Currently, Sberbank and #Tinkoff both offer bank card transfers with a telephone number, but only for transfers inside the bank. Tinkoff also offers money transfers to other banks by telephone, but these aren’t automatic, and reply on the recipient receiving and following an SMS link and entering their card number.
Tinkoff has long coveted access to Sberbank’s money transfer system. Sberbank, Russia’s largest bank, is also the dominant player in the money transfers market, with more than 102 million active debit cards, and Sberbank to Sberbank transactions accounting for about 65% of all transfers in the Russian banking system in 2017.
Mobile money transfers are ‘the’ current trend in Russian banking and Maria Mikhailova, Executive Director of the National Payment Association, says all major banking players are looking at their mobile offerings. International competitors, including MasterCard, which launched a mobile-based card-to-card money transfer service in April, and Visa, are also looking to muscle in.
But Sberbank, the 900 pound gorilla in Russia’s retail banking market, has kept other players at arms length from its operations until now, and has limited dalliances to those with major players in other market sectors – notably #Yandex.
Mikhailova says the most likely reason behind Sberbank’s approach is not reticence to open access to its payment systems, but technical factors, adding that is likely cooperation with other financial institutions will follow. A UEC representative (Universal Electronic Card, A Sberbank subsidiary) told Vedomosti on Wednesday it was working on solutions to integrate Sberbank with “external counter parties” including online money transfers between different bank cards using a card number or a telephone number.
Analysts say that the upside for Tinkoff is a vastly expanded, and far more convenient, money transfer service. The upside for Sberbank is likely to revolve around transfer fees, currently tipped to come in at about 1% of the transfer sum, and the handy revenue stream these will almost certainly come to represent.
The deal between Sberbank and Tinkoff probably also reflects prompting from Sberbank’s main shareholder, the Central Bank of Russia. The CBR has announced the launch of a speed payment system (Banking Electronic Speed Payment System, or BESP) from January 2019. This system envisages card-to-card money transfers based on a mobile number, email address, or other simple identification methods, with instant cash crediting. The National Payment Card System, a subsidiary of the CBR, is now working on this system in cooperation with the FinTech association, with the CBR to act as system operator and settlement centre.
BESP will help open up Sberbank’s monopoly in the money transfer segment, according to bankers who spoke with Vedomosti. At present, a money transfer from a Sberbank card can take several days. The bankers Vedomosti spoke with noted Sberbank views the new system as a competitor, and isn’t happy, having initially proposed that BESP be based on its own infrastructure.
Despite this, Sberbank has joined BESP, as Central Bank First Deputy Chairperson Olga Skorobogatova announced in June. Tatyana Zharkova, FinTech managing director, confirmed both Sberbank and Tinkoff are BESP participants. She believes their joint payment system, if launched, is unlikely to mean competition for BESP. “BESP is an independent equally spaced service available for any bank, with transfers between any type of accounts, not just bank cards, which is cheaper and more convenient. BESP is set to reduce costs for banks and for their clients”.