Payment Terminals Instant Payment Systems

MPS Operation Diagrams

There are 2 MPS operation schemes:

• an agency scheme where the IPU acts as an intermediary between the payer and the outlet without the participation of a financial institution (Qiwi);
• banking scheme, where the Ministry of Railways acts as an intermediary between the payer and the outlet with the participation of a financial institution (Eleksnet NPO (Moskliringtsentr), Cyberplat).

Regulation of IPU activities

In August 2006, the federal law 140-FZ "On Amendments to the Federal Law" On Banks and Banking "and Article 37 of the Law of the Russian Federation" On Protection of Consumer Rights "entered into force. The adopted document allowed commercial non-bank organizations to transfer funds from individuals without a license from the Central Bank and open a bank account. This concerned the payment of cellular services, housing and communal services, telecommunications, the Internet, etc. The so-called agency scheme led to the fact that in Russia the owners of most terminals became bank-independent legal entities and individuals whose activities were not controlled by the state. Of course, this caused an avalanche of payment terminal installations around the country. After all, entrepreneurs were spared from licensing, banking inspection and supervision, requirements for cash registers, etc.

In order to take clear control of cash flows, an instruction of the Central Bank of the Russian Federation dated 20.06.2007 No. 1842-U "On the procedure for carrying out banking operations for the transfer of funds on behalf of individuals without opening bank accounts by credit institutions with the participation of commercial organizations that are not credit organizations" was adopted. The document entered into force in the fall of 2007. According to the amendments, any commercial organization that is not a credit institution can accept cash from individuals as a fee for certain services only if an agreement is concluded with a credit institution, which, in turn, entered into agreements with recipient organizations on the transfer of funds in their favor.

At the end of June 2008, the bill supporting the agency scheme was, in principle, supported by the FAS, the Ministry of Finance and the Ministry of Telecom and Mass Communications. The Central Bank and the Association of Russian Banks have repeatedly opposed the agency scheme in view of concerns about money laundering through terminals. As a result, in the relevant draft law, the requirement to equip terminals with cash registers appears as a mandatory condition. The agent scheme allows terminal owners to enter into a direct contract with the service operator without becoming an agent of the bank.

Payment terminal

A payment terminal is a hardware and software complex that provides receipt of payments from individuals in self-service mode. The payment terminal is characterized by a high degree of autonomy of its operation. Work control can be carried out via the Internet.

The payment terminal is designed for:

• accepting payments for mobile communications services, utilities, Internet providers, to repay bank loans;
• replenishment of personal accounts in payment systems, bank card accounts.

Principle of operation

Using the screen menu of the payment terminal, the user selects the service that he would like to pay for, indicates the necessary details (phone number, personal account number, etc.) Following the instructions displayed on the screen, enter the required amount into the bill receipt and press the "Pay" button. The payment terminal independently recognizes the authenticity of cash and its face value.

Using a GPRS modem or other means of communication, the terminal forwards the entered payment data to the server of the electronic payment system providing payment processing. Having processed the data, the server of the electronic payment system transmits them to the server gateway of the organization to which the payment is intended. After that, the amount entered into the terminal goes to the user's account and the terminal prints and gives the user a check.

This sequence may be somewhat different. For example, the terminal can only check the correctness of the format of the entered details and not check the success of the payment. In this case, if the specified details are incorrect, the payment may be accepted by the terminal, but not credited to the receiving organization before contacting the technical support service of the company serving the terminal.

Enabling users to use a terminal is a service for which the terminal owner company typically charges users a fee. The fee may be assigned as a percentage of the amount spent, often with a minimum or maximum amount limited, or may not be explicitly charged to the user, but instead charged to the receiving organization.

Design features

The payment terminal consists of:

• metal or metal-plastic housing. The housing of the payment terminal is usually made of steel with a thickness of 2 mm or more, which allows it to withstand intense mechanical influences. Inside there is a separate metal box with a lock for the bill receiver, and the body is locked to a vandal-resistant crossbar lock. If you plan to use the terminal as an advertising platform, then the case is equipped with an additional box for installing a second (advertising) monitor. To ensure additional safety, it is usually possible to attach the housing to the floor. There are also cases in which the monitor compartment (monitor assembly) is isolated from the bill receiver and computer in order to make it difficult for intruders to enter the bill receiver;
• a computer installed on a special chassis and equipped, as a rule, with a 2.6 GHz processor, 256 Mb memory;
• TFT monitor (often with a touch screen), instead of a touch monitor, a combination of a regular monitor and keyboard can be used;
• uninterruptible power supply devices;
• a bill of exchange designed to accept cash. The bill receiver determines the denomination of the bill to be accepted and verifies its authenticity. The accepted bills are stored in a stacker, which is removed when the payment terminal is collected;
• a check printer for printing and issuing a check to a user. Due to its purpose, the printer should have increased reliability and print speed. Check printers are usually equipped with a "presenter" mechanism that allows you to first print a document, then cut it off and only then give it to the user. For printing checks, special thermal paper is used in rolls;
• keyboards (in the case of a regular monitor). It is also possible to integrate a device for working with plastic bank cards, a keyboard, a barcode scanner, a fiscal recorder, etc.
• GPRS/ GSM-a modem designed to organize the exchange of information between the payment terminal and the server of the electronic payment system using GPRS or GSM wireless communication technology. To operate the modem, a special SIM card of the corresponding cellular operator is installed in it, which provides data transfer services at the installation site of the machine.

Instant Payments Market Analytics

2020: The volume of sales terminal shipments in 2019 increased by 24% and reached 128.2 million units

The analytical agency and the publication The Nilson Report published a study on the supply of POS terminals and other payment solutions for 2019. According to the report, the volume of shipments of trading terminals in 2019 increased by 24% compared to 2018 and reached 128.2 million units. This was announced on September 22, 2020 by INPAS. Read more here.

2015:493 players in the Russian payment terminal market

The Russian payment terminal market in 2014 amounted to 3.3 billion rubles, in 2015 it employed 493 players, 52 of whom positioned themselves as manufacturers (data from Magram Market Research). Their common problem is total dependence on the supply of components from abroad, due to which prices for final products from January 2014 to July 2015 increased by 85%.

During the fourth quarter of 2015 - the first quarter of 2016, we forecast a decline in production by 60% or more. The reason for this is an overabundance of supply on the used terminal market (with an average price of a "new" terminal of 110 thousand rubles, used terminals in September-October cost an average of a little more than 30 thousand rubles), which was the result of a large-scale reduction in the number of points in leading payment networks in the summer and autumn of this year under pressure from the Central Bank and law enforcement agencies, which strengthened the fight against illegal cash-out. Two of these trends do not yet allow us to make a forecast for the segment's volume in 2015.

By the end of 2017, the production of payment terminals may go into growth, but the former pace of development (up to 15% per year) will no longer be - the mass folding of payment networks in late 2015 - early 2016 will lead to an acceleration of the already powerful outflow of consumers to the Internet (if at the beginning of 2013 only 53% of bank customers used an Internet bank, then at the end of 2014 - already 67%; in the next two years, we predict an acceleration of this process), which will not help restore sales through terminals. These devices will be in stable demand only from banks, on the premises of which 48.6 thousand terminals were placed in 2014.

2014: up 5%

Russian payment terminals for the year conducted transactions for 1.15 trillion rubles. According to J'son & Partners Consulting estimates, the growth of payment turnover in 2014 slowed significantly, and the market grew by 5% to 1.15 trillion rubles. The number of transactions decreased both in the segment of banking and non-banking terminals, while the positive market dynamics was due to an increase in the average transaction size.

The market for payment banking and non-bank terminals, along with remote financial services, is part of the market for electronic payment systems. The slowdown in market growth is due, among other things, to the following factors:

• development of remote payment services - improving the quality of display cases, additional opportunities for entering and withdrawing funds and using virtual bank cards, a significant increase in the penetration of banking services;
• consumers increasingly began to pay for communication services such as mobile communications, broadband access, pay TV and others either using mobile applications or on the operator's website;
• Average transaction fees are higher than other electronic payment systems.

2013:27% increase

According to J'son & Partners Consulting, the turnover of the EPS market in Russia in 2013 amounted to 2.4 trillion rubles, showing an increase of 27% compared to 2012. The turnover of the payment terminal market in 2013 amounted to 1.1 trillion rubles, or 46% of the EPS market turnover, for the first time accounting for less than half of the market turnover. According to J'son & Partners Consulting forecasts, in the next 5 years the share of the turnover of payment terminals will decrease annually and by 2018 will be 31%.

There will be significant changes in the structure of payments through non-bank payment terminals (NBPTs): the share of payments for mobile communication services will decrease significantly, while the share of transfers (including money transfers; replenishment of electronic wallets; transfers to accounts, including credit institutions), on the contrary, will increase significantly. Starting in 2014, the number of NBPTs will decrease annually due to competition with other payment methods. Nevertheless, this is unlikely to negatively affect the positive dynamics of payment turnover due to an increase in the size of the average transaction due to a change in the structure of turnover in payment directions.

According to J'son & Partners Consulting, in 2013 the market turnover of bank payment terminals (BPT) amounted to 180 billion rubles (+ 16% compared to 2012), and by the end of 2018 the market turnover will amount to about 260 billion rubles. The structure of turnover in payment directions in the five-year perspective will change in the same direction as the structure of NBPT turnover, however, in addition to increasing the share of transfers, J'son & Partners Consulting expects a significant increase in the share of payments for housing and communal services.

2012: Terminals occupy more than half of the EPS market

According to J'son & Partners Consulting estimates in Russia in 2012, payment terminals are the most popular method of electronic payments. In general, the turnover of the EPS market (of which the payment terminal market is part) in Russia in 2012 will amount to 1.811 billion rubles, showing an increase of 24% compared to the same indicator in 2011 (1.462 billion rubles). At the same time, despite the fact that the payment terminal market occupies more than half of the entire EPS market (according to the results of 2012, 915 billion rubles, or 51% of the estimated turnover of the EPS market), its share is decreasing.

In 2011, the turnover share of the payment terminal market was 59% in the turnover of the EPS market. And by 2017, according to J'son & Partners forecasts, the share of the turnover of payment terminals in EPS will decrease to 30% and amount to 1.122 billion rubles, while the turnover of the entire market will be at the level of 3.74 billion rubles.

The Russian payment terminal market is divided into two main sectors - banking and non-bank payment terminals. As for the segment of non-bank payment terminals (NPTs), according to J'son & Partners Consulting estimates, in 2012 there were 227.9 thousand NPTs in Russia, and by 2017 their number will decrease to 215.7 thousand.

The decrease according to experts' forecasts will occur due to increased competition with bank terminals and the increasing popularity of remote financial services. There are several players in the non-bank payment terminal market in Russia, among them the largest are the QIWI, CyberPlat (CyberPlat) and Eleksnet terminal networks.

According to J'son & Partners, the NTC market turnover in 2012 amounted to 762 billion rubles, an increase of 4.5% compared to the same indicator in 2011 (729 billion rubles). The share of the turnover of non-bank terminals from the turnover of payment terminals in 2012 amounted to 83%.

In 2011, the total share of QIWI, CyberPlat and Eleksnet NPO (Moskliringtsentr) in terms of turnover in the market exceeded 80%.

By the end of 2017, the NTP market turnover will amount to about 875 billion rubles, while the average annual growth rate (CAGR) in 2012-2017 will be 3%, and the share of the turnover of non-bank terminals from the turnover of payment terminals will decrease to 78% by 2017.

The number of transactions in the NTC market in 2012 amounted to 3.863 billion, which is 7% less than in 2011 (4.141 billion). According to J'son & Partners Consulting forecasts, despite the growth in the turnover of the NTC market, by 2017 the number of transactions will decrease to 3.135 billion. This is due to an increase in the share of remittances (both towards electronic wallets and towards money transfer systems), which will lead to an increase in the size of one transaction.

It is also noted that the average commission in the market of non-bank payment terminals in 2008-2012 increased annually and in 2012 amounted to 6.3%. However, J'son & Partners Consulting forecasts that increased competition in the instant payments market will affect the average commission downward. The average fee in 2017 is projected to be 6%.

2011

According to the results of 2011, the turnover of the Russian instant payments market increased by more than 15% compared to 2010, exceeding 892 billion rubles (data from NAUET).

The number of transactions in 2011 decreased by 3.4% compared to 2010 and amounted to 5.7 billion. At the same time, the amount of the average payment increased by 18%, amounting to 156 rubles. Obviously, this is due to the continuing increase in the share of "heavy" payments with a relatively large check. Changes in the structure of instant payments clearly demonstrate this.

The share of payments for mobile services in the total turnover of the market in 2011 decreased to 66%. For comparison, in 2010, "cellular" payments accounted for 73.5%. While the share of payments aimed at repaying bank loans increased to 13%, exceeding the 2010 figures by 4.3%.

In 2011, the list of services that can be paid through instant payments continued to grow. Today it includes payments in favor of Rosreestr, the Federal Bailiff and Traffic Police Service, taxes (transport, land, income), utility bills, visa consular fees, kindergarten fees, even payment for transfers to prisoners and much more.

The structure of the instant payments market in 2011 is as follows:

The top three market leaders in 2011 did not change: it includes QIWI, CyberPlat and Eleksnet. At the same time, the shares of the main players continued to decline due to the activity of smaller regional companies. Their total turnover in 2011 increased again, increasing by 14.6% compared to 2010, and amounted to 29% of the total market turnover.

As a result, market leaders, increasing absolute turnover indicators, continued to lose their share of their presence in the market.

The positions of the main players in the Russian instant payments market are as follows:

According to the results of 2011, the following market trends can be distinguished:

• growth in the activity of credit institutions and their interaction with payment systems;
• increasing the share of regional payment systems in the total market volume;
• increase in the average payment due to an increase in the share of "heavy" payments (repayment of bank loans, payment of railway and air tickets, housing and communal services);
• a significant expansion of the list of available-for-payment services;
• expanding the interaction of payment services with government agencies;
• large instant payment operators have shown interest in providing non-cash payment instruments and have acquired electronic wallets. The QIWI service became a pioneer in this area.

2010

• The National Association of E-Commerce Participants analyzed the performance of the instant payments market in 2010. Its turnover grew to 772.2 billion rubles, which turned out to be slightly more than the 746 billion predicted by the results of the previous year. According to Boris Kim, Chairman of the Committee on Payment Systems and Banking Instruments of NAUET, a faster growth in the volume of instant payments is due to the formation of the public services market, for example, the payment of traffic police fines, state duties, taxes and other payments that were previously inaccessible to terminal users. At the same time, the number of transactions and the number of money receiving points did not increase in 2010, but the average payment became more - it increased from 110 rubles. up to 132 rubles. This is due to an increase in the share of "heavy" payments, such as the payment of air and rail tickets, as well as utility bills.

The relative growth rate of the market continues to decline - in 2010 it amounted to 19%, while a year earlier it was 21%.

Another sign of saturation is the lack of growth in the number of money reception points, there are about 400 thousand of them in Russia as of April 2011, and Kim finds such a number optimal.

The number of transactions did not change in 2010 - there were both in 2009 and in 2010 about 5.9 billion.

The share of the most popular - and at the same time the "easiest" - payments for mobile communications is decreasing, from 81% in 2009 to 73.5% in 2010. At the same time, the share of utility bills and loan repayment operations increased to 1.5 and 8.7%, respectively. Among the reasons for the reduction in the share of payments for mobile communications is an increase in the commission of partners of instant payment systems, its size increased from 5.7 to 8%; decreased (from 15% to 9%) the number of terminals that operate without commission. Therefore, customers have to look for more economical payment methods.

The shares of the main participants in the instant payments market decreased slightly in 2010:

• Qiwi - up to 43%,
• "CyberPlat" - 20.2%,
• Eleksnet - up to 6.4%,
• Euroset - 5.1%.

At the same time, the share of other players increased - from 15 to 25.3%.

Kim attributed this to the increased activity of regional systems. In addition, banks began to enter the instant payments market, creating their own systems or buying some existing players. But the operators of instant payment systems began to buy banks.

The interpenetration of the banking sector and the instant payment market is also expressed in the fact that instant payment systems have begun to work with bank cards. Such integration helps to attract salary card holders, of which there are a lot in Russia. By registering such a card in the instant payment system, its owner is able to manage his account from any terminal of the system, instead of withdrawing money from it and then paying for services with it through the terminals. This is both convenient and profitable - the commission may turn out to be lower.

Instant payment systems for 2010 created their own electronic wallets, with the help of which it became possible to pay for the services of online stores. Thanks to this, instant payments actually acquired the functionality of electronic money systems, such as WebMoney or Yandex.Money. For example, Qiwi, according to Kim, already about 10% of the money goes through the electronic wallet of the system, although the average payment is still about 6 rubles. Nevertheless, this part of the instant payment system is actively developing - the most "heavy" payments often go through the wallet.

• In the first half of 2010, the turnover of the Russian instant payments market grew by 18.4% to 354 billion rubles, (data from NAUET).

In the 1st half of 2010, the shares of the largest market participants decreased: the United Instant Payment System (Qiwi) - from 49 to 45%, Cyberplate - from 25 to 20%, Euroset - from 6 to 5%, NAUET calculated. And the share of small payment systems increased by 10 to 23%, the report noted.

The changes are related to the entry into force from January 1, 2010 of the law "On the activities of accepting payments of individuals carried out by payment agents," explains Boris Kim, Chairman of the Committee on Payment Systems of NAUET. The law changed the procedure for passing micropayments. If earlier a large payment network, for example Qiwi or Cyber ​ ​ Payment, could receive them from a subagent (smaller network) and transfer them to the final recipient, for example, a telecom operator, now such an intermediary scheme is prohibited. Therefore, second-tier networks - according to Kim, there are now about 20 of them in Russia - directly conclude contracts with recipients of funds, and as a result, the share of large operators is reduced. Qiwi spokesman Alexandra Vysochkina agrees with this explanation.

Executive Director of Cyberplate Vladimir Kuznetsov categorically disagrees with the NAUET figures. According to him, the share of Cyberplate in the micropayment market significantly exceeds 20%. "And how could NAUET calculate the market share of Cyberplate without knowing its financial performance?" Kuznetsov wonders. By the way, NAUET is affiliated with Qiwi, he recalls.

Euroset works with the majority of players in the instant payments market and takes into account this traffic in its turnover, says the representative of Euroset Ulyana Smolskaya. According to the generally accepted method, the share of Euroset in the turnover of the instant payments market in the first half of 2010 amounted to 7.9%, she says.

2007

According to CNews Analytics estimates, the turnover of only 5 of its largest players, controlling about 85% of the market volume, increased by 100-130% in 2007 and amounted to more than $16 billion. This figure in 2006 corresponded to $7.7 billion. The number of payment receiving points for the three largest EPS of Russia this value exceeded 250 thousand: CyberPlat - 100 thousand, Qiwi - 151 thousand.

A number of factors provide positive dynamics of EPS development in Russia:

• growing incomes of the population and an increase in the number of cellular users. Payment for mobile services is still the main revenue item of companies in this market;
• the introduction of new services and an increase in the range of services provided - the possibility of paying for fixed telephony, as well as housing and communal services; an increase in the number of Internet payments (online casinos, mobile content, gifts, books, etc.);
• convenience and speed of payment, as well as the possibility of making micropayments.

History

2024: The first payment terminal on the Aurora OS is presented

On October 17, 2024, Open Mobile Platform (a subsidiary of Rostelecom) presented the first payment terminal running the Russian Aurora operating system. The device has a certificate for working with biometric data. Read more here

See also

• POS Terminals (Global Market)
• Bank payment terminals

• Instantaneous Payment
• The fate of the EPS in Russia: how to avoid a financial collapse?