Exclusive Interview with Yandex

If you haven’t heard of Yandex-we can give you one largest good reason why you should-they have built the largest, most successful mobile wallet and payment system in the world.
Anna_Kovaleva and Maria

Anna Kovaleva & Maria Gracheva

Originally envisioned as a Cyrillic-language ‘Google of Eastern Europe,’ Moscow-based, Yandex has grown to be the 4th largest search engine worldwide, but diversified in IT & Fintech, namely-Yandex.Money.

Yandex.Money has effectively transformed a notoriously, “cash addicted” society (Russia), into the leading, most successful and used, global example on mobile-cashless payments. But they are far from stopping there.

Maybe some years ago, Yandex.Money was just a mobile wallet. Now it is more than that-it’s an entire ecosystem,”

explains Yandex.Money’s CEO Maria Gracheva along with Anna Kovaleva, Head of Foreign Communications in our interview.
Maria Gracheva:

-It’s not really that simple to find a proper explanation for a role played by Yandex.Money in Russia. The products and services that Yandex.Money provides and its customer base are constantly growing. Yandex.Money is an online payment service that works with two types of clients — individual users and merchants. Since 2002, we have been providing services to those who pay and those who accept payments. Our mission is to make payments more convenient, secure, and accessible and to provide our clients with an opportunity to pay in a convenient way when they need to do it.

-Yandex.Money has a b2b service Yandex.Checkout— a payment aggregator for online stores and other businesses that need payments on their online platforms. Yandex.Checkout is the leading service for accepting online payments in Russia, according to a 2016 survey by MARC. With this payment solution, merchants from all over the world can offer Russian consumers the online payment methods most popular ya-money-logo-eng-02among Russians and CIS-citizens just in one button ‘Pay with Yandex’: bank cards, online banking, e-wallets, mobile phones, and cash
via mobile retailers and payment kiosks
(there are over 250 thousand cash-acceptance points all over CIS).
Currently, more than 76,000 online stores across the globe use Yandex.Checkout.

-Yandex.Money also has an e-wallet, which is the original product of the company. We offer -consumers easy, safe, and reliable methods of paying online on its own site and mobile app. The service hosts about 28 million user accounts with about 15,000 new accounts opened daily. Recent TNS research showed that Yandex.Money is the most popular e-wallet in Russia: every third user of the Internet in Russia pays by Yandex.Money e-wallet to make regular payments, to shop online or to make money transfers to friends.

– We are connected to 76 000 merchants, who are selling goods all over Russia. And a lot of merchants who are selling goods from abroad, to Russian customers, says Maria.

The business idea behind the success of Yandex.Money is quite simple, really:

– We are helping the merchants to collect money, and we are helping the customers to make payments. That’s it.

Maria Gracheva explains that Yandex.Money, is indeed a bit like Pay Pal, but also so much more.

Maria_Gracheva (2)

– We have more than 28 million accounts at the moment with about 15,000 new accounts opened daily. Yandex.Money also has crowdfunding instruments. It allows the user to send money to anyone, and to spend it online. The same for offline, with a Master Card issued from your eWallet. Customers can also use Yandex.Money cards as a form of payment: both plastic and virtual MasterCards are available for issuing. In 2015 Yandex.Money received MasterCard Principal Member status. By the 2016 Yandex.Money has issued more than 500,000 plastic cards and 11 million virtual MasterCards.

Russia is traditionally seen as a country with a population that is very fond of cash transactions.

– That was not a problem for us. We saw it as an opportunity, it was a driver for our business, explains Maria Gracheva.

Traditionally, a Russian employee who receives a salary, would immediately withdraw most of that money from the nearest ATM. At the same time a lot of consumer goods today are provided online.

– Russians of course need to spend their money online, sometimes. To buy things abroad or just to buy electronics, and so on. So Yandex.Money is providing a system designed to ”digitize” this cash, back to the internet.

And the infrastructure that Yandex.Money currently has in place in this regard is impressive:

– We partner with cash collection”n networks, spread all over the country. We are collaborating with all the post offices and all the money remittance offices. With a lot of retail outlets. ATMs of all major banks, and so on. Over 250,000 cash points all over Russia. So this is the way, we serve Russia’s cash addicted society, to make money online, says Gracheva, a Keynote speaker at Copperberg Mobile Commerce Payments conference in Stockholm, on January 24th-25th 2017.


-Yandex.Money performs financial transactions in real time, in Russian rubles and other currencies. Allowing payments and money transfers to be made, through the Internet. It also provides payment processing for e-commerce sites, including payments with bank cards. However, customer behaviour in Russia is still very rigid. Russians still want to ”touch their money” twice a month, Maria Gracheva says.

– The biggest challenge has been, to be understood by customers. The technical knowledge level of our customer base, is quite low.

And with lots of money ”in transit”, there is of course also the question of security.

– The only real security problem-generating scenario for us has been when our customers have written down their passwords on a piece of paper. And then stick it to their computer desktop monitor… and this is a very frequent scenario!

Today Yandex.Money is undoubtedly a big success, but what was the biggest Z factor throughout the process of integrating new technology with normal people’s hard-earned money?

– The biggest surprise for us, when we started off, was the speed of growth of international e-commerce in Russia. It’s actually just a year or two ago that we fully understood, that our customers really don’t understand internet payments. They don’t understand internet banks either… but they know how to buy things from China!

Maria continues:

– The share of Chinese e-commerce in tangible Russian goods, is really huge. Especially on sales days. For instance, on November 11th, 2016, Russia held the third annual large-scale sale dedicated to the Chinese holiday of Singles’ Day. According to Yandex.Money’s analytics, the Singles’ Day sale saw users pay for 31 times more orders than average — and twice as many as they did on the last year’s 11/11 sale.

Coming back to the Nordic MCP Conference, we search for reasons why we in the organized and financially secure Global North have not ”Yandex.Money” succeeding big time in a region like the Nordics.

– (The Nordics) already have the highest level of digital banking, and card usage. For such customers, switching from their digital banks or plastic cards to a mobile wallet on their smartphones, is not critical change. It’s just a matter of convenience. For the Nordic customers to switch to mobile wallets, special incentives like commodity discounts, will definitely be required.

Which is not to say, that this kind of mobile commerce in the Nordics will not pick up in the future. Ms. Gracheva spells out the bottom line for inspiring m-commerce:

– The most targeted message, for any customer, will in the future be delivered by retailers via mobile phones.