Payment terminals provide upside in tough times

Payment terminals are a convenient way to top up your phone or pay your bills, without going online or to a bank, and a tidy business for their Russian manufacturer.

They started with mobile phone payments now the cash collection machines allow you to pay for electricity, online shopping, air tickets and much more.

For millions of Russians these terminals are the substitute for banking services. In 2009, turnover of the instant payment market Russia was over $15 Billion and with an average 4.5% commission, they make annual profit of around $700 million.

One operator defends that commission – Vladimir Lopatin, General Director of USIP, is the current leader of the market having installed over 120 000 terminals in Russia and 24 000 abroad.

“Our services are about micro-banking. It is about accessibility of financial services to people who do not have bank account, who do not have credit card. And here are all the emerging markets of the big countries are our playground.”

Big or small it makes a good profit. Looking for a share the large banks are now ready to enter the market themselves. But it may take decades before they catch up with the leaders.

“I’m sure that the brand new banks will appear, so called branches – banks without departments. Which is still unusual for us. They can place a terminal wherever they want. And they have all the same payment functions. These are the banks of the future.”

Having proved a success in Russia, the machines are heading for the emerging markets. Under the qiwi brand – The United Systems of Instant Payments is expanding into South Africa and China.

There, the multifunctional terminals tend to accept only credit cards. Operators are now buying the genuine "Russia-made" machines to expand the instant payment business in their own style.