A Conversation with Maria Gracheva, CEO, Yandex.Money

Navigator Edition: June/July 2016

Maria-Gracheva_web-We recently spoke with Maria Gracheva, CEO of Yandex.Money. In this Q&A format we discuss the positioning of Yandex.Money, the evolution of electronic payments in Russia, its use of search engine data, and the e-commerce market.

Maria has been with Yandex.Money for nine years, serving as the company’s Director of Marketing, as well as the Director of Development. She led the launch of the company’s key products, including Yandex.Money cards and money transfers, and has negotiated numerous international contracts. She has been CEO of Yandex.Money since March 2014.

1. Yandex.Money is the leading electronic payment service in Russia, both in terms of merchant coverage and customer usage. Can you profile the current success of Yandex.Money?

We provide services to both consumers and merchants. The Yandex.Money e-wallet has more than 25 million consumer accounts, with 15 thousand new accounts opened each day. During the last year, we increased the number of accounts by 25%. Recent TNS research showed that Yandex.Money is the most popular e-wallet in Russia: every third user of the Internet in Russia pays using Yandex.Money. We were able to achieve this position because of our user-friendly interface and the ease of using Yandex.Money for payments. It is much easier to set multiple automatic payments and track them through one single service than it is to manage them individually.

We also have a merchant acceptance service called Yandex Payment Solution, which is a payment aggregator for online stores and other businesses that wish to support a variety of payments online. This solution serves 76,000 online stores and is ranked as the most preferred solution (according to research agency MARC) in Russia. We attribute this success to the ease of implementation for online merchants. Yandex Payment Solution is integrated into 60 content management systems (CMSs), so merchants do not need to hire an army of programmers in order to integrate the solution into their website—they can just turn it on in their online store platform settings. We also develop customized solutions for particular industries such as online gaming.

2. How would you describe the role of Yandex.Money in changing the attitude of customers towards electronic payments in Russia? Where do you see the greatest opportunities in a payment ecosystem still defined by a preference for cash?

Online payments are capable of changing lifestyles. People used to have to go to a bank to pay bills; today they can spend this time with their family while their e-wallet automatically pays their monthly bills, taxes, fines, etc. There is a perception that Russia is a cash-based country. However, the latest research by TNS demonstrated that paying for goods and services online is no longer uncommon for Russian consumers. More than 66% of consumers said that they paid for goods and services online. Cash is still in use, but we see it as an opportunity, rather than a reason for pessimism. The presence of users who still prefer cash to online payments shows that we have a lot of space to grow.

We are leveraging new smart systems to further automate the payment process. In addition to automatic payments based on calendar or low balance, these systems can also detect and suggest payments. For instance, when a user is in a public transportation location or a petrol station, the e-wallet can recognize his or her location and suggest paying for a ride or the petrol directly from the mobile app. These systems require users to take fewer actions when making everyday life payments—they only have to push “yes” to a suggested payment.

3. Yandex is the leading search engine in Russia. What do you think about the importance of building customer data and digital identity, and how do you see this helping Yandex.Money?

If you know the profile of your customer, you can offer better service. And it is much easier to detect and suggest a relevant payment when a service uses real-time data and has carefully monitored a customer’s activities. A good example is location data: once a driver approaches a toll road, an e-wallet can already make a payment at the toll gates. This logic can work with fuel, parking or taxis, shops, restaurants—anything where users can report location—and it comes automatically because Yandex provides the most widely used navigation app in Russia. Customers are providing more information today than ever before. They want us to know where they are and what they are doing in order to offer them more information about their upcoming payments. Gathering all bills on one simple app to cut the time spent making payments is what Yandex.Money is mostly about. I also love the example about payments from search engines: when a user searches how to top up the phone, the search engine offers Yandex.Money as a payment option right in the search result.

4. How is your business benefiting from a migration to smartphones? What key opportunities does this create for Yandex.Money?

For our service, mobile payments are a strategic priority. The growing popularity of mobile platforms allows us to contact users more often than if they were using a wallet from a desktop. Thanks to broader adoption of smartphones, we have more information about users’ location and behavior to detect and suggest relevant and quick payments, and we have a chance to use biometric data to streamline the authorization process. Mobile payments extend to offline environments such as making NFC payments in stores or public transport. And I anticipate this expansion will continue. One day users will just wink at their smartphones to make a payment or say “yes, please.”

5. Yandex.Money currently has a loyalty program with merchant discounts and special gifts. Bridging the linkage between payments and loyalty remains largely elusive in mature e-payments markets, so what are the keys to Yandex.Money finding success?

For business clients we target promotions for potential customers. If a store sets specials for particular category of goods, we make sure that the message is delivered to those customers who might be interested in them. For instance, if we have discounts on a bookstore, people who do not buy books will not see these promotions. Taking into account that Yandex search engine serves more than 54 million unique users, we can say that basically, we use big data for this kind of targeting.

6. What advice can you offer to payment service providers in the West looking to create value via expansion or partnership with companies such as Yandex.Money in Russia and CIS markets?

The Russian e-commerce market is unique today—it is open to cross-border trade, meaning that purchases can be sent from the merchant to the country of the buyer via post as an individual purchase avoiding custom service. Moreover, Russians are already getting used to online shopping abroad thanks to aggressive marketing by Chinese merchants. As a result, for Russians to make a purchase on a foreign web site does not make a big difference in comparison to shopping on local sites. Obviously, Russia offers foreign online stores an entirely new market and Yandex Payment Solution helps the retailers enter this market by providing a local payment method and effective marketing channels.

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