The banks hurry to occupy the prospective market of payment terminals

The Banki.ru portal names the SAGA Technologies CJSC «the main Russian manufacturer of payment terminals»

After ten years after the first terminal appeared in Russia the bankers stopped to consider these devices as an inevitable evil and began to develop its own payment networks. Some credit institutions opened even more terminals than ATMs.

I created you, and I will legalize you

The Russian citizens began to use terminals in 2000. According to one explanation, the concept of creating such a device was born in the Central Bank, to be exact, in the head of Yury Maltsev, the employee of the Central Bank, chief of the payment systems and transactions department, the future founder of the Eleksnet company.

The market of terminals has been growing constantly and smoothly since its emergence. There were 130 thousand of operating terminals in the country in 2008. The economic crisis did not stop the development of this sphere. The number of terminals reached 190 thousand in a year, and the cash flow via the payment networks reached 649 billion rubles (according to the data from the National association of electronic commerce members, NAUET).

But the Federal Law «About the activity on the acceptance of payments from individuals conducted by payment agents» dd. 2010, which obliged the owners of terminals to equip their devices with fiscal recorders, has slowed down the development of this industry. According to the results of the I quarter of 2010, the number of terminals increased only in 10 thousand. However, a considerable share of this growth was made by the bankers who began to supplement their own ATM networks.

At the same time the owners of payment networks found the way to evade the law. This required, in fact, to fall back on banks, which are allowed not to equip the terminals with fiscal recorders. The cooperation with bankers gave the new impulse to the development of the terminal market: their number increased to 240 thousand for three quarters of 2010, and the cash flow via the devices reached 772 billion rubles. As a comparison, there were about 150 thousand of ATMs installed in Russia.

The support from the credit institutions enabled the owners of the terminal networks who earned on «illicit cash» rather than on commission fees, to save their illegal business. «We think that the share of terminals owned by banks constitute about 40% of the whole market, 15% of them belong to banks indeed, – thinks Vladimir Kuznetsov, the executive supervisor of the Kiberplat company. – The other 25% work according to the schedule of terminal leasing by banks with recourse. This is made to avoid the introduction of fiscal recorders, in fact, to continue the illegal sale of «illicit cash». Usually small banks which do not have other sources of legal profit are involved in these schemes.»

Despite the described «end run» enabling the terminal owners to avoid the fiscalization of their terminals and the banks’ work for the creation of own terminal networks, the geographical expansion of the terminal business during the recent years is slight. Ivan Pyatkov, the director of the retail products and technologies department of the Promsvyasbank links this to the fact that the Russian terminal market is close to saturation. It is difficult to find unoccupied places with high flow of clients in Moscow as well as in the regions. And the installation of terminals in unfrequented places leads to long pay-off periods. The situation is saved by the expansion of networks by means of the installation of devices at refueling stations, in post offices and other municipal institutions.

A handy box for cash

The main difference between a bank terminal and an ATM according to Sergey Larchenko, Uniastrum Bank CEO, is that a terminal does not dispense cash but only receives it. The capacity of a receiving cassette in these devices is low, that’s why a terminal can accept far less money than an ATM. This is because the main purpose of a terminal is to accept small sums of money for housing and utility payments, payments for mobile phone service, digital TV etc.

According to Larchenko, these devices are not so secure and reliable as ATMs. The security level of a terminal is sufficiently lower, it does not have a strongbox and it cannot be attached to the floor. It is connected using a wireless connection which is not so reliable, but the installation of it is much quicker. The recognition of banknotes also is not so reliable in these devices in comparison with cash-in ATMs.

The advantages of a terminal for an ordinary user are that it is in a walking distance and it is possible to pay for a large amount of services from various companies. A bank terminal adds to it a commission-free loan repayment if it is provided by a bank owning the terminal, and crediting of cash and non-cash money to the account. The credit institutions equip their devices with card readers for cash-free transactions.

The bank terminals also have other advantages over common devices. «Banks also install the barcode readers to simplify the housing and utility payments» – says Ivan Pyatkov from Promsvyazbank.

What do the bankers appreciate in a terminal?

Price, obviously. A terminal is far cheaper than an ATM, which price is 10 thousand dollars at least, and in full package it is about 50 thousand dollars, concerning the models by famous brands.

«The average price of a terminal is about 140-160 thousand rubles and depends on its functions – the size of cassettes, card reader availability, cash acceptor model (sheet by sheet or in a «pseudo-bundle») etc.» – Ivan Pyatkov shared its views. Sergey Larchenko from the Uniastrum Bank classified all the terminals in three categories – the cheapest and unreliable (lower than $ 1,5 thousand), middle tier devices of the Russian make ($ 3-5 thousand), and expensive models of the foreign make ($ 7 thousand and more). The last, according to Larchenko, have the same levels of reliability and functions than the Russian middle tier devices. That’s probably why there is low demand on foreign terminals in Russia.

The main manufacturers of terminals are the following Russian companies: DORS, ARS, SAGA Technologies CJSC, Unikum, Shtrikh-M and Esfor. According to the Promsvyazbank’s research, they control 95% of sales in this market. The maintenance of terminals is also cheaper than of ATMs. Oth Although in both cases the owner has to pay for repair, change of consumables, rental, connection, cleaning and bill collection. Sergey Larchenko thinks that the non-bank operators of terminal networks often save on «weakened» encashment when the change of cassettes is performed without armed guards. But it is also possible to save on technical maintenance, because a terminal requires less qualified personnel, and the fittings cost much less.

In different banks the savings on terminal maintenance is considered in different ways. Metkombank calculated that a terminal is 40% more profitable than an ATM. The experts of the Moscow Credit Bank state that the difference is even greater. «The annual maintenance costs for a banking terminal is about 25 thousand rubles. In comparison, the annual maintenance cost of an ATM is from 75 to 100 thousand rubles», – notes Denis Kaloshin, the director of the software and hardware complexes development of Moscow Credit Bank.

«Terminator» banks

The leader in the number of installed terminals among all the banks is Sberbank. This bank has increased the number of its devices up to 7 thousand, whereas it has 30.7 thousand ATMs. The second-largest terminal network belongs to Moscow Credit Bank, at August 1 this bank owned 25 thousand devices, while the number of its ATMs was sufficiently lower, 466. The third comes the Russian Standard bank, which owns the network of approximately 1.5 thousand of terminals and 2.5 thousand of ATMs.

Beyond that, according to the information from bankers and suppliers of payment equipment, the banks that develop its terminals networks the most actively are the Bank of Moscow, SDM-Bank, Transcreditbank, Rostfinans, the Industrial Bank of St. Petersburg and the SB Bank. The employees of the last mentioned told that they intend to purchase 500 terminals to enlarge its network five times.

However, not all major banks are interested in terminal networks. For example, the VTB24 bank, which has the second-largest ATM network now does not have its terminals.

The reckoning for payment

It sometimes more expedient to pay via a bank terminal or an ATM than using an online bank, and sometimes it is not. For example, the commission fee for the loan repayment in a third-party bank in a self-service devices of MCB is 1,5% of the transaction amount (50 rubles minimum). in the online bank the fee is 3% of the transaction amount (minimum 30 rubles). But in the «money transfers to other suppliers of services» column in the MCB tariff schedule for the terminal it is noted «up to 12.99%», while in the online bank it is possible to pay just 2% for the same transactions.

A similar situation is with communication services. The tariffs for the terminal provide the same threatening «up to 12.99%», and in the online bank – «free of charge». The traffic fines and ticket purchases differ in percent, but in a disadvantageous side. At the same time, it is more expedient to pay for AVON products via the MCB terminal, but the advantage is just 0.5%. The digital wallets in a terminal and online bank can be credited in a same manner. Yandex, WebMoney and QIWI are credited for free in both cases. An exception to this are the payments via the Internet into the «Uniform wallet», with 3% commission for MCB. In a terminal the money entry is free, including other wallets.

From what do the banks want to make money?

The development of terminals now comprises the increase of the list of beneficiaries and the number of services available. «The list of services available will develop in line with the customers’ demands», – thinks Stanislav Sventkovsky, deputy chief of the bank cards department of Sberbank.

According to him, now in bank terminals there are both standard list of transactions aimed at the general clients, for example, payments, loan settlements (including third-party bank loans), and a number of special services: crediting of the current accounts, special card accounts, mutual funds service, loan settlements, transactions with virtual cards, self-encashment of commercial enterprises etc.

As Sergey Larchenko said, the bankers will get the main profit from the creation of cheap self-service networks in a form of profits from credit settlements and card debts, as well as commission fees for different payments (housing and utilities, mobile, taxes, digital TV). Beyond that, terminals increase the brand awareness of the bank. This, according to Larchenko, leads to the growth of payment networks.

Source: Banki.ru (Leonid Churikov)