By Victor Rodimov
Salt bricks and stones with a hole in the middle were once used as currency, followed by coins minted from precious metals. These were finally replaced by those made from base metals and by simple paper notes, which hold value only where trust exists. It’s one thing when we hold a piece of gold or silver in our hands but another when we must trust in paper bearing figures. With some minor exceptions, banknotes from early times were backed up by promises of redemption in gold or silver coins. Now, we are experiencing the same leap of faith as electronic money gradually replaces paper banknotes. Now, the advent of ‘electronic’ money has been legally confirmed in Belarus, as emphasised by the National Bank. Eight banks are now issuing cards, which can be preloaded with funds, as part of the international MasterCard system. In addition, Priorbank offers the Belqi system.
“Electronic payments are becoming more popular in Belarus every year. Over the last few years, the e-money market has expanded greatly,” notes the Deputy Chairman of the National Bank, Sergey Dubkov. “Unfortunately, we are yet to receive statistics for 2012 but, in 2011, Br1.23bn passed hands electronically in Belarus: up almost 2.5 times on the year before.”
At first sight, electronic money may resemble non-cash. During the first stage, a legal entity or an individual opens an account for electronic money using a special software product. Since this software product is integrated with Internet, it may seem that electronic money is money for Internet. Actually, everything is considerably more complex. This special software product should be integrated with Internet payments, as well as ATMs and various payment terminals, enabling to perform any transactions with electronic money on the Belarusian territory within the frames of the current legislation. Since only banks can issue electronic money in Belarus, these special software products should be only bank.
The second stage of electronic money circulation is its issue. A legal entity or an individual applies to a bank and brings cash money or transfers non-cash money into bank account. ATMs can be also used, alongside payment terminals. After receiving money, the bank issues electronic money only for the received amount. For this, a special record is kept where the bank acts as an issuer of electronic money but can’t be an initiator of its issue. Only funds held can be withdrawn. Then an owner of an electronic purse can use a special software product to buy goods, transfer money to other persons, exchange it for other electronic money and even make donations. Electronic money can be used to pay telephone bills, services of Internet providers, television, Skype, as well as, at train stations and in shops or restaurants. Cardholders can use their funds at home and abroad, even making charitable donations or transferring money to another person.
Despite the amazing potential for using the cards, most Belarusians tend to only use their e-money to pay mobile operators; such payments account for over 40 percent of all ‘electronic’ payments.
If you need to transform your e-money into cash or a cheque, the banks currently charge a fee of 2-3 percent; however, this may fall as the system gains popularity. According to the Director of Belarusbank’s Plastic Card Processing Centre, Anatoly Bogovik, young people are most likely to hold cards, being familiar with the Internet as a form of communication and information. However, with time, older people are likely to gain trust in the new system.
