Сashless strategy and state control: the payment market in Belarus
It’s always interesting to study the key points of other countries. For example, not so long ago, I talked about the payment market of Japan. There are some unique features in the Land of the Rising Sun — for e.g., strong cash domination and the popularity of QR codes. Today we cana rest from the exotic — I will tell you about how the transactional business of Belarus works == deceptively close, but very understandable according to the logic of what is happening there.
Cash vs cashless
Traditionally for post-Soviet Eastern Europe, cash dominates in Belarus. As it is in Ukraine, in Republic of Belarus you can pay with a card or a phone with NFC almost everywhere, but there are many places, where the cash-only is in no hurry to leave the stage. There are many reasons for that: pensions, small shops that stubbornly resist the POS terminals, undeveloped public transport — you can’t pay with a card in a minibus.
Now in Belarus, more than a 30% of payments are carried out by cards — as of 2017, this figure reached 35.4%, and the annual growth is 3–5%. In early 2019, residents of the country had 15 million bank cards in their hands (this is more than 5 million more than the population of Belarus!), And each solvent Belarusian had 2–3 cards.
Belarus would not be Belarus if the state-created fintech monopoly did not exist there. And it is — the Single Calculation and Information Space, the SСIS. Sounds a bit scary, but ERIP gives you the opportunity to pay a lot of services — a communal flat, duties on roads, traffic police fines. The SСIS also provides for the possibility of connecting the terminal or payment via a QR code. And you can find this “space” in the offices of 23 banks and local mail. Conveniently, it seems to me, though the total state control is obvious.
Despite the absence of a law regulations in fintech sphere, Belarus can hardly be called a country where this industry is flourishing. Due to the nature of public policy, even what should not be regulated here, is still regulation. In such a situation, the same SСIS becomes the main fintech aggregator, in which Belarusian fintech projects are registered and working.
Local experts are pinning their hopes on the concept of the draft profile law “On payment systems and payment services in the Republic of Belarus”. It should make fintech more transparent for business, investors and startups. In the meantime, the «blue-eyed» cannot boast of any remarkable product of financial technologies, unlike Ukraine.
Electronic money in Belarus
Belarus is a surprisingly parity country, and even Visa and Mastercard hold equal positions here: 4.7 million people use both systems. Another 4.3 million for the local development of BELCARD and 1.2 million for BELCARD Maestro.
Despite the fact that in recent years, the Belarusian authorities are striving to establish a dialogue with Europe and not to forget about Ukraine, it is difficult to deny that Belarus is firmly in Russian orbit. A significant part of the Belarusian payment systems are somehow connected with Russia.
Thanks to the sanctions against the Russian Federation, we, Ukrainians, have already begun to forget these names, but they are still in use in Belarus. In 2018, MTS Money, Reshenie Bank (QIWIBel, iPay), BPS-Sberbank (ePay), Paritetbank (iPay), Priorbank (OSMP, iPay, Belqi), Technobank (Webmoney) were involved in the release of electronic money in the Republic of Belarus. Access to the electronic money of Belarusbank and Priorbank is given by MasterCard cards; Belgazprombank focuses on non-residents — Euroberlio and Rosberlio-Kart, Alfa-Bank, BPS-Sberbank redeem the digital funds of other non-residents — Cardi and Yandex.Money.
With the help of electronic money, Belarusians, like us, pay for mobile communications, utilities, shopping in online stores, pay fines and loans. And, for example, the Berlio system in Belarus is used to pay for fuel.
Belarus, as I have already said, does not yet shine with innovative fintech projects. However there is clearly potential there (it suffices to recall Belarusian game studios like Wargaming). But to unlock this potential, they they need to ty harder. Since the most important circumstance of Belarus is the current format of state administration, it will be great if the state throws fintech opportunities for development. As we can see, there are already such attempts to be made.
In the meantime, using the example of the SСIS and other industries, Belarus is extremely centralized. Will this benefit the local fintech? We shall wait and see.