Banks.eu continues a series of interviews with top managers of European financial institutions to unveil all details of their work in Europe and find out their plans for the future. This time, the portal interviewed Avet Mnatsakanyan, CEO at WebMoney Europe.
With over 10 years’ experience in the payments services and e-money sector, Avet is responsible for bringing WebMoney’s innovative payment technologies to customers in Europe and leads the company’s strategic development and customer and partner engagement plan. Prior to this role, he was founder and Managing Director of several UK based Payment Service Providers specialising in online money remittances and local e-payment solutions for international customer not-present businesses.
– How widely is the WebMoney brand known in Europe? How long has the brand been present in the European market?
– I would like to begin with a little bit of history. The WebMoney Transfer system was founded in 1998 and in November this year we celebrated our 18th birthday. So far, more than 32 million users from over 90 countries have joined the system. WebMoney is most popular in the former CIS countries, however, our presence is steadily growing in European countries where merchants and banks recognise the WebMoney brand. In 2015 we received FCA licenses, which allowed us to expand our business to all countries within the EU and also opened our services to residents in the UK. We continue our growth and development and we strongly believe that WebMoney will become a widely known brand in the near future.
– Would it be correct to say that WebMoney in Europe is mainly used by immigrants from Russia and other CIS countries? How popular is the brand among local citizens in Central and Western Europe?
– When we consider the user`s location, it is mainly based on their registered address in our system. Therefore, it is hard to say if the user is a local citizen or an immigrant from a former CIS country with citizenship of the country in which they live. WebMoney is usually well known among expats from the former CIS countries living in Europe. In some instances users even promoted our services by offering WebMoney as a preferred payment method in their online stores.
– How many customers does WebMoney Europe have in Europe? In which countries in Europe does the company have the largest market share and why?
– We have a wide presence in Latvia, Estonia, Lithuania, the UK, Germany, Spain, Italy, Bulgaria, Poland and the Czech Republic. It is important to emphasise that the European market is not divided equally and historically, the market share between bank cards and e-wallets differs from country to country. The same applies to the popularity of e-commerce and an average spending capacity. According to the report by Ecommerce Europe, an average citizen in Western Europe annually spends around 2,492 EUR on online purchases, in Central Europe the average spend is 1,055 EUR, while in Eastern Europe it is 629 EUR.
We estimate that by the end of next year, the number of active users of WebMoney purses in the EU will reach approximately 10% of the overall number of our users. We have significantly expanded the number of the top-up methods available for Euro purses, including a top up by bank transfer via the majority of local banks. Also, users can withdraw funds not only to a bank account but also to their bank card. The continuous improvements and innovations in our services attract new users daily and we continue to take further steps to make our services even more convenient for users in Europe.
– Almost every country in Europe has its own payment services similar to WebMoney, what is your strategy to stay competitive? What makes WebMoney stand out for users in Europe in comparison to other service providers?
– I would like to highlight that all transactions within the system are instant and irreversible, which eliminates the risk of a potential chargeback. One of the key advantages of using WebMoney is, of course, our low fees. The transaction fee for a p2p transaction, which is paid by the sender, is 0.8% of the amount being sent but no more than 50 EUR. Another point to consider is that we support eight different types of purses, bringing to our users the potential for expanding their business activities to many countries around the globe. The European market, indeed, has many players, but we do not see ourselves as a mass product. We will be the right choice for customers looking for a powerful payment tool with many additional services, not just a simple option for topping up their mobile. Our focus is on providing a highly secured business environment with a variety of additional services. The system has a few dozen free services such as, WebMoney Escrow which is to ensure security of transactions. Other examples include the Mass Payment Service, the Debt Service, the Fundraising Service via the WebMoney Funding platform and many more. We also support a number of services for establishing easy and convenient lines of communication within the system, such as the WebMoney Events business network, the messenger service and our own video conferencing service.
– Many banks, including large institutions of an international scale, launch their own mobile payment platforms and e-wallets. How does WebMoney perceive the situation in terms of its future position in the market? What options for competing with banks are opened for a service such as WebMoney?
– We are currently witnessing growth in a number of new payment solutions, and global online companies, such as electronics and gadgets manufacturers, giant vendors and even social network providers become players in this market segment alongside traditional financial institutions. Consequently, for banks, the adaption to the growing market demands presents a bigger challenge. Unlike the dynamic fintech companies, they require more effort to overcome bureaucratic barriers and implement innovative solutions into all their branches.
There is also a large proportion of consumers not fully captured by the banking services, in particular, young people just starting to actively use products and services. The new generation uses gadgets starting from their early years and for them, it is a lot easier to download a mobile app by one of the payment services instead of walking to a local bank branch.
– In recent years, more and more countries enter into agreement to automatically exchange financial information on their citizens, and in some countries the regulations require sharing this information with the relevant tax authorities, including information about foreign e-money accounts. Does WebMoney provide financial information on its users to the tax authorities in Russia and other countries in Europe or is this the responsibility of a customer to do so?
– Electronic Money Institutions do not fall within the definition of depository institutions therefore we are exempt from FATCA and CDOT, DAC/CRS reporting. It is the responsibility of the e-wallet owners (consumer and business) to report to the tax authorities according to the law of their country of tax residence.