Translation. Region: Russian Federal
Source: Central Bank of Russia –
Why do we need a digital ruble, will it become mandatory and what will a single QR code give us?
And yet, in the financial sphere, we are ahead of the rest of the world! Well, or at least among the world leaders. The financial sphere is one of the most technologically advanced in Russia, many countries would envy such a level of development of payment technologies. Large banks are actively introducing innovations that change and simplify our lives.
And the rules of the game in this market are set by the Central Bank. And it also creates new entities. For example, the same digital ruble. What changes await us in the coming years? And how will this affect our wallets? Zulfiya Kakhrumanova, Deputy Chairman of the Bank of Russia, spoke about this and much more in an exclusive interview with KP.RU.
THE THIRD FORM OF THE RUSSIAN CURRENCY
— You are responsible for digitalization at the Central Bank. There are many conspiracy theories surrounding it. Everyone is especially scared by the digital ruble. Can you briefly explain what it is?
— It’s simple. The digital ruble is another form of Russian currency. It will circulate alongside cash and non-cash rubles. At the same time, all forms will be absolutely equivalent: just as 1 ruble in cash is equivalent to 1 non-cash ruble now, so 1 digital ruble will be equivalent to each of them. And what’s important is that the choice of what to use remains with the person.
— Why do we need a digital ruble in principle?
— For citizens — for free transfers. For businesses — to reduce the costs of accepting payments, because the commissions are several times lower than for cards.
— Now transfers have essentially become free. We can transfer up to 30 million rubles a month between our accounts in different banks…
— Yes, you can. And you can transfer digital rubles without commissions not only to yourself, but also to other people, and any amount that you have in your digital wallet. In addition, this is also a very convenient transfer service according to your rules and conditions using smart contracts.
— Sounds like something on cryptocurrency (it is believed that smart contracts became famous after being used on the platform of the second largest cryptocurrency, Ethereum, — Ed.)…
— That’s what you think. In fact, a smart contract is an opportunity to perform certain actions, including payments, according to a predetermined algorithm, with specific conditions. For example, if you want your parents’ account to be automatically replenished from your account when a certain minimum balance is reached. Or if a company wants payment to occur only upon delivery of goods. Not in advance and not after the fact. This is also a smart contract that guarantees a safe transaction for both parties.
– Why can’t this be organized in the banking sector? Do they really lack the technological capabilities?
— It is possible in the banking sector. But each bank has its own product. Different people and different companies can have different banks. For such transactions, they need to be integrated with each other.
And the digital ruble platform is unified. Everyone will be connected to it. It will be possible to receive different types of services through different banks. And at the same time, you won’t have to constantly transfer money between your accounts in different banks. In this sense, smart contracts are a new technological service that will develop our payment infrastructure, complement it, adding convenience to people.
WHEN IS THE MASS LAUNCH?
— Can hackers steal our digital rubles?
— The platform implements the highest levels and means of information protection, data protection from possible fraudulent schemes. It is simply impossible to steal them.
At the same time, if a person transferred digital rubles to a fraudster, then the wallets of the owner of the money and the fraudster can be quickly identified. Because the scheme of transferring money from bank to bank to confuse the tracks and drag out time will not work, because both wallets are on the same platform. This will help to quickly take appropriate measures.
— The introduction of the digital ruble was recently postponed. When will it appear now?
— As such, it has already been implemented. We are testing on real digital rubles, and it continues. We have postponed the mass launch. I would like to emphasize that the mass launch means a must for banks: they will have to provide the ability to pay with digital rubles. Each person will decide voluntarily whether to use this opportunity or not.
Currently, about 2.5 thousand citizens are participating in our pilot. We want to attract many times more. Plus, we are discussing various technological aspects with banks, the government, and corporations. By the end of the year, we will determine the date of the mass launch. The digital ruble is a payment technology platform with huge potential. There are many prospects for using digital rubles. We are already planning services that would be impossible without such a unified infrastructure.
— Is it true that at some point they will start paying pensions, benefits, salaries to public sector employees, and so on in digital rubles? For example, as it was with the MIR card.
— No, we have no such plans. The digital ruble is an addition, an opportunity for voluntary choice. If a person does not want to use it, he will continue to use the services he is used to.
WITH NEW CODE!
— Speaking of services. Digital payments have become commonplace for many Russians. Making a transfer takes five seconds. Even the sanctions have hardly complicated our lives. Yes, Apple Pay or Samsung Pay don’t work, but we didn’t have to carry the card for long. Stickers, QR codes, and so on have appeared…
— We have a systematic movement to simplify the lives of citizens and businesses. Including through the provision of a large number of remote payment channels. You can pay with cards, through the Fast Payment System, by QR code. You can forget your card at home or not carry it with you on principle.
— It turns out that we are following the Chinese path. There, almost all purchases are paid for with the help of Qiar…
— It cannot be said that we are exactly following the Chinese path. But this is a global trend — to simplify life when making not only payments, but also any of our actions in any spheres. We have already gotten used to this convenience. It seems that just a little bit more, and we will be controlling applications on our phone with the help of artificial intelligence by moving our eyes.
— True, sometimes difficulties arise. You come to a cafe with only your phone, and at the checkout it turns out that the QR code is not suitable or cannot be read. Why does this happen?
— This is due to the fact that this particular point may not accept your bank’s payment service, which you are used to paying with. In this case, you need to look for a card, cash, or make a transfer.
— Are there many ways to pay now? Sometimes you go to a self-service checkout and there are a bunch of options — a card, SBP, QR code, some Pay, and so on. You don’t know where to press…
— Yes, now there are three or even five options on average at a point. Each bank has the right to issue its own QR, set its own rules and standards. In this case, if you use the payment service of another bank, and your bank does not have integration with the bank that provided this service on the payment terminal, then, in fact, you may be denied payment via QR.
– What to do with this? It’s like a plug and socket problem…
— Yes, that’s right. And, in our opinion, there shouldn’t be such problems. QR should be uniform and recognized by any payment service that you have on your phone. That’s why we are currently working on creating a universal QR that will work according to a single standard. Then you won’t have to think about what exactly to attach to the payment terminal. Point the phone camera, press the “Pay” button and move on.
— What about cashback? Will it remain? After all, banks only give cashback when paying with a card, they don’t credit it when using QR code…
— If you are used to paying with a payment service of a certain bank that returns you cashback, then nothing will change. Let’s say you pay at gas stations with a certain card, receiving bonuses, reducing your fuel costs. You will continue to use the payment service of this bank. Universal QR does not cancel all the payment services you are used to. It gives you an entry point, and there you decide for yourself what you would like to pay with at this point.
— So, there will be some kind of single entrance? And then it will be possible to choose how to pay?
— Yes, it will always be one QR at the checkout. You scan it with your phone camera, and a payment page appears with different options: pay with SBP, digital rubles, or bank payment services. You choose and pay in the way that is most convenient or profitable for you. With subsequent purchases, the last three services that you are used to working with will appear at the very beginning of the list. This is maintaining the customer journey and adapting this page to you.
SINGLE RAIL FOR MONEY MOVEMENT
— Some large banks are resisting the introduction of a single QAR. Why?
— Large banks periodically don’t like what we do. But we have different missions. It is important for us that it is convenient for citizens and businesses, so that they do not overpay for services, do not find themselves in a situation where they have no right to choose. It is important for us to ensure this right to choose. And those banks that can dictate their terms, rules, and tariffs resist a single QUAR. The willingness to switch to uniform rules and tariffs for them looks like a potential loss of income.
— That is, now they take a certain percentage from businesses for this service, but with a single QR they will lose this profit?
— Universal QR provides equal rules and opportunities for everyone. For businesses, there will be a fee for the payment service. But it will not be set by a specific bank, these will be uniform tariffs.
— So, like with the Fast Payment System? If earlier banks could have any fees for transfers to other banks, now we have unification and a free limit…
— Yes, these are such unified rails. Moreover, if in the future we need to roll out some new technological function inside this QR, it will happen quite quickly — in two or three weeks. And it will be available to all participants at once. This is a unified technology based on the infrastructure of the National Payment Card System (NSPK). It will allow everyone to have the same connection rules, the same standards, the same technological components. And taking a commission in our time for a transfer that costs banks practically nothing, it looks, to put it mildly, strange.
— Plus, it certainly affects the companies’ expenses. Compare the 2–3% that a business pays to a bank for acquiring (a service that allows accepting payments from clients) when paying by card, and 0.5% if the client pays via the SBP. The difference is significant…
– Yes, this is especially important for small businesses.
— Where else can this QR code be used?
— It can be any type of service that is interesting for entrepreneurs. Any type of parking, tips, various types of payments in e-commerce. Many different areas. The unified infrastructure of the universal QR allows each new service to be quickly replicated without adding costs to all participants.
— When is it planned to introduce it?
— Discussions are underway now. In the near future, the date will be determined and written into the law.
Tricky Question
— And how do these ideas appear in the Central Bank? They are often quite advanced. And many people are hostile to them. Well, we lived normally without digital rubles and all these QR codes and smart contracts…
— We look at technological trends and international experience. We analyze how the market is developing in our country. The services that we have now are super-technological. If we look at how Europeans live, how they work in other countries, we will see that many services that we have long been accustomed to are not there. We predict what will be in demand in the coming years, take into account the demands of market participants, analyze the experience of neighboring industries. We understand what we need to respond to proactively, calculate how this will develop and create competitive conditions for this.
Evgeny Belyakov, Komsomolskaya Pravda
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