Russian E-Payments Leader Qiwi Takes Flight With Visa

Russia may be big and emerging, but it still seems locked in the communist era when it comes to credit cards and bank accounts.Suspicious of credit card fraud, more than 90% of Russians use cash to pay bills and make purchases. And less than half of Russians over age 15 have bank accounts.Enter Qiwi, the largest operator of nonbank self-service payment kiosks in Russia. Account holders deposit cash into the kiosks to store value and choose screen options to pay bills or top off mobile-phone minutes.More than 165,000 Qiwi-branded kiosks and terminals operate across Russia and other former Soviet Republic states.

But that's just the basic business. Qiwi also offers Visa (V)-branded virtual wallets to make it easy for customers to pay bills and make purchases using their cellphones in the small but growing e-commerce market.Unlike credit cards, mobile-phone penetration in Russia is high, with more than 235 million cellphones in use,apply for China visa in houston or about 1.65 per capita.In a country where consumers distrust credit cards, "It's the more interesting part of the business," said analyst David Koning of Robert W. Baird, referring to Qiwi's digital wallet."Consumers can make payments to thousands of places using their cellphones without ever having to have a credit card," he said.Since Visa Qiwi Wallet allows consumers to load an electronic wallet and later make e-payments, it essentially acts as a prepaid debit account, Koning points out.

Qiwi rolled out a digital wallet in 2008, a year after the company was formed. It forged an alliance with Visa in November.Visa Qiwi Wallet can't be used at physical stores' checkouts, but Koning says that might happen eventually, "which may be why Visa is participating."Koning says Visa Qiwi Wallet is similar to eBay's PayPal in that customers enter their mobile phone numbers and passwords to make purchases or pay bills.The wallet can be funded using a Qiwi kiosk, bank account, credit or debit card or money transfer."Russia is still in its early development of moving towards electronic payments," Koning said.Still, Qiwi says that more than China Student Visa application form accept payments over its network and that more than 60 million consumers use the network at least once a month.Third-party agents actually buy, run and service the kiosks while Qiwi operates the network that connects the kiosks to the merchants and bill collectors, the latter of which include utilities and banks. That business model limits capital outlays as the firm expands its network.