Forbes continues to publish an interview with a well-known Russian Internet entrepreneurs and professionals. This time about why you need to keep a check all business, as arranged payment market in Russia and to what level should reduce its dependence on that country, and how to develop a group of Qiwi, says its founder and president Andrei Romanenko.
The complete audio version of the interview can be heard on the website of the "Runetologiya."
Maxim Spiridonov: In previous releases of the program, we have already talked with the leaders of the two major payment systems that provide cash flow online. However, the picture would not be complete without a conversation with another player in this market, although the model of his work is markedly different competitors. Today our guest is president of Qiwi Andrey Romanenko.
— How do you rank yourself in the electronic payments? How would you rate your share, and whether the other major players ("shops" and Webmoney) your direct competitors?
— To begin with, which markets and with whom we compete. We began its history in 2003. Then we had the idea to create a payment system. In February 2004, we launched the USIP — payment service. This is a B2B-business (for corporations and large companies — Forbes.ru), when there are service providers, we are agents and outlets. A few years ago, we started thinking about where the market will develop and come to the conclusion that you need to create a brand and payment service. In 2007, the brand was coined «Qiwi», on the basis of which was created Qiwi.Koshelek ‘. " This technology B2C. On the Russian market, we are working with "Yandex.Money" and Webmoney, but, in fact, it is not the competition. As for the market B2B, in this market there is a company, "USIP," which operates under the brand Qiwi, the company Comepay, «JCB" and the other players. On our B2B market share of about 42%. In the market of B2C (retail clients) share of hard to call. If you take the three of us ("Yandex», Webmoney and QIWI), I think our share of more than 40%.
— Does this mean that you are looking in the direction of an electronic purse that terminals will die as a business?
— This business in the next 10 years will not die. People, fortunately for us, 90% of the money that comes to them on a card, remove the ATM. This is our client who has received cash, and then uses this cash. The terminals will always point refill (a bank for electronic money, the cellular provider, and so on). The Russian people will always cash in your pocket, so it will always pay cash. Proof of this is the international market. We ordered the study in 20 countries, analyzed the average household bill in cash, believed that people pay in cash. It was found that up to $ 100 in 24 countries 91% of purchases is made in cash. $ 20 — 96%. Statistics do not be fooled.
— It is interesting to talk about the early career of the entrepreneur. When you were finishing Institute, whether the choice: to go to work for wages or do their work?
— When I was in ninth grade, I decided that I will always work for you. I started doing business in the 10th grade. Then there was the popular Mitinskiy market, and in Moscow had plenty of outlets for the sale of video games. I organized a small group of people who do just that. We recorded the game on a floppy disk, beautifully packaged and sold them. When I graduated, I went to college. By the time came Turkish CD and killed my business. The Turks killed many of their economies businesses in Russia. Near my institution was a big plastic factory, and shopping, located near the institute, I realized that nowhere is there a package that no place to put what you bought. Here and there they were, but they were thin, ugly, without logos. Then I offered to supply one large supermarket bags with their logo. For several years I developed this business. Then came the Turks with cheap cellophane and killed my business. Then I already had a good relationship with several stores in the Moscow region, and I had the idea to do distribution of scratch cards. First card in 1998 released MTS Internet, has released a second "Beeline". I created a team and at the end of 1998 began to distribute the scratch cards. From 1999 to 2005 I was the top seller of scratch cards on the Moscow market with a share of about 70-80%. Outlets, where we supplied them, was of the order of 8000.
— Learn you have time?
— In fact, learning is easy. The main thing — to understand this subject, study it and pass the exam. I walked for about 50% of the course, but for me most of the items were understandable, loved ones. Not so hard, work a few hours, go and hand. The teacher is not necessary to present the material as it is written in the book, but as you understood it, and tell you how to apply this knowledge in practice.
— Education received a meaningful way, or it was done for a crust?
— If it was done for the crust, then I would have just bought it. It was a conscious choice. Financial Management — is what I use. In my business I have been managing people, team building and construction finance.
— What is more important — the ability to find the right people and manage them, or the ability to correctly manage the finances?
— The most important thing — to find and build a team. In my work I have 50% of the time is given to work with people.
— There are some rules that guide you in selecting people, the formation of the team, or all built on intuition?
— I’m a table of people with whom acquainted, meet, talk, there am submitting their characteristics. If I need a man, I pick up the table and looking for the right person. Who is a leader? This HR.
— In what format you run this base? This Excel or any special program?
— This is a program written in Access even 7 years ago. Initially, there were contacts, then moved all the contacts in Outlook, because everything has to be synchronized.
— How many of your contacts database?
— In the mobile phone I have 7500 contacts.
— Let’s go back to the origins of entrepreneurial activity. How was your first built a big business — store cards?
— In the late 90’s my friend got a job to one of the mobile operators. He called me and said, "You spent several years in distribution. Tell me where we go with our scratch cards? ‘. I began to help. Posted in the online flea market ad "Sale of scratch cards." After 5 minutes, I have already called. I bought a $ 300 card for $ 3000 and quickly sold them. I realized that it is good business and decided to create a store cards.
— What were the scratch cards?
— This is a scratch card of mobile operators and Internet service providers. In the early 2000s, I had the company of the IPC, which is engaged in distribution of scratch cards of all providers. At that point, it was obvious that the cards — not the most optimal payment instrument, as there were too many additional costs associated with their manufacture, storage, transportation, sale. I’m at that point in the logistics were about 100 cars that traveled the Moscow region and made delivery to each specific point.
— It’s crazy. How is it transformed into the USIP, or USIP idea originated in parallel?
— I concluded from this experience. I realized that I need to monitor closely the trend of the market, trying to get ahead of ourselves. Otherwise, it could face a loss of positions. In 2003, the company was founded USIP. A key
role was played by an acquaintance who works at one of the mobile operators. They called and said, "We have come some French. They have something to offer, we do not need it, can you talk about it? ‘. I’m at that point already started looking for an innovative universal payment instrument. French (the company Ingenico) proposed technology, the essence of which was not to be applied PIN-code on the payment of scratch cards and sell them through POS-terminals at cash registers in stores. Several times I went to France, looked at the technology and offered little change. I suggest the following: a person is suitable, select the provider, calls the phone number and enters the amount. They said that it requires a large investment and set a condition of the dismissal of 0.5% of each payment for life. I found it simply unacceptable.
I was by then already had a team of IT people, I was summoned by their leader Dmitry Ukhanova and asked if he understood anything in the processing. Dima said he did not understand, but if need be, we will understand. In the end, I went to negotiate with service providers, and he — make the system. February 16 we had three contracts with MTS, "Beeline" and "Megaphone", and we launched the system. We had a few dealers who have had communication stores. We have to put them on the computer program and began receiving payments.
— So initially there was only program, but was not itself the terminal?
— There was a program on computers and were POS-terminals. Computers — a product for mobile shops, POS-terminals — products for those shops where we were selling scratch cards. At that time, scratch cards sold in small shops. We would like to replace a bunch of cards that were lying there in the residues to the terminals. A year later, it became clear that the business will operate. We started to think about what we need to diversify, and by the summer of 2005 was designed payment terminal, which was approved in the form in which we are accustomed to seeing. We have made the first 100 units and thought what to do with them. As always, we are saved online. At that time, there were several forums, we hung up ads, and in three days we sold all 100 terminals.
— You are selling them below the average market price? Or gave at cost?
— No, there was a profit. If the terminal is now worth 75,000 rubles, then it was worth about 150 thousand rubles. Then all the parts were more expensive because they were small volumes. Once the volumes are increasing, the price of components fell.
— So you sold the terminals with low margins and earned a transaction?
— Yes. At that time, when we came out with a price of 120,000 rubles were producers who were trying to sell the POS terminals at $ 7,000 — $ 10,000. Russian soul always wants a lot of money once and do not think about the future. We decided that we need to sell to recoup the cost price and all costs and give to the world of mass product that everyone will understand. We have done business in a box, and for 2005 — 2009 years, we have produced approximately 80,000 terminals. A year later, many have also begun to produce, to try to compete, but today our production runs, produces 5,000 — 10,000 a year, and sells worldwide.
— In what kind of business you are offered in a box for entrepreneurs?
— People came, entered into an agreement with us to accept payments. Then entered into an agreement for the purchase of the terminal, looking for a shop where to take the space to rent, set the terminal enters username, password, and they could only once every few days to pick up the money and perform maintenance. Until now, this business works that way. There are many small, medium and large networks in the country, there are family businesses with 20-30 terminals in a small town — a family of three people working, more than they are alone and they had to earn money.
— Almost all the terminals are not in your property, but simply bought and serviced by you?
— We have owned nothing, we agent’s model. To date we have 7,500 agents, about 5,500 providers, 6,000 online retailers, with all of them and we contract between service providers and customers are our terms and agents. We have 210,000 outlets, of which 140 000 — that’s terminals and 70,000 — computers and POS-terminals. 52 million subscribers every month come to our outlets and trusted payment to us and our agents.
— All of these devices and software, delivered on computers — it is a single network?
— Yes. We have 18 types of applications for all types of devices. We have applications for all mobile devices for computers we have a program «Qiwi Cashier", the cashier could not take the money. If a cashier is worth the program "1C", and in it they are all records, that is, a module for "1C". If the company has its own internal accounting system, we have a protocol that can connect to us and receive payments. Under all POS-terminals, which are the global market, we have written software. Everything that can be passed through the ID and the amount we support.
— How did the transition toward electronic money? What are the prospects you see for this market?
— In 2000, scratch cards, in 2003 — receiving payments in 2004 — terminals at the end of 2005, we created the company "Mobile Wallet", which gathered a team of associates and began investing in the development of mobile technologies. We wanted to create an Internet based processing, where with the help of the Internet could be something to do. In late 2006, I met with Yuri Milner. Then I learned that he was a shareholder e-port. We decided to combine our efforts to develop the market in mid-2007 created a brand and a company Qiwi, which combined two processing — OSMP and e-port. There also joined the company "Mobile Wallet", which is now called «Qiwi Wallet." Then we started to actively develop the technology, to fill sites and mobile phones services that we collected in the company of USIP. We believed that 50% of people will be in the mobile phone, and 50% — on the computer.
— «Qiwi Wallet" was not designed by you, you bought it and have adapted themselves?
— No, this is not the case. My approach — no outsource, we did everything within himself. In 2005, we created the company "mobile wallet."
— They say that you are quite serious about the development that you have a special department that deals with this. Can you tell me how to build a work of this department?
— I have a fad about it. Many people are surprised, as the founder and president of sometimes falls to the bottom. For example, today I listened to half an hour, as the operators talk with users looking to customer complaints. We have a special department that measures the quality of the calls. There is a special department for testing interfaces. There are people who from morning to evening playing with interfaces. There is a special section where people sit in front of the terminals for multi-camera, enter data, and then get a map of where the person looks. For example, a person is not ready to take more than eight objects. At first he was not looking to the left, right, up or down, he looks into the center, then goes counterclockwise. The head of this department is a person who works with me for many years. He understands that we need.
— Judging by what you say you personally are actively involved in all of this?
— No other business that will cost more than a billion and which can be constructed in the next 10 years, I do not see why all the time I dedicate to the company. In 1998, I built it, from that moment on, I develop it. I believe in it, it’s my second family.
— You are the major shareholder of the company?
— We had a couple of mergers. E-port was established in
2000, it founded the Boris Kim. In 2006, Yuri Milner entered the e-port. In 2007, we merged. To us came Yuri Milner and Boris Kim. In this part we lived until the end of 2010. In late 2010, Jura Milner made IPO Mail.ru Group. They then 25%, at the founding fathers — 75%. At the end of 2010 we went to a Japanese corporation «Mitsui». They have bought from us 14.9% of shares (in assessing the company $ 645 million).
— You are the major shareholder?
— Yes, of course. At the founding of today more than 60%, at Mail.Ru Group — 22%, in Mitsui — 14,9%.
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