have all the chances of be­com­ing a non­cash so­ci­ety. In my opin­ion, the forth­com­ing re­de­nom­i­na­tion of the Be­laru­sian na­tional cur­rency will also en­cour­age fur­ther in­crease in the share of non­cash pay­ments.

It looks quite promis­ing. How­ever, the va­ri­ety of cards is so big that some­times it is hard to choose. There is an opin­ion that we need a mul­ti­pur­pose card that com­bines debit, credit and dis­count cards and can also be used as an ID and a travel card. There are such ex­am­ples abroad. Can we ex­pect such cards in Be­larus? To­day there are tech­nolo­gies that can com­bine in one prod­uct

As of 1 April 2016 there were ap­prox­i­mately 12.4 mil­lion cards in cir­cu­la­tion in Be­larus

sev­eral pay­roll cards, cards of dif­fer­ent loy­alty pro­grams, a travel card and oth­ers. Prod­ucts based on this tech­nol­ogy are of­fered by some banks in Rus­sia and also in Europe.

How­ever, the pace of dis­sem­i­na­tion of such prod­ucts in any coun­try de­pends on the de­mand, and Be­larus is no ex­cep­tion. Given this, it is ev­i­dent that banks in­tro­duce cost-in­ten­sive tech­no­log­i­cal so­lu­tions for im­age­build­ing pur­poses rather than com­mer­cial rea­sons.

In 2014 the Be­laru­sian pay­ment sys­tem launched an in­te­grated prod­uct com­bin­ing the func­tions of pay­roll and dis­count cards. We will con­tinue de­vel­op­ing sim­i­lar prod­ucts.

The ad­vent of on­line-only banks and ex­pan­sion of mo­bile bank­ing ser­vices are ac­tively dis­cussed in Be­larus to­day. How will the de­vel­op­ment of dig­i­tal bank­ing af­fect the do­mes­tic mar­ket of plas­tic cards? What will hap­pen to cards? Will they look dif­fer­ently from what we are used to?

Im­ple­men­ta­tion of in­no­va­tive pay­ment tech­nolo­gies, no doubt, is a ma­jor suc­cess fac­tor for the lead­ing cash­less coun­tries. On­line bank­ing, mo­bile bank­ing ser­vices and other means of re­mote ser­vic­ing of card­hold­ers are no longer novel con­cepts.

Plas­tic cards will soon stop be­ing the main pay­ment in­stru­ment. Be­laru­sian banks are work­ing hard to in­tro­duce tech­nol­ogy to em­u­late cards with the help of mo­bile phones, watches and other por­ta­ble de­vices. With the im­ple­men­ta­tion of this tech­nol­ogy, the is­sue of plas­tic cards in the form we know to­day will be min­i­mized, but not stopped com­pletely.

We keep up with the cur­rent trends and will soon of­fer new ser­vices to our card­hold­ers. This is en­vis­aged in the strat­egy for the de­vel­op­ment of our pay­ment sys­tem in the com­ing years.

The use of bio­met­ric iden­ti­fi­ca­tion is an im­por­tant trend in on­line bank­ing. Ex­perts say it con­sid­er­ably en­hances the se­cu­rity of trans­ac­tions. Do you share their opin­ion? Do you be­lieve on­line pay­ments are se­cure enough to­day?

Bio­met­ric iden­ti­fi­ca­tion will cer­tainly boost the se­cu­rity of non­cash pay­ments, es­pe­cially those con­ducted via the In­ter­net. Be­sides, it will make such trans­ac­tions more con­ve­nient.

Two- and three-fac­tor au­then­ti­ca­tion used in pay­ment sys­tems to­day also en­sures the nec­es­sary level of se­cu­rity. It is worth not­ing that since its im­ple­men­ta­tion, there has been a steep de­cline in on­line pay­ment fraud.

Over­all, the num­ber of on­line pay­ment scams in Be­larus is close to zero.

Let us go back to the com­pany’s ac­tiv­i­ties. What new ser­vices and prod­ucts can we ex­pect in the near fu­ture?

Not long ago, we launched a premium prod­uct. Its users will soon be in­vited to test new fea­tures. We also have plans to mar­ket a new loan prod­uct and launch a tech­nol­ogy for swift trans­fer of money be­tween cards of the Belkart sys­tem is­sued by any Be­laru­sian bank.

We at­tach much im­por­tance to the de­vel­op­ment of our co­op­er­a­tion with the in­ter­na­tional pay­ment sys­tem MasterCard. First of all, I am re­fer­ring to co-badged cards Belkart-Mae­stro en­abling their hold­ers to make pay­ments in Be­larus and abroad.

Be­sides, the Res­o­lu­tion of the Board of the Na­tional Bank “Con­cern­ing some mat­ters of se­cu­rity” will be­come op­er­a­tional soon. The res­o­lu­tion pro­vides for the tran­si­tion to EMV chip cards. At present, we are fac­ing a chal­leng­ing task to choose a chip for Be­laru­sian cards.

In gen­eral, I can say that we are open to clients and part­ners. Due to the ter­ri­to­rial prox­im­ity, we can get feed­back from banks par­tic­i­pat­ing in the pay­ment sys­tem, hold meet­ings, or­ga­nize train­ings and par­tic­i­pate in pro­grams con­ducted in co­op­er­a­tion with the banks.

What is the progress in co­op­er­a­tion with Rus­sia’s Na­tional Sys­tem of Pay­ment Cards (NSPC)? The in­te­gra­tion of Be­laru­sian and Rus­sian sys­tems was on the agenda some time ago.

We have set up a work­ing group of rep­re­sen­ta­tives of our pay­ment sys­tem, the Na­tional Bank of the Repub­lic of Be­larus, and a big team of ex­perts on be­half of Rus­sia, in­clud­ing rep­re­sen­ta­tives of the Cen­tral Bank. The work­ing group should an­a­lyze co­op­er­a­tion prospects and ex­plore the fu­ture of Belkart’s in­te­gra­tion with the NSPC Mir.

We are mon­i­tor­ing the achieve­ments of Rus­sian col­leagues and are al­ways ready to en­gage in a di­a­logue to share our best prac­tices. Be­larus’ na­tional pay­ment sys­tem ex­pe­ri­ence ex­tends back over 20 years, and our mag­netic stripe cards emerged more than five years ago, while the first cards of the Rus­sian pay­ment sys­tem were is­sued only at the end of 2015.

Speak­ing about the de­vel­op­ment of the NSPC Mir, they are cur­rently im­ple­ment­ing projects sim­i­lar to the ear­lier projects of Belkart. In par­tic­u­lar, to ob­tain an in­ter­na­tional sta­tus, they in­tro­duced MasterCard co-badged cards. Rus­sian col­leagues have al­ready im­ple­mented var­i­ous pi­lot projects, started is­su­ing pay­roll cards, and are de­vel­op­ing the tech­no­log­i­cal in­fra­struc­ture.

So­cial projects of your com­pany like tours to Be­laru­sian mu­se­ums and fi­nan­cial lit­er­acy pro­mo­tion are very pop­u­lar with Be­laru­sians. What else do you have in store for us?

Be­larus is set to in­crease the share of non­cash pay­ments to 40% of the to­tal re­tail turnover by 2021

In­deed, there are two big so­cially ori­ented projects. We or­ga­nize tours to Be­laru­sian mu­se­ums and im­prove the fi­nan­cial lit­er­acy of peo­ple. Two web­sites, namely mu­se­ums.by and gramota. belkart.by, have been cre­ated for these pur­poses.

As far as the first project is con­cerned, we help peo­ple learn more about our cul­tural legacy us­ing photo re­ports from mu­se­ums. It turned out that there are over 250 mu­se­ums in our small coun­try! And many Be­laru­sians want to see them at least vir­tu­ally. As a re­sult, the pop­u­lar­ity of the project is boom­ing, now we even have fol­low­ers - banks and large com­pa­nies launch sim­i­lar projects.

Of course, we will con­tinue our work. At least, we must keep our prom­ise to make photo re­ports from all mu­se­ums of Be­larus. To de­velop the project, we are now work­ing out ex­cur­sion routes, for ex­am­ple, one-day trips to Be­laru­sian re­gions with vis­its to one or two mu­se­ums. The in­for­ma­tion on these routes is avail­able on our web­site.

Within the frame­work of the fi­nan­cial lit­er­acy project Be Closer we are hold­ing cam­paigns for var­i­ous pop­u­la­tion groups. For ex­am­ple, the Les­son of Fi­nance project is meant for school stu­dents. Be­sides, we of­fer dif­fer­ent pro­grams for ju­nior and se­nior stu­dents. As part of the Magic Card cam­paign, we visit en­ter­prises to­gether with the banks im­ple­ment­ing pay­roll pro­grams at those en­ter­prises. More­over, it is not just a fi­nan­cial lit­er­acy cur­ricu­lum but a fas­ci­nat­ing event for the whole fam­ily. The cam­paign Help Your Par­ents is meant for pen­sion­ers whom we teach to use on­line bank­ing ser­vices and ex­plain how to pay elec­tric­ity, rental, mo­bile and home phone bills.

Speak­ing about char­ity projects, last year we held the cam­paign Lis­ten­ing With Your Heart. As part of this pro­gram, we pro­vided tar­geted aid and, of course, or­ga­nized small feasts for res­i­dents of care homes and dis­abled peo­ple.

As for our fu­ture plans, I can say that we will work to de­vise new pro­grams and pro­mote our so­cially ori­ented projects. Apart from that, we want to work out a char­ity pro­gram, for ex­am­ple, to take an or­ga­ni­za­tion un­der pa­tron­age and pro­vide sup­port on a reg­u­lar ba­sis.

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