i2c Collaborates With CardFlex Japan on Prepaid Products

by Tristan Hugo-Webb 0

With electronic payments very much in its infancy in Russia(estimates by Russia’s Central Bank suggest 90% of Russians use cash to paybills and make purchases); Qiwi and Visa have teamed up to boost e-commerceacross the country.

With more than 165,000 nonbank self-service payment kiosksin Russia and other former Soviet Republic states, Qiwi allows account holdersto deposit cash at the kiosks and then pay bills or top off mobile-phoneminutes without ever having to enter payment card data. According to Qiwi, morethan 47,000 merchants accept payments over its network and that more than 60million consumers use the network at least once a month. To boost it competiveness,Qiwi offers Visa branded virtual wallets, which allow customers to pay billsand make purchases using their cellphones in the e-commerce marketplace.

When Qiwi account holders make a transaction, the merchantpay Qiwi a processing fee. Qiwi then passes on a portion of the processing feeto its agents who run the kiosks. Since its creation, the wallet has enjoyedgreat success to date. According to filings, the Visa Qiwi Wallet made morethan $16.2 million in revenue in the first quarter of 2013. Furthermore,payment volume on the wallet jumped 107 percent in Q1 to $1.73 billion and theaverage volume per wallet was $133.

The success of the Qiwi and the Visa Qiwi Wallet will relyon jump starting the e-commerce market because currently Russia’s e-commercemarket accounts for no more than 2% of retail sales according to industrysources. However, the potential for the payment segment is there, and accordingto Mercator Advisory Group estimates, the e-commerce market could grow byupwards of at least 25 percent in the coming years. With Visa’s backing, theQiwi Wallet stands a good chance of becoming a major player in the e-commercemarket as it matures.

For more information on the Russian payments market and thee-commerce segment in particular, see Mercator Advisory Group’s researchreport, Introduction to the RussianPayment Market, published in April 2013, and look for an upcoming webinaron the topic.

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