1. NFC Prospects in Emerging
Markets: case of Russia
Victor Dostov
Russian Electronic Money Association
CEESCA Meeting, Portoroz, 20-21 September 2012.

2. Russian E-Money Market: going upward
Russian E-Money Industry Turnover
7000
6000
6000
5000
Million euro
4000
3000
3000
2000 1700
1000
1000
0
2009 2010 2011 2012
(projection)
Russian Electronic Money Association, 2012.

3. Russian E-Money Market: going upward
Active ‘e-wallets’, mln.
20 30 34
2009 2010 2011
Russian Electronic Money Association, 2012.

4. Basic technologies
E-Wallets for online transactions
Mobile phones for small payments
from pre-paid mobile account
Payment kiosks for offline
‘insert cash’ payments

5. Innovative offline interfaces
Payment kiosks
1. Choose a service 2. Deposit cash 3. Payment is done

6. 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

7. Mobile Commerce in Russia
Important note:
Customers are paying from their prepaid mobile account
and not from their bank account
Topping-up
mobile phone
account
Money on mobile account
E-Money may be used for P2P or transformed into e-money
P2B transactions or forwarded to
money transfer system

8. Regulation environment growing strong
Pre- • Regulation is mostly
2009 era circumstantial
2009 • Law on Payment Agents
• Major Breakthrough:
2011 • Federal Law “On National
Payment System”

9. Federal Law “On National Payment System”
Legal Definition of „electronic money‟
Expansion of agents‟ functionality
Legal Framework for the sustainable
evolution of the market

10. Universal Electronic Card
• Supposed to complement and substitute ID
• NFC-enabled
• Includes multiple applications:
– Payments
– ID
– Driving License
– Access control
– Digital signature
– And many others…

11. Universal Electronic Card
• Limited distribution from 2013
• Distribution via Government Services
Centers, Russian Post
• 50/50 public and private financing

12. Universal Electronic Card
Government agencies started to compete with their
own electronic card projects.
Few are willing to cooperate.
Result: many ideas and no product (yet)
State
Electronic services
ID website
credentials
Innovative
Bank card
projects
?

13. From diversification to hybridization
Interfaces and technologies complement each other

14. From hybridization to „cloud-ization‟
• Funds easily „migrate‟ between
instruments and can be
managed anytime, anywhere

15. Where does NFC stand?
Bringing part of the cloud to the offline world
(which may still lack universal connectivity)
NFC-enabled NFC-enabled NFC-enabled
phones cards kiosks

16. 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

17. „Injecting‟ NFC into existing solutions
Technological impetus
to the contactless ecosystem?
Making contactless experience matter
• Speed
• Security
• Convenience

18. Making contactless experience matter
St-Petersburg Underground: from magnetic stripe
to stored-value contactless Oyster-type card

19. Potential contactless hybrids?
Square iPay PayPal Here

20. Contactless ecosystem: where do we start?
Customers (NFC mobile, NFC Additional functionality
Point-of-sale (POS terminals)
cards) (transport, access, ID, loyalty, etc.)

21. www.npaed.ru
Victor Dostov
President of the Russian Electronic Money Association
+7 921 963-85-15
greygato@gmail.com