Material law arrives for virtual payments

Legislation outlining the responsibilities for market participants in the virtual payments market has been passed with industry players saying it will provide a fillip for the burgeoning sector.

Virtual payments have gained momentum as IT service providers looked to open up further services for online consumers, with key Russian players including Yandex, QIWI, Rbk.Money and Webmoney.The online shopping and service market has expanded exponentially in recent years, making virtual payment systems increasingly competitive against cash and credit cards. The new legislation provides a firmer legal footing according to Boris Kim, NAUET Chairman of the Committee on payment systems and banking instruments, and Board Chairman at QIWI, who added that it maintains the direct relationship between buyer and seller or services and products.“The reform on National Payment System established a legal framework that explains and guides through the core legislative rights and responsibilities of all companies involved in money transactions, and virtual payments.It has a significant impact on system progress and provides support to serious and professional business participants. We hailed the official decision not to revoke the law on payment agents and not tie them with Central Bank control. We see this as important difference of service provision, meaning that paying via virtual providers, who have direct contracts on payment transactions with service and goods sellers, such as mobile operators, online book stores, other retailers, eliminates unnecessary intermediaries such as banks. That is to say, if your transaction or service failed you complaint directly to retailer not to a bank.”The legislation makes online transactions more affordable and secure, opening opportunities beyond country borders with the Yandex payment system becoming the first Russian virtual payment system to step beyond Russia.In Ukraine, Belarus, Kazakhstan and other CIS countries, customers wishing to pay for Skype and other services can do so using Yandex online payment service after completing a registration process for more than 3000 Russian and international online stores. All payments are made in roubles, although Yandex offers personal virtual accounts in euro or dollar to purchase products from international traders, such as Amazon and Apple Store.Eugene Zavalishina, CEO of Yandex, says the company makes internet shopping more comfortable and competitive outside Russia"In CIS countries people use the same Internet services, as in Russia. Join social networks, talk and chat on Skype, play online games, read electronic books and listen to the music. Now they are on par with Russian users to pay for these and other services through Yandex.Money which is becoming worldwide.”QIWI service is more focused on money transfers, virtual payments and makes virtual payments available through their terminals as well as the internet. The company was the first to introduce virtual visa – a temporary virtual card which has grown 10 fold over the last year. Yuri Demidovich, Senior vice president QIWI Bank virtual cards have significant growth ahead of them.“Virtual cards are popular due to several factors First of all, the popularity of virtual payments is increasing. According to the Electronic Money Association in 2010 the volume of refilling of electronic wallets in Russia increased by 75% – from 40 to 70 billion roubles and virtual cards provide the broadest opportunities for online purchasing. We expect a consequent increase of 10-15% month on month and will target second million card sales at the end of the year”