FOCUS: Russia’s VimpelCom, Qiwi offer e-wallet to stimulate mobile payments

By Yekaterina Yezhova

MOSCOW, Jun 15 (PRIME) -- Russian mobile operator VimpelCom, known under the Beeline brand, has teamed up with payment services provider Qiwi to launch a joint electronic wallet. Mobile subscribers will get access to a broad range of e-payments without commission, using the balance of their mobile phones. The partnership could improve loyalty of clients to the brands and animate faint popularity of mobile payments in the country, analysts said.

“Cooperation with Qiwi will provide all Beeline’s customers with a broad range of new opportunities as Visa Qiwi Wallet is accepted by most of the popular merchants. We expect that this service is going to mark a new era of mobile financial services and that its launch will increase the number of those who use modern payment technologies,” Anastasia Orkina, executive vice-president for marketing at VimpelCom, said.

VimpelCom subscribers can make purchases in major online shops, pay taxes and fines and make payments to a wide range of sellers on good and convenient terms with Visa Qiwi Wallet with commission rates for some categories being a zero. Subscribers can use their mobile phone account as the source of funds.

The subscribers of Visa Qiwi Wallet do not need a separate application, as the e-wallet interface will automatically change the color theme to Beeline’s black and yellow style at the qiwi.com Web site as well as on the main mobile platforms. The main functions will remain unchanged, Qiwi’s communications manager Ksenia Vasileva told Russian Connection.

“Qiwi is developing a cutting-edge technology that offers new ways to pay for goods and services worldwide,” Anna Stoklitskaya, Qiwi’s managing director, said. “Today, as our technologies combine with the unique expertise of one of Russia’s largest telecommunication services providers, we are offering a new generation of e-payment tools”.

A Visa Qiwi Wallet can be replenished with e-money using a bank card, via a money transfer or with cash through any of the Qiwi kiosks and terminals located throughout the country.

Finam’s financial analyst Timur Nigmatullin said that the deal will slightly cut the margin of Qiwi’s net revenue per transaction.

“Such features of Qiwi’s business model as a branched-out network effect and a high operating leverage will ultimately allow the payment services provider to earn profit thanks to growth in the number of transactions, brand loyalty of users and the EBITDA margin. Operators will win mostly thanks to improved loyalty of the subscriber base, the absence of commission expenses and increased popularity of services of mobile data transfer,” he said.

Beeline and MegaFon e-wallets

Qiwi launched a joint e-wallet with MegaFon in February. “The main differences between e-wallets of MegaFon and VimpelCom, from the point of view of the consumer, are additional options: MegaFon’s subscribers get back 0.5% of payments and can check balances of ‘favorite’ numbers in the e-wallet interface, and Beeline’s subscribers enjoy better commission terms for a whole range of providers,” Vasileva at Qiwi said.

Qiwi will announce interim results of partnership with MegaFon in 2016. “We are satisfied with the launch of the joint product and plan to actively develop the service. According to feedback and questions from users, they are certainly interested in the joint wallet,” Vasileva said.

No operating data on the MegaFon project have yet been released, although the signing of a new partnership agreement indirectly points to the success of the project, Gazprombank analyst Sergei Vasin said.

“The partnership aims to popularize mobile payments, which are not very widespread in Russia, accounting for just 1% of all e-payments. We will watch for developments in Qiwi’s partnership with Beeline and MegaFon for the next six or seven months before assessing the impact of these deals on Qiwi’s financial performance. Furthermore, if this project proves successful in Russia, Qiwi could also target international expansion through Visa,” Vasin said.

The creation of similar e-wallets with the country’s two other leading cellular operators, MTS and T2 RTK Holding, working under the Tele2 brand, is unlikely, Nigmatullin at Finam said. “Business processors of MTS are tightly integrated with MTS Bank. In the second case, the obstacle is a small subscriber base and weak penetration of mobile data transfer,” he said.

At present, there are 241 million active SIM cards in the country, and Qiwi has over 17 million active wallets. “Considering differences in calculations, the use of wallets by non-residents and a various degrees of penetration of mobile data transfer services among operators, I estimate that 8–9% of MegaFon’s subscribers and 6–7% of VimpelCom’s subscribers use e-wallets,” Nigmatullin said.

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