PAYMENT SYSTEMS INTEROPERABILITY: INTERNATIONAL EXPERIENCE AND ITS IMPACT ON THE DEVELOPMENT OF INTEROPERABILITY IN RUSSIA
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Journal of Management Information and Decision Sciences Volume 25, Special Issue 2, 2022
PAYMENT SYSTEMS INTEROPERABILITY:
INTERNATIONAL EXPERIENCE AND ITS IMPACT ON
THE DEVELOPMENT OF INTEROPERABILITY IN
RUSSIA
Yuri Mikhalchevsky, Saint-Petersburg State University of Civil Aviation
Natalya Baydukova, Saint-Petersburg State University of Civil Aviation
Alexander Gubenko, Saint-Petersburg State University of Civil Aviation
Alexander Ivanov, Saint-Petersburg State University of Civil Aviation
Victor Dostov, Saint-Petersburg State University
ABSTRACT
The paper analyzes the peculiarities of interoperability of payment systems, as well as
various conceptual approaches to its implementation. The definition of currency interoperability
is formulated, the differences in the forms of interoperability of payment systems are analyzed.
The impact of interoperability on both the development of the financial services market and fi-
nancial inclusion is assessed. Using the example of international experience, the paper analyzes
the differences in conceptual approaches when introducing interoperability at the level of na-
tional payment systems and private payment systems, as well as efficiency in various conditions
when introducing interoperability from above and below (bank-based and non-bank based).
Also the paper analyzes the Russian payment systems market from the point of view of its struc-
ture, interoperability and its further development, and also gives recommendations to the regu-
lator to ensure the stable development of this market and provide equal services for all its par-
ticipants.
Keywords: Interoperability, Payment System, Fintech, Cashless Payments, Ecosystem, Mobile
Payment, Mobile Account, Electronic Wallet
INTRODUCTION
The purpose of this paper is to analyze the world experience in the implementation of in-
teroperability in the payment services market, as well as the level of development of interopera-
bility in the Russian payment market, to determine the main ways of developing interoperability
in Russia.
The scientific novelty of this paper is based on the following:
1. The characteristic differences between the interoperability of payment systems and the interoperability as it is
are formulated, the definition of the concept of currency interoperability is given.
2. Conceptual approaches to the implementation of interoperability and their implementation on the example of
different countries are considered.
3. The current situation on the development of interoperability in the Russian payment services market is ana-
lyzed, on the basis of which recommendations are given for the further development of the interoperability of
Russian payment systems.
Our task was to show that in the context of the development of modern information
technologies, the obstacle to the development of interoperability is often not the technical level
of interoperability, but the levels responsible for the sharing of information in the business envi-
ronment, in the context of the tasks being solved, in the conditions of coordination of assump-
tions and restrictions and a changing regulatory framework.
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Citation Information: Mikhalchevsky, Y., Baydukova, N., Gubenko, A., Ivanov, A., & Dostov, V. (2022). Payment systems interop-
erability: International experience and its impact on the development of interoperability in Russia. Journal of Management Infor-
mation and Decision Sciences, 25(S2), 1-11.Journal of Management Information and Decision Sciences Volume 25, Special Issue 2, 2022
A lot of world experience has already been accumulated in the implementation of in-
teroperability, however, conditions in different countries are not the same, therefore our task
was to show which concepts of the development of interoperability can be applied to Russia.
Theoretical Aspects of Payment System Interoperability
There is no single definition of interoperability. Many organizations give their defini-
tions that help these organizations solve their current problems. The ICCRT Symposium materi-
als show that about 30 definitions have been proposed over the past decade, while it can be also
noted there that over the past 3-4 years there has been a tendency to highlight a small number of
definitions around which stakeholders are consolidating.
Therefore, we will use the definitions given by official standardization organizations
such as ISO and GOST (Russia Government Standard) as providing the highest level of consen-
sus.
ISO: The ability of two or more systems or components to exchange information and to
use the information that has been exchanged (ISO/IEC/IEEE 24765:2017 Systems and Software
Engineering – Vocabulary).
GOST: The ability of two or more information systems or components to exchange in-
formation and use the information obtained as a result of the exchange (GOST R 55062-2012
Information technology).
Also, GOST R 55062-2012 defines three main levels of interoperability:
Technical Interoperability;
Semantic Interoperability;
Organizational Interoperability.
The classification of interoperability is discussed in more detail in (Dostov, 2020).
Even though the Standard GOST R 55062-2012 mainly relates to the information tech-
nology sector, its basic concepts can also be used in other areas of human activity since interop-
erability is one of the properties of open systems, which also include:
Extensibility / Scalability;
Mobility (Portability);
User Friendliness.
Payment systems are also open systems, therefore, the basic concepts, definitions, as
well as the classification of interoperability fully apply to payment systems, however, it is nec-
essary to highlight some points of the classification that are characteristic only for payment sys-
tems.
For payment systems, we distinguish another level of interoperability - currency interop-
erability, which we define as the ability of a payment system to make instant payments between
accounts in different currencies, both within one currency zone and outside of it, including pay-
ments in digital currencies and cryptocurrencies (regardless of the currency type). The imple-
mentation of currency interoperability should develop commodity-money relations of payment
market participants, serve the development of international trade, but today it depends and is
constrained by another level of interoperability - regulatory interoperability (the legal level of
interoperability). It should be noted that part of the currency interoperability was implemented
when Single Euro Payments Area (SEPA) was created.
Also, payment systems are characterized by the following forms of interoperability:
Interoperability of electronic money: two PSP, each of them offers two commercially and technically inde-
pendent electronic money services, connect their respective technical platforms to allow a client connected to
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Citation Information: Mikhalchevsky, Y., Baydukova, N., Gubenko, A., Ivanov, A., & Dostov, V. (2022). Payment systems interop-
erability: International experience and its impact on the development of interoperability in Russia. Journal of Management Infor-
mation and Decision Sciences, 25(S2), 1-11.Journal of Management Information and Decision Sciences Volume 25, Special Issue 2, 2022
one service to pay money from their electronic money wallet to the electronic wallet of another client con-
nected with another service.
Interoperability of financial institutions: one PSP, working with its own commercial and technically inde-
pendent electronic money service, combines its technical platform with the technical platform of the tradition-
al financial PSP to ensure interaction between the two platforms (i.e. a client sending money from a mobile
account to a bank score).
Interoperability of payment networks: one PSP, using its own commercially and technically independent elec-
tronic money service, connects to a separate payment system (that is, connects to Visa or MasterCard payment
networks).
A separate issue is a problem of measuring interoperability. There are about two dozen
models, methodologies or processes for measuring interoperability. These models can be applied
in various fields of activity, some of them are more narrowly specialized, models also differ in
frequency of use. One of the most popular is the tiered model of interoperability of information
systems (LISI) (Ford, 2007).
Conceptual Approaches to Interoperability
There are several conceptual approaches to interoperability that differ in the regulation
and business models. Traditionally, these approaches have been based on the types of transac-
tions serviced by payment system operators (Payment aspects of financial inclusion, 2016). The-
se are such types as: P2P - payments between people; P2B - a person pays for goods and ser-
vices to business; mass payments, including from government to person (G2P) and from busi-
ness to person (B2P); as well as cash-in and cash-out (CICO).
Recently, the concepts of A2A-interoperability, that is, interoperability between accounts
(account-to-account), have also been introduced and widely used. According to the GSMA defi-
nition, this means “interoperability between mobile accounts of different providers, as well as
between mobile accounts and bank accounts,” in other words, the ability of customers to transfer
money between two accounts in different mobile payment schemes or transfer money between
accounts in mobile payment systems and bank accounts. Thus, it includes both payments be-
tween people (P2P), that is, the ability for customers to transfer between their mobile accounts,
as well as transfers from a bank account to a mobile account (B2M) and from a mobile account
to a bank account (M2B). The GSMA definition also states that by increasing financial inclu-
sion, A2A interoperability increases the value of mobile payments for both operators and cus-
tomers (State of the Industry Report: Mobile Money 2015).
Currently, interoperability between banks and mobile payment operators is developing
most actively. B2M transactions significantly exceed M2B transactions, as customers use bank
accounts to replenish mobile wallets, and then either withdraw money or transfer them to other
users. Thus, B2M interoperability helps to connect the non-banking sector with the banking sec-
tor.
In each particular market, only a few options may be interoperable. This is emphasized
by the fact that interoperability directly related to financial inclusion is not only an unhindered
exchange of transactions between PSP; interoperability helps deploy agents with CICO access
points when mobile payment agents are allowed to process transactions from multiple mobile
payment operators. This may or may not include the use of a shared common account, aggregat-
ing funds of all customers, to reduce liquidity risk. In this case, interoperability can help to de-
termine how parties are compensated for the creation of this infrastructure.
Agent interoperability provides a number of the same benefits as account interoperability
(A2A). According to the GSMA study, customer service agents of different payment platforms
using a single aggregated account significantly reduces liquidity risks (GSMA London Office,
2015).
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Citation Information: Mikhalchevsky, Y., Baydukova, N., Gubenko, A., Ivanov, A., & Dostov, V. (2022). Payment systems interop-
erability: International experience and its impact on the development of interoperability in Russia. Journal of Management Infor-
mation and Decision Sciences, 25(S2), 1-11.Journal of Management Information and Decision Sciences Volume 25, Special Issue 2, 2022
The GSMA Mobile Payments Interoperability Development Program emphasizes that
focus should be on A2A interoperability due to potentially strong network effects. GSMA also
highlights key functional requirements for A2A interoperability as the ability to:
Direct transactions between mobile accounts of different operators;
Direct transactions between mobile accounts and bank accounts;
Settlements between mobile payment systems and between mobile payment systems and banks;
Implementation of common risk management practices that preserve the integrity of individual mobile pay-
ment systems.
Interoperability adds the ability for customers to interact with other payment systems’
customers, increasing the size of the entire payment network and improving financial inclusion.
There are a number of studies that evaluate actual transaction data to show that a positive net-
work effect applies to payment systems in the same way as telecommunication networks. Con-
cerning mobile payments, this increases the number of transactions made in participating sys-
tems, which, in turn, increases the income of operators from transactions. For customers, in-
teroperable payment systems expect a reduction in commissions, there is no need for CICO, and
money can remain in mobile wallets (Camner, 2012). Thus, transactions are cheaper, and in
general, the number of users of money transfers increases, which increases the number of trans-
actions.
Another advantage on the supply side is that interoperability creates a more balanced
market for mobile payment operators. This makes it more attractive for operators to study the
possibilities of differentiating offers, for example, by creating additional services. Greater dif-
ferentiation benefits consumers and further enhances the attractiveness of mobile payment ser-
vices.
International Experience in Implementing Interoperability
The differences in the implementation of interoperability in different countries are de-
termined by three main factors:
The presence of a national law on the payment system, i.e. the law that governs the payment system of this
country;
The presence of a national payment strategy, i.e. a strategic document defining the main directions of de-
velopment (“road map”) by the national payment system of this country;
Availability of regulatory documents for mobile payment systems (formal and informal), i.e. laws, regula-
tions, guidelines, directives, resolutions, and other documents relating to electronic payment systems or, in
particular, mobile payment systems.
Thus, there are two main directions of the development of interoperability:
The development of interoperability at the level of the national payment system
The development of interoperability at the level of mobile payment systems.
These areas intersect at the level of the banking system. With regard to mobile payment
systems, two main approaches are possible: implementing interoperability from the above and
from the below. When implementing interoperability from the top the regulator has proposed
initiatives for «full integration» of mobile payments with the dominant mobile payment operator
or partnership schemes (Bourreau, 2015).
In 2014, a national mobile money “ecosystem” was created in Peru by the Association of
Banks (ASBANC) (Aylward, 2015). The platform, developed with the help of Ericsson, creates
a common, interoperable environment in which customers can access several mobile financial
services through the cooperation of both banks and mobile operators.
The legal framework for mobile payments was introduced in Nigeria in 2009. Nigeria
has a mobile payment system on a banking basis. The regulator limits the role of mobile opera-
tors, providing them with the ability to connect to a single national platform for mobile pay-
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Citation Information: Mikhalchevsky, Y., Baydukova, N., Gubenko, A., Ivanov, A., & Dostov, V. (2022). Payment systems interop-
erability: International experience and its impact on the development of interoperability in Russia. Journal of Management Infor-
mation and Decision Sciences, 25(S2), 1-11.Journal of Management Information and Decision Sciences Volume 25, Special Issue 2, 2022
ments. Agents can enter into agreements with several banks at the same time (IFC Mobile Mon-
ey Scoping. Country Report: Nigeria. 2012).
In Pakistan, the regulation of mobile payments is carried out on a banking basis and is
regulated by the "Rules for off-branch banking operations: for financial institutions wishing to
conduct banking operations outside of branches." Mobile payment services include bill payment
and payment for goods. P2P transfers are allowed, as well as transfers to persons who are not
account holders (based on the "Rules Out of Banking Services" of 2011). Pakistan has strict
KYC rules that require agents to photograph applicants, as well as their other identifications,
which is an obstacle to financial inclusion, given the cost of equipping agents with cameras
(Radcliffe, 2013).
The Central Bank of Mexico (Banxico) created in 2004 the system of interbank electron-
ic payment system SPEI (Sistema de Pagos Electrónicos Interbancarios) formally for the finan-
cial sector, currently uses it as a clearing and settlement mechanism for transactions on small
amounts, including mobile payments. Since 2014, Banco de México has been regulating mobile
payment services to achieve interoperability of mobile payments, stimulate competition among
mobile PSP and reduce associated costs (Almazan, 2018).
In Ghana, formally, interoperability was introduced in 2008, but did not develop until
2016. However, in September 2016, the Central Bank of Ghana announced that it had initiated a
project to introduce an interoperable mobile payment infrastructure and was negotiating with
interested parties on its implementation (Bruce, 2016).
The introduction of interoperability from below consists in the voluntary development of
interoperability by concluding bilateral agreements between mobile payment operators, which
can be both banks and non-banking organizations.
In 2013, interoperability was introduced in Indonesia, where the implementation of mo-
bile payments is based on a non-bank basis and is regulated by the Bank of Indonesia Regula-
tion on Fund Transfers and the Regulation on Electronic Money. Indonesia recently removed
regulatory barriers that prevent agents from providing “cash out” services, allowing agent net-
works to expand (Camner, 2013). The regulation requires that electronic money issued by off-
site banking providers be credited to the combined account (Stapleton, 2013).
In Tanzania, the “Guide to Electronic Payment Schemes” was adopted back in 2007.
These rules allow both banks and non-bank organizations to submit applications for the imple-
mentation of the electronic payment system. In 2012, more detailed mobile payment rules were
developed in Tanzania (IFC, 2015).
In India, mobile payment systems are regulated by the Payment Banks Licensing Guide.
Thanks to the rules and regulations updated in 2014, India is moving from a banking to a non-
banking approach, which allows mobile operators to open deposit accounts and make payments
to customers. Accounts are entitled to apply the simplified KYC rules (Kumar, 2015).
Some factors can influence the rate of increase in mobile payments in a particular finan-
cial market, however, studies show that, in rare cases, an accelerated increase can occur several
months after the initial introduction of mobile payment systems to the market, but most coun-
tries require at least one year, while others took more than four years to achieve high growth
rates. After reaching a certain critical mass in the mobile payment system, a steady increase can
continue for many years (Evans, 2015).
Let us consider the development of interoperability at the level of national payment sys-
tems using the example of the introduction of fast payment systems as the most fully reflecting
various aspects of the implementation of interoperability: technical, technological, organization-
al, regulatory, etc. Various instant payment systems have been developed in some European
countries and outside the Eurozone, which usually used the infrastructure of national clearing
and settlement mechanisms (CSM). Еxperience with similar fast payment systems shows that
the process of implementing such systems also went on gradually and was not immediately in
demand among customer customers of these services. For example, in Italy, FPS has been intro-
duced over the past 3 years and is still not in great demand and amounts to a small percentage of
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Citation Information: Mikhalchevsky, Y., Baydukova, N., Gubenko, A., Ivanov, A., & Dostov, V. (2022). Payment systems interop-
erability: International experience and its impact on the development of interoperability in Russia. Journal of Management Infor-
mation and Decision Sciences, 25(S2), 1-11.Journal of Management Information and Decision Sciences Volume 25, Special Issue 2, 2022
the total payment flow. To increase this percentage, it is planned to simplify the activation pro-
cess. To solve this problem, the Bank of Italy involved all payment service providers (PSP),
which, in turn, organized information on all the possibilities of these systems, realizing that in
the future these systems will be in demand among the population. Another example is the intro-
duction of the UK Faster Payments. The system was launched in 2008 and not all banks wanted
to participate in it. However, in 2011, the Payment Services Directive came into effect regarding
the time of processing payments and all banks were forced to join this system (Fast payments -
Enhancing the speed and availability of retail payments, 2016).
The problem with the development of national fast payment systems was that they have
stopped at national borders, violating the concept of a single market, while the payment integra-
tion of the European Union was implemented in SEPA. Therefore, by the end of 2014, the
ERPB (Euro Retail Payments Board) had identified the need for a pan-European euro instant
payment solution. In November 2017, a new EPC (European payments Council) scheme by de-
veloping the SCT system (SEPA credit transfers) in SCT Inst (SEPA instant credit payment sys-
tem) as part of SEPA initiatives (AISBL, 2019) was officially launched, allowing users to trans-
fer money in euros using funds available on their accounts in less than ten seconds at any time in
36 European countries. To ensure full interoperability of the SCT Inst system, the European
Central Bank (ECB) has expanded its TARGET2 settlement system with the TARGET instant
payment system (TIPS), which provides 24/7 central bank settlements (World Payments Report
2018).
The State of Interoperability in Russia
According to Deloitte's research, the Russian banking sector continues to lead in the im-
plementation of new technologies in the financial sector (Financial industries of the Russian
Federation. Forecast, 2020). Technology helps reduce costs, attract new customers, and provide
them with faster and personalized services. Banks are actively developing products based on
data analysis, big data, machine learning, implementation of distributed ledger technologies,
artificial intelligence, robotic process, and voice interfaces.
In Russia over the past five years, the percentage of cashless consumer payments has
grown significantly. According to the results of the Sberbank study, the share of cashless pay-
ments in Russia as of the second quarter of 2019 amounted to 49.4% of the total expenses of
citizens of the Russian Federation. The three leading regions for cashless technologies are Mur-
mansk region, the Republic of Karelia and the Republic of Komi. St. Petersburg has an indicator
of 54.2%, while Moscow did not even make it into the top ten with a share of cashless payments
of 53%.. At the same time, according to the Deloitte study, the number of cashless transactions
in the banking sector exceeds 60%. Nevertheless, within this indicator, Russia is still far from
the leading countries in where the share of cashless payments exceeds 90% (see table 1) (Cash
in the digital era, 2019).
Table 1
THE SHARE OF CASHLESS PAYMENTS IN VARIOUS COUNTRIES
The share of cashless payments in the
Country % debit card holder
payment turnover ,%
Belgium 93
France 92
Great Britain 89
Sweden* 89 96
Note: * 89% is the share of cashless payments in the total volume of consumer pay-
ments, but we can also see that the percentage of the population with a debit card is one of the
highest
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Citation Information: Mikhalchevsky, Y., Baydukova, N., Gubenko, A., Ivanov, A., & Dostov, V. (2022). Payment systems interop-
erability: International experience and its impact on the development of interoperability in Russia. Journal of Management Infor-
mation and Decision Sciences, 25(S2), 1-11.Journal of Management Information and Decision Sciences Volume 25, Special Issue 2, 2022
According to the Federal State Statistics Service and the Bank of Russia reporting, in
comparison with the number of issued cards (settlement and credit), the population has 1.3 cards
per 1 resident as of 01/01/2020 (taking into account the entire population of children and people
of retirement age who do not always have cards), which security can be considered sufficient. At
the same time, for the whole of 2019, within the amount of funds spent on these types of cards,
transactions were performed in the total of 89107, 3 billion. rubles, of which 27,241.7 billion
rubles are cash withdrawal operations. Thus, more than 70% are transactions carried out on the-
se cards in performed in a non-cash way. Speaking generally about transactions with payment
cards for 2019 conducted on the territory of the Russian Federation in the total of 53 605.9 bil-
lion rubles, of which payment for goods and services with these cards amounted to 24 817 bil-
lion rubles, which corresponds to 46% of the total amount of cash. Thus, the share of cash with-
drawals from cards amounted to more than 50%. At the same time, the regulator in the pub-
lished statements does not divide the type of issuing payment cards: by resident banks or non-
resident banks. Generally, regarding the reporting provided by credit organizations to the regula-
tor (reporting form № 0409251 (Bank of Russia Ordinance No. 4927-U dated 08.10.2018)), no
open-access information can be found, which could help to separate information between the
payments made by banks and the payments made by non-bank credit organizations, which, in
turn, are mostly electronic payment systems. From here, one could analyze the relevance of the
implementation of interoperability in these organizations, because they carry out identical opera-
tions in the payment market. We would like to note that in this reporting form there is also in-
formation about the amounts and amounts of payments to individuals made by credit organiza-
tions (branches) through messages sent using text messaging service (SMS). This data would
also allow us to compare the final number of users providing the same type of payment services,
the introduction of interoperability in the technologies of which could lead to a decrease in the
cost of payment services and would improve both the quality of service for individual customers
and the security of their operations.
Starting from the 2008 reporting, the indicators for the number of opened accounts as of
01.04 are always lower than as of 01.01 of the year under review (at the beginning of the year),
and then indicators begin to grow smoothly. Moreover, if we take a 5-year period starting in
2015 (the main peak of the interoperability implementation occurred in East Asian countries
precisely in 2012), according to the Bank of Russia reporting, the number of accounts as of
01.01.2020 was only 64% of clients opened accounts (254 522 accounts) of which: the number
of individual accounts according to 5-year data was only 75% of the total, while in the latest
annual reporting the number of individual accounts is already 97% of all open bank accounts
(see table 2).
Table 2
THE NUMBER OF ACCOUNTS WITH REMOTE ACCESS OPENED IN CREDIT
ORGANIZATIONS
Of these, open Accessed via messages
The number of accounts opened With Internet
to individuals, using mobile subscriber
by credit organizations access
total devices
01.01.2020 year
254 522,0 248 012,7 239 089,7 180 261,2
01.01.2015 year
162 833,2 122 315,8 80 916,0 64 597, 8
Analyzing the data presented, it should be noted that if in 2015 accounts using the Inter-
net reached for 66% of all accounts of individuals, then in January 2020, they have also in-
creased by 25% and amounted from 66% to 96.4%.
Data on payments using mobile applications did not grow so actively (increase from
52% to 73%). This circumstance can be explained, among other things, by the fact that the quick
payment service in the payment system of the Bank of Russia was launched only in 2019.
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Citation Information: Mikhalchevsky, Y., Baydukova, N., Gubenko, A., Ivanov, A., & Dostov, V. (2022). Payment systems interop-
erability: International experience and its impact on the development of interoperability in Russia. Journal of Management Infor-
mation and Decision Sciences, 25(S2), 1-11.Journal of Management Information and Decision Sciences Volume 25, Special Issue 2, 2022
At the same time, the data presented do not fully characterize the cashless payment
transactions of individuals, i.e. the data presented include the calculations of individuals carried
out both on current accounts and on credit and payment cards, i.e. it is impossible to see from
the analyzed data: how many payments are made through bank accounts, and what payments are
made through card and electronic payment systems.
Let us analyze the cashless payments of individuals made in 2019 through the Faster
Payments System (FPS) (see table 3).
Table 3
COMPARATIVE DATA ON MONEY TRANSFERS THROUGH THE FASTER PAYMENTS
SYSTEM
2019 y Total money transfers Using the FPS
amount, million volume, billion
amount, million units volume, billion rubles
units rubles
I quarter 361,4 347 740,1 0,1 0,4
II quarter 412,3 381 742,3 0,9 8,3
III quarter 438,1 409 183,5 1,9 17,2
IV quarter 503,9 427 795,6 3,8 33,6
2019 year 1 715,7 1 566 461,4 6,7 59,6
Within the total number of payments made in the Bank of Russia payment system, the
share of retail payments made using the FPS service is insignificant and amounts to about
0.004%. Payments are being made by installing a mobile application at the client-individual
with the help of which payment is made either by the mobile phone number of the recipient cli-
ent or by using a QR code. Here, the safety of operations is particularly noteworthy. The cus-
tomer’s mobile phone can be “tied” to several customer accounts located in different banks. The
sending client may or may not have information about the receiving bank. Software criteria for
entering the FPS is different for different banks. Some banks offer the client a choice (Alfa
Bank) the entire list of banks operating in the market and the client himself must choose a bank
from the list offered to him. In case the client made a mistake in the receiving bank, the payment
will be refunded. Some banks either do not provide the customer with a choice of the recipient
bank or provide the entire list of customer accounts that are opened with different banks, which
is not safe and is a bank secret. Therefore, in this case, in our opinion, more clear-cut criteria are
necessary for linking a mobile phone to a specific client account, otherwise, in the processing
center of the Russian National Payment Card System (NSPK) that services the UPS system, one
information may be available for all information about all available to the client accounts in dif-
ferent banks. This is also one of the criteria that can be solved within the framework of interop-
erability of the participants of the payment services market: banks, non-bank credit organiza-
tions, fintech companies. Currently, in the FPS, it is possible to make payments for housing and
communal services, to pay for goods and services in stores and on the Internet using a QR code.
Paying for goods with a QR code will reduce costs for sellers and time for purchases for buyers,
since payment will occur through the mobile application. In addition, it will allow the labeling
of goods to track supply chains and their origin. In the future, it is planned to connect to the FPS
all other payments, in other words, at the first stage of the implementation of the FPS, it is pos-
sible to make payments of the type C2C, then C2B (mainly, mostly using a QR code) and then
C2G. In our opinion, the introduction of interoperability would be very appropriate here. Of
course, the share of payments made in the FPS will grow, so the issue of interoperability is very
important. So, the payment systems of commercial banks are different, but common mecha-
nisms for interacting with everyone should be found to reduce costs and increase efficiency.
The introduction of distributed ledger technology allows banks to reduce transaction
costs and make transfers faster. In September 2019, Sberbank PJSC conducted a pilot transac-
tion for the supply of West Siberian oil with Trafigura through blockchain technology. reducing
operational risks and shortening the timeline for approval of documents. Also, in 2019, the first
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Citation Information: Mikhalchevsky, Y., Baydukova, N., Gubenko, A., Ivanov, A., & Dostov, V. (2022). Payment systems interop-
erability: International experience and its impact on the development of interoperability in Russia. Journal of Management Infor-
mation and Decision Sciences, 25(S2), 1-11.Journal of Management Information and Decision Sciences Volume 25, Special Issue 2, 2022
pilot projects were launched on the Russian blockchain platform Masterchain, developed by the
FinTech Association with the participation of the Central Bank of the Russian Federation.
Such participants of the Russian banking market as Sberbank, Tinkoff Bank and Alfa
Bank saw the prospects for the development of digital technologies in time and began to com-
pete with payment systems, providers and mobile operators. In Europe, a highly competitive
environment was created in the financial services market - between banks and fintech compa-
nies, which have become the main operators of digital services. Soon in Europe, customers will
be able to receive a range of financial and non-financial services from a single provider (Deloitte
Development LLC, 2018). This experience should be considered by the banking sector and the
regulator.
2019 set the trend for the creation of ecosystems that provide customers with a mobile
application access to the services of not only banks, but also partners. Several major Russian
banks, in particular Sberbank, already tested and launched platforms in 2019 that allowed users
to have round-the-clock access to both banking and additional services, for example, making an
appointment with a doctor, ordering a taxi, ordering food delivery, watching movies and etc.
Ecosystems usually use artificial intelligence technologies that customize offers for each user.
According to GoMobile research, the growth of mobile application installations in 2018-2019 is
more than 41.5% (International Finance Corporation, 2012).
According to the Bank of Russia, ecosystems can adversely affect the competition of
segments whose members operate in ecosystems. At the moment, only large organizations can
place their services in banking ecosystems, gaining access to distribution channels and new cus-
tomers that are not available to small market participants.
Banks began to collect customer biometric data. Customer biometrics will help improve
information security, speed up the process of concluding transactions and preparing documenta-
tion through smart contracts, and will also make it possible to pay for purchases using biometric
data. The initiator of the biometric data collection process in Russia was the Bank of Russia.
One of the main projects of the Central Bank of the Russian Federation is Marketplace.
This is a good example of the implementation of interoperability, for which such innovative de-
velopments of other FinTech Association projects as standard open interfaces (Open APIs) and
FPS were used. The introduction of the Marketplace will provide customers with 24/7 access to
goods and services and at the same time reduce the cost of attracting new customers for banks.
CONCLUSIONS AND RECOMMENDATIONS
For the successful implementation of interoperability in Russia, it is necessary to create
an initiative group with a mandatory representation of the main financial regulators and repre-
sentatives of market participants. As an international experience, one can cite the example of
GSMA, which, as one of its political priorities, identified assistance in expanding interoperabil-
ity in the mobile payments sector and launched a special program for this purpose.
As the examples show, maintaining confidence in the financial system is of utmost im-
portance. Electronic payments are no exception, and if potential customers of electronic pay-
ments consider that their electronic wallets are unsafe, they will not want to have them. The
Bank of Russia plays a central role in building trust in the electronic payment system, including
the necessary conditions if an agreement on interoperability is reached. The regulatory body
should help establish clear rules and common standards. They can be based, for example, on
foreign experience - on the GSMA Code of Conduct for mobile payment providers.
Also important from the point of view of the development of the electronic payment
market is the issue of regulatory uncertainty. The Bank of Russia should set a clear path for its
future actions and make a commitment, because the uncertainty about how it will regulate this
market may force operators to restrain investment. You should also make sure that the available
connection mechanisms are cost-effective and have approval from market participants.
9 1532-5806-25-S2-03
Citation Information: Mikhalchevsky, Y., Baydukova, N., Gubenko, A., Ivanov, A., & Dostov, V. (2022). Payment systems interop-
erability: International experience and its impact on the development of interoperability in Russia. Journal of Management Infor-
mation and Decision Sciences, 25(S2), 1-11.Journal of Management Information and Decision Sciences Volume 25, Special Issue 2, 2022
Also, the Bank of Russia could at the first stage encourage electronic payment operators
to conclude interoperability agreements, while at the same time protecting the market from the
prevailing influence of large operators.
To summarize, we can offer the following recommendations:
The introduction and development of interoperability in the payment services market will undoubtedly create a
positive effect, which consists in increasing efficiency and reducing costs both for organizations providing pay-
ment services and for their consumers;
The Bank of Russia should determine the factors holding back the development of interoperability in the pay-
ment services market;
The Bank of Russia should encourage payment market participants to independently adopt interoperability
agreements before introducing mandatory interoperability, at least for a period of relative market instability;
The Bank of Russia, together with payment system operators, must determine clear rules for the development of
interoperability and take measures to preserve regulatory certainty for the long term;
The introduction of mandatory interoperability at this stage carries certain risks, because it can reduce competi-
tion in the payment services market and reduce private investment.
ACKNOWLEDGMENT
The presented article is based on the scientific contribution of Natalya Baydukova, de-
veloping the theoretical approach of the interoperability of the financial market payment system.
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Received: 29-Nov-2021, Manuscript No. jmids-21-9152; Editor assigned: 02- Dec -2021, PreQC No. jmids-21-9152 (PQ); Reviewed: 13- Dec
-2021, QC No. jmids-21-9152; Revised: 18-Dec-2021, Manuscript No. jmids-21-9152 (R); Published: 06-Jan-2022.
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Citation Information: Mikhalchevsky, Y., Baydukova, N., Gubenko, A., Ivanov, A., & Dostov, V. (2022). Payment systems interop-
erability: International experience and its impact on the development of interoperability in Russia. Journal of Management Infor-
mation and Decision Sciences, 25(S2), 1-11.You can also read
