Acquiring Strategy Day - Making money flow seamlessly and intelligently
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Strategy Day Acquiring Making money flow seamlessly and intelligently
Our Agenda
1. Acquiring 101
2. Tinkoff Acquiring business
3. Our payment solutions
4. Our customer portfolio
5. Our monetisation
6. Our growth potential and targets
tinkoff.ru
tinkoff.ru
1.
Acquiring 101.
Focus on online
tinkoff.ru
tinkoff.ru
How do online payments occur?
Payment facilitators/
Merchants
service providers
Acquirer Payment
Consumers Issuer Bank
Bank systems
Merchants
Gateway Processing Payment Issuing
system
4
Who are the main players in the online payments market?
Other acquirer
Merchants
Banks
Payment Other issuer
Consumers
systems banks
Merchants
Tinkoff integrated
acquiring platform
Other players Gateway Processing Payment Issuing
system
5
2.
Tinkoff Acquiring business
tinkoff.ru
tinkoff.ru
Tinkoff Acquiring business Making money flow seamlessly
and intelligently
Acquiring of payments Transfers solutions
Online acquiring C2B (card2account) transfers
Global peers
Universal payment gateways Recurring transfers
Offline POS acquiring B2C (account2card) payouts
In-app payments and invoicing Cross-border transfers
Recurring payments Overdrafts
One-click and link payments API-enabled payouts
QR payments SafeDeal transfer schemes
Installment plans
Acquiring
Buy Now Pay Later
Marketplace solutions
Value-added services
Merchant dashboards Verification and anti-fraud
services
Real-time reporting and analytics
Payment gateway integration
Fiscalization (online cashier)
services 7
Tinkoff Acquiring: adding new solutions every year
94
Total monthly acquiring turnover (TPV)*, Rub bn
52
39
23
12 1H’21
4 6
2020 Buy Now Pay Later
2019 One-click payments
B2C Payouts (FPS)
Tinkoff installments
2018 Marketplace 3DS 2.0
2017 acquiring solutions Mastercard Digital
2015 2016 E-invoicing within
C2B QR Payments Enablement
Payments through IVR Tinkoff ecosystem Service for Merchants
(FPS)
Internet acquiring Payments in the Fiscalization (online
Offline POS acquiring Payment form
(payment widget, mobile app (SDK) Payments through
cashier) services customization service
numerous internet- Shareable links escrow accounts
Recurring Funding from other
shop CMS, API) Apple / Google Pay Recurring transfers
payments banks’ cards (AFT)
Card to card Controlling stake Account verification
Sitescanner Business payouts
transfers in Cloudpayments services
to customer cards
Masterpass
Note: *Turnover = Total Payment Volume, includes online and offline 8
Tinkoff Kassa (Checkout) Cloudpayments
Integrated payment platform Online acquiring PSP focusing
with all popular payment on long-tail merchants
methods
CloudKassir — online fiscalization
Focus on full-fledged banking
СloudTips — online restaurant
relationships
tips
Value-added merchant
10k+ merchants across Russia
services
and CIS
Independent management
and sales team
Our clients:
9
Tinkoff
Top 3 Top 16 2 mn
Acquiring Russia online daily
online acquirer
at a glance market share
in Europe*
transactions
>96% >100kWe are a sizable online payments provider by European
standards
European online acquiring
transactions, mn, 2020
3 654
3 055
858
609 490 228 149 116
Note: Select largest European acquirers, online acquiring transactions (2020), Nilson report 113.
Our payment solutions
tinkoff.ru
tinkoff.ruHow we are helping merchants with our payment solutions
Market / merchant issues How Tinkoff addresses them
Complex onboarding with many Merchant friendly interface and seamless
intermediaries onboarding
Lack of trust in online payments Consumer facing trusted brand and strong UX/UI
Dealing with cash Comprehensive digital payments solution
High conversion rates, fraud-proof solution
High reject / fraud ratio
based on in-house developed tech
Lack of data to inform business decisions Real-time analytics
Long wait times to settlement Same day payout of merchant revenues
Difficulty syncing banking and payment
Comprehensive Tinkoff ecosystem
services
13Quick and painless
onboarding and
Online Shop Mobile application
analytics management
Payment volume Number of transactions Average ticket Payment conversion
Up to 1 day integration and onboarding
with 24/7 support
User friendly merchant interface with single
sign-on across Tinkoff ecosystem
Easy activation of payment methods in
merchants account, processing of refunds
and chargebacks
YEAR MONTH DAY CHOOSE A PERIOD
RETURNS Full operation and fraud control
1 / 20 302.17 ₽ 3 / 48 206.22 ₽ 18 / 88 423.50 ₽ Smart real-time payments analytics
Today Yesterday 1.10—08.10
60% Checkout.com study: 60% of merchants
surveyed do not feel that their payments
data are informing their business strategy
nor their innovation
14Best-in-class Fraud
monitoring
We have consistently low fraud ratio..
Tinkoff 2.6bp vs region 7.4bp (MasterCard data)
…while maintaining very high transaction
approval rate
Antifraud approval rate of 99.6%
Automated customer verification system
Cross-channel monitoring
Our own fraud monitoring solution – SiteScanner
70 000 website scans per month
Analysis of mobile apps, social media and reviews
Officially registered as MC’s Merchant Monitoring Service Provider
15All payment methods in one
Complex payment platform with all popular and new
innovative payment methods
Visa, MasterCard and MIR Payment System
Apple Pay and Google Pay
QR-codes, through Faster Payments System
E-invoicing directly from Tinkoff account
Recurring and subscription payments
Online installments / BNPL
16Solutions for marketplaces to The service of processing payment transactions carried
out on merchant’s website in favor of third parties without
distribute payments to suppliers entering into direct contracts with them
1
Service /
goods provider
2
Service /
goods provider
3
Service /
Client comes Chooses goods provider
Pays
on your website items to buy
Marketplace /
Platform
After paying for the order on merchant’s website, the money is debited from the payer's card
in one amount, and the bank distributes it among all the suppliers involved. It is also possible
to transfer merchant’s fee share of the purchase
17Solutions for classifieds: Transparent settlement process
Safe deal through The buyer places an order on the classified
escrow account Seller receives the money only when the buyer has
confirmed the goods are received as agreed
Increasing trust in online transactions
on classifieds where both parties are
individuals Transactions are processed through
the bank's transit account
The platform itself does not need to open
an account to use the service
Long-term freezing of money
on the buyer's card
We can conduct transactions with a difference
between order date and confirmation date
of up to 60 days
1813 February 2021
Easy set-up of recurring payments
Lighthouse Charity
Subscription or recurrent payment model for customers
NCO (MCC 8398)
Allows merchants to increase stickiness of their clients
Account settlement lag – one hour
Split Dispute
Fast enrolment with any bank
Purchase Docs
Popular subscription service for charities / taxes / penalties
Option to set up schedule of payments
Bonuses
Cashback
19We are addressing long-tail
Tinkoff doesn't share your data with anyone
merchant needs through transfer
Link a card and payout solutions
Shop Teleport Taxi
Instant Transfers to and Quick merchant
Card
transfers and from any bank onboarding
Number
24/7 support cards and integration
Owner
E-mail
Transfers use cases
Link
Microfinance / loan payments Classifieds escrow payments
You agree to share you e-mail address
Taxi drivers payouts Insurance payouts
Agents / self-employed payments Refunds / loyalty payments
Return to shop
Tips
20Increasing conversion and average
check: BNPL (buy now pay later)/
Order N2354235 “Dolyame”
3 installments left for 9 210
The only non-credit BNPL service in Russia
Pay immediately 9 210
Separate Dolyame.ru brand and mobile app for promoting merchants
3 payments left Purchase is split into 4 interest-free payments every 2 weeks
Paid 28 September
Good for low ticket high intensity commerce: clothes, accessories, cosmetics
Pay now
To be charged 12 October
Average check ~Rub 8,000 (50% higher average check than for other payment methods)
To be charged 26 October
Customer purchase journey takes less than a minute
To be charged 9 November
>90% customers are approved to shop
Card to be charged
More on this in future Tinkoff presentations
21Which account do you want
Koshelek Pay
to use to pay for purchases?
Selected account will be used by default. There
is no additional fees. You can always select
another account in the control panel. LOYALTY CARD
Tinkoff Black account
Koshelek Pay is a service for Tinkoff Platinum credit account
Card is active
offline contactless payments You can earn and spend loyalty points
Payment method
via smartphones using: Card credentials
Faster Payment System
Purchase
Digitized cards St Petersburg, Petersburg avenue
Balance
Faster Payment System Subtotal
Total
Pay
BNPL (“Dolyame”) Special offers
CONTINUE Pay
1 2 3
Select an account in Koshelek Scan your loyalty card Confirm your purchase
for quick payment at checkout with single tap
22Offline payment solutions
All popular payment methods (Apple Money credited the next day, even
POS acquiring Pay, Google Pay, contactless cards, during weekends
terminal Alipay, Faster Payment System) All transaction data available on the
Free terminal, no subscription fees merchants web portal
Cash register is integrated Free registration with tax authorities
Online cash with POS terminal and online fiscal data transfer set up
register
New service Available for any smartphone Certified according to the
with NFC based on Android requirements of international
SoftPOS terminal 7.0+ payment systems
on any Android Acceptance of contactless bank Partial and full refunds, access
NFC device cards, Apple Pay, Google Pay, rights management
Faster Payment System
234.
Our customer portfolio
tinkoff.ru
tinkoff.ruOur online acquiring customer base keeps growing
Active online merchants, Online acquiring TPV
EOP, 000s Payments, Transfers,
Rub bn Rub bn
514
46
402
174
32 266 167
111
1H21
142 1H21
21 69 67
474
339 307
25 17 292
3 199
10 9 13 125
2 66
2015 2016 2017 2018 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021
Note: Payments include card purchases of goods and services. Transfers include card to account and account to card transactions 25We service a diversified E-commerce payments categories
pool of e-commerce Goods, Electronics and Non-food Retail 24%
merchants Education
Groceries
14%
11%
Travel 9%
Airlines 6%
Merchants by monthly turnover
Restaurants & Fastfood 6%
Utilities 5%
Fashion & Beauty 4%
Auto 4%
27%
1000m Advertising 3%
Charity 2%
13% Insurance 1%
50-250m
24% Medical Services 1%
250-1000m Other 5%
0% 5% 10% 15% 20% 25% 30% 26We also rapidly expand offline acquiring base
Active offline merchants, Offline acquiring TPV,
EOP, 000s Rub bn
55 1H21
44 109
37 90 1H21
21 61
14
2018 2019 2020 2021 2018 2019 2020 2021
275.
Our monetisation
tinkoff.ru
tinkoff.ruWe take a slice of every payment or transaction
Tinkoff Acquiring
Gross acquiring Service fee Acquirer fee Payment Interchange fee
fee system fee
PF/PSP* Acquirer bank MC/Visa/Mir Issuer bank
Note: *Payment facilitators / Payment service providers 29Monetization is mostly reliant on growing volumes
Acquiring TPV Gross acquiring fee Gross acquiring revenue,
Offline acquiring TPV, Rub bn
Rub bn
Online acquiring TPV, Rub bn
2.0% 5
350
1.8%
300 1.6% 4
250 1.4%
1.2% 3
200
1.0%
=
+
150 0.8% 2
100 0.6%
0.4% 1
50
0.2%
0 0.0% 0
2Q18
2Q19
2Q20
2Q21
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
1Q18
3Q18
4Q18
1Q19
3Q19
4Q19
1Q20
3Q20
4Q20
1Q21
Note: *Gross acquiring fee include all fees paid by the merchant 30Despite stable gross commissions, unit economics
are improving
Net revenue per merchant Net revenue margin
(vs 1Q20 base) (as % of TPV)
140% 0.76%
122% 0.70%
115% 0.68%
120% 112% 0.64% 0.64%
104%
100% 98%
100% 0.51%
80% Market
average
60%
40%
20%
0%
1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 2019 1Q20 2Q20 3Q20 4Q20 1Q21
31This all leads to significant revenue and profitability growth
Acquiring gross revenue, Acquiring net revenue, Acquiring PBT,
Rub bn Rub bn Rub bn
+80%
+32% +79%
4.3
11.2 2.3
8.5 +73% +71%
2.4 +69%
1.3
4.1 1.5
0.7
2.3 0.9 0.4
2019 2020 1Q20 1Q21 2019 2020 1Q20 1Q21 2019 2020 1Q20 1Q21
Note: Gross revenue as per IFRS segmental disclosure 32Newer cohorts show strong propensity
for monetization
Online acquiring
turnover by merchant
cohorts
300
2021
250
2020
200 2019
150 2018
Before 2018
100
50
0
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21
335.
Our growth potential
and targets
tinkoff.ru
tinkoff.ruWe are steadily growing our
market share… Top 3 banks in Russia
by online acquiring
TPV**
We are gradually …but are still small in total retail payments
increasing our online Russia card purchases turnover Tinloff share (rhs)
2020 TPV, $ bn
market share* …
10
2.5%
Tinkoff share in e-commerce
9
19.9
8
acquiring
2.0% Sberbank
7
6
1.5%
7.9
Rub Trln
5
4 VTB
1.0%
15% 3
12% 2 0.5% 7.2
1
0 0.0%
2020 1H21 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21
Source: *Tinkoff estimate based on Data Insight, CBR, **Nilson report 35…tapping into an expanding Russia still has high share of cash payments
in total retail relative to other markets
e-commerce market… India
South Africa
Indonesia
E-commerce penetration in Russia Mexico
is significantly lower than global average Japan
Italy
Russia 38%
36% Poland
Saudi Arabia
Brazil
27% Portugal
Australia
24%
Singapore
20% 20% Chile
16% Turkey
14% 14% France
13%
Germany
11% 10% 10%
8% USA
7% China
3% Switzerland
UK
Sweden
South Korea
sia
ico
Tu y
ey
ia
na
h A ia
UK
do A
Po d
Fr n
ea
ca
Ge d
ce
Finland
an
pa
l
lan
US
ss
So Ind
or
rk
fri
i
or
an
ne
ex
Ch
rm
Ja
Ru
W
K
M
Canada
th
ut
In
u
So
Source: Euromonitor, Goldman Sachs Global Investment Research, as of 2020 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 36…with sizeable 2%
Note: TAM is based on net acquiring revenues. It includes online and offline.
potential for
further gains 200
4
Tinkoff net revenues, Net acquiring revenue TAM
2020, Rub bn (purchases and transfers),
2023, Rub bn
37Customer acquisition Tinkoff Kassa
16%
leads origination
— we know how Sales
managers
to grow 43%
Online paid
promo
Fast new channels tests on small
budgets (test & learn) 41%
Organic
Driving higher penetration into traffic
large merchants
Wide performance marketing mix
300+ x6 x4
Strong aim at merchants education
(events, webinars, special projects,
10 mn incoming
press Tinkoff Kassa
publications audience requests yoy
own media ”Business secrets”) search
coverage
requests yoy
Full in-house marketing team
38Our growth ambitions
> ₽2T acquiring
Acquiring TPV (online and offline), TPV by end 2023
Rub bn
>2 000 >50% TPV 2020/23
CAGR
Broadly stable net
revenue margin
623
464
280
69 142
25
2015 2016 2017 2018 2019 2020 2021 2022 2023
39Our growth ambitions
> ₽2T acquiring
Acquiring TPV (online and offline), TPV by end 2023
Rub bn
>2 000 >50% TPV 2020/23
CAGR
Broadly stable net
revenue margin
623
464
280 Exploring international
69 142
25
opportunities
2015 2016 2017 2018 2019 2020 2021 2022 2023
406.
Appendix
tinkoff.ru
tinkoff.ruPayments is an important tool to monetize merchants
Payments Proprietary software
Online acquiring + BNPL Website builder
Offline acquiring Cloud call center
Online cash register Integrated accounting
QR payments
Invoicing
Customer reach
and loyalty
Merchant Lending for merchants
Working capital loans
Tinkoff Target offers and cashback Overdrafts
Koshelek loyalty card app Secured loans
Tinkoff Lifestyle super app
Partner solutions Lending for customers
Marketing tools Credit cards
ERP and accounting POS lending
Cloud services Installments 42Superior customer Personal managers support 24/7
service is a key Professional advice on acquiring > 50 employees
competitive advantage Personalization and flexibility
Finding and developing extraordinary solutions
for merchants’ needs
Own technical Infrastructure
End-to-end analytics, products, developers team
Merchants’ education
Learning webinars
Education at conferences
“Business secrets” media
Providing markets’ analytics
300+ dedicated
employees
43Summary financials Note: IFRS segmental disclosure. Due to rounding,
some individual fugures may not add up to their totals.
in ₽ bn or otherwise stated 1Q20 2Q20 3Q20 4Q20 1Q21 1Q21 / 1Q20 2019 2020 2020/2019
Gross revenue 2.3 2.3 2.8 3.7 4.1 73% 8.5 11.2 32%
Expense -1.9 -1.8 -2.2 -3.0 -3.3 74% -7.2 -8.9 24%
Fee and commission expense -1.5 -1.4 -1.7 -2.4 -2.6 75% -6.1 -7.0 14%
Administrative and other operating expenses -0.4 -0.4 -0.4 -0.5 -0.7 86% -1.0 -1.7 71%
Customer acquisition expense -0.1 -0.1 -0.1 -0.1 -0.1 12% -0.1 -0.3 x2.8
Segment result 0.4 0.5 0.6 0.8 0.7 69% 1.3 2.3 79%
TPV 128 128 160 212 235 84% 464 623 34%
Active merchants (EoP ‘000) 61.7 57.7 68.9 75.9 92.0 49% 58.4 75.9 30%
Cost/Income ratio 41% 39% 38% 37% 45% 3.5 р.р. 41% 39% -2.1 р.р.
Cost/Income ratio (incl. acquisition) 49% 49% 45% 43% 50% 0.8 р.р. 46% 46% -0.5 р.р.
PBT margin (Segment result / Revenue) 19% 21% 21% 20% 18% -0.5 р.р. 15% 20% 5.3 р.р.
Gross acquiring margin (Gross revenue / TPV) 1.8% 1.8% 1.8% 1.8% 1.7% -0.1 р.р. 1.8% 1.8% 0 р.р.
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