Mher Arakelyan:  Armenia`s payment business has great prospects

 In recent years, payment business in Armenia shows unprecedented growth. This is facilitated by significant progress in its technological development, a high level of competition and quantitative and qualitative growth in the number of players. One of the leaders is EasyPay, which recently entered the market and already enveloped it not only with a large network of its payment terminals, but also offered a number of original technological and mobile solutions. About the development of the payment systems market in Armenia and its features, the correspondent of ArmInfo was asked to tell the director of EasyPay company Mher Arakelyan.

What is connected with, in your opinion, let's say, this “global” trend of such active development of the payment business in Armenia?

The mainstream in the active development of payment terminals business, as well as the Internet and mobile payment solutions, is to achieve the accessibility and convenience of financial services for a broad stratum of the population. We begin to appreciate our time, to find the most convenient methods of making payments, including those that became obligatory. These are utility payments, fines, of course, payments aimed at replenishing mobile accounts, etc. The number of such payments in our lives is increasing and we, as I said, are looking for opportunities to implement them in the most convenient, comfortable form. Payment terminals have become basic for this business, but behind them are high-tech solutions, such as internet sites, mobile applications and of course electronic wallets. Our company has taken  exactly  this direction.

How would you describe the market volumes by segments as of today?

The main segments are utilities   bills and mobile payment. They make up the lion's share of the market. With them, in fact, the activation of payment systems began in the country about 12 years ago. Initially, the systems worked mainly through the acceptance of cash through payment terminals. In the future, our service line began to expand. People began to replenish accounts for the bookmaker service, then, after close cooperation was established between payment systems and banks, bank customers began to replenish card accounts and repay loans through terminals. Today this is a very popular direction, as it greatly facilitates the work of commercial banks and credit companies, significantly reducing their transaction costs. And the population had the opportunity not to go to the bank branches, not to stand long in lines. A relatively new segment is payment of fines for violation of traffic rules and parking fees. The news is cooperation with insurance companies, the ability to conclude and pay mandatory motor third party liability insurance (OSAGO) contracts. It is enough to enter the identification data of the owner of the car and the car itself.

But the opportunities are expanding and now we are already giving the opportunity to make payments related to public services: payment of property tax, payment for garbage collection. Also, our terminals are installed in places like the passport offices of the Police, the traffic police departments, the state real estate commission, the state register, the city halls and community administrations. Thus, we fulfill the function of receiving payments for these departments. All this is extremely convenient for the population - again, do not run to the banks and stand in lines.

How would you describe the level of competition in the market?

The market is more than competitive. There are a lot of alternatives. First, two more large companies (Telcell and Idram) work in Armenia like us. Secondly, the banks, thirdly, the Internet site - ArmenianCard (ArCa) or "Electronic system of state payments" e-payments. You know, it is the factor of high competition in the market that makes players constantly improve their services and is the main motive for technological development. As a result, international experts analyzing the markets came to the conclusion that Armenia in the development of payment systems left behind many countries in the region, I mean not the South Caucasus, but the so-called Greater Middle East region.

Is it easy to cooperate with banks and credit companies? Some of the banks are developing their own multifunctional terminal network.

We amend them, help them to ease the burden of working with borrowers and other types of customers. Today we already work with more than 10 credit companies. After all, unlike banks, they do not have a developed branch network, and there are many borrowers. And especially in many  regions of our country. As for banks, those who have a large clientele use our services. Although the medium and even small banks are gradually coming to the conclusion that it is beneficial for them to cooperate with payment systems in order to reduce transaction costs, optimize the work of personnel; it is better to partially give this function to the so-called outsourcing. Yes, some banks put their terminals, but their number is limited and they, basically, are located on the territory of bank branches so as not to create queues in place.

During recent last year or two the regulator began to grant licenses for electronic money and payment systems began to create their electronic wallets. That is, in fact, the market has moved on and now it is not only about accepting cash. How much, in your opinion, is this purse market promising, what is its dynamics? What is your forecast for this segment, especially as there are international electronic payment and settlement systems, such as PayPal, WebMoney and others, as well as associated electronic wallets, such as QIWI, Yandex Money and others. Are they not your competitors?

Right opposite, we try to build bridges in these powerful international systems and connect our own dramatic wallets to them. In general, the market of electronic purses has very great prospects and therefore we try to keep up with the global trend. We created our electronic wallet Easywallet and already cooperate with such systems as QIWI, Yandex Money, WebMoney. Unfortunately, such a popular system in the world as PayPal is not in a hurry to start working in Armenia due to the insignificant market size and the level of risks - the system has its own risk scale. Through the Easywallet we are actively and without limitations working with Skrill, we will soon conclude an agreement with the payment and settlement system Payoneer. So our international cooperation is constantly expanding and I view the prospects of output very positively.

No less positively, I regard the development of such a market as the implementation of purchases through the mobile application Easywallet. The "shopping" function of our application allows you to make non-cash payments at the sales and service points via smartphones. We have already signed agreements with more than three dozen of merchants, shops, pharmacy chains, restaurants and cafes. The entire list can be found on our website. Through a special EasyMerchant application you can pay for your purchase or service from your Easywallet wallet. The deal is made very quickly, in a matter of seconds. Our wallet can be replenished from any bank card or through the same payment terminals.

What are your forecasts for the market?

Despite the fact that there is no natural growth of the population in the country, the market is constantly growing due to the fact that more and more people are becoming technologically more literate. In addition to the youth, which naturally , this technology has begun to connect people of the middle and even older ages. And this is very pleasing. In the regions the situation is the same, although there still the population prefers to deal with payment terminals and while avoiding electronic money. But in time, I think, "the sprouts of civilization" will reach the rural areas. After all, today the stage of "smartphone-isation" of the population is actively being completed and people are getting deeper and deeper into the functional capabilities of telephones and as a result of Internet technologies. So, the shortage in the audience will not be for long and long years. The fact that many functions leave in the field of mobile payments is also indicated by the fact that the growth rate of the number of payment terminals in Armenia is gradually decreasing. The market is already saturated with them, now it's up to virtual space. If in figures, then the annual growth of our market is about 20-25%, and by electronic wallet - and even more. A tough competition leads to the fact that the market goes to better quality and versatile products. So, for example, our company today develops the idea of ​​"cashout," that is, in addition to taking cash, our new terminals will be able to ensure their delivery. According to the regulatory requirements, a person can make cash and withdraw it, but without changing the business processes. This is important in terms of security measures and combating money laundering.

Who provides your technological improvement? Are those just  ready-made solutions that you buy and adapt to the domestic market?

No, the software and all the technological solutions are written here in Armenia by our experts from the "AgeAnd Ey" (HS & A) IT company, affiliated with us. In addition, we have developed our own terminals with a very interesting and modern design. These machines you can see in the network of shops "Nor Zovk". In addition to monitors and some specific nodes, the hull and the rest are manufactured here in Armenia. And this is a good reserve for the future.