TCS Bank readies Russian mobile wallet for Christmas

Russia’s TCS Bank is hoping its mobile wallet will be a hit in Russia

Russian bank Tinkoff Credit Systems has become the latest financial institution to launch a mobile wallet service, which is due to go live on 1 December 2013. The new wallet will target Russia and will be available on both Android and Apple iOS devices.

Launched in 2007 by former Soviet coal miner-turned businessman Oleg Tinkov, TCS Bank has 3.5 million customers in Russia and the CIS countries. TCS has no physical branches anywhere; instead it focuses on offering mobile and internet banking.

The new mobile wallet provides person to person money transfers and payments in any internet store that accepts MasterCard using a mobile phone. Users will also be able to use the mobile wallet to pay utility bills and buy mobile top-up. In addition, users can use their registered accounts in social networks to make transfers to their friends.

The Russian bank says customers will be able to use their mobile number as an identifier, or their email, or their social network accounts on Vkontakte and Facebook.  The bank will receive interchange and merchant discount fees for nearly all transactions, it said, and there is no need for customers to have a bank account or obtain a bank card.

“We see enormous growth opportunities in the Russian electronic payments space and plan to tap into this opportunity,” said Oliver Hughes, chief executive of TCS Bank. Tinkoff mobile wallet has unique terms with zero transaction fees and with no need to open a bank account. This is a differentiated, convenient and light touch service which will create a new way of attracting customers to the TCS bank and insurance businesses.”

Earlier this year, TCS told Banking Technology about its customer acquisition strategy, which involves a startlingly comprehensive use of personal information about potential customers. “We build an online behaviour profile of customers,” said Hughes. “We look at the customer’s search profile and history, their social media interaction, their payment history, their device type and browser. This information tells us a lot about their risk. We can even see where they put the cursor on our website.”

The company can also tell where the customer came from when viewing the TCS website – whether they arrived via search engine, referral or marketing. The information comes partly from the Russian Credit Bureau – especially the payment history. The information is used to score customers. They even check with employers to verify how much the potential customer earns.

“We know the expected value of the customer over the life of the relationship,” he said. “We calculate that against the probability of default to make a decision about whether the customer is worthwhile.”

Several other mobile wallets have launched in recent months. In November, the telco-backed Isis mobile wallet service launched across the US, following 18 months of testing in Texas and Utah by owners AT&T Mobility, T-Mobile USA and Verizon Wireless. The country-wide roll-out is being backed by card issuers American Express, Chase, Capital One and Barclaycard and PoS terminal manufacturers Verifone, Ingenico, Vivotech and Equinox, which the backers hope will give the service impetus.

Meanwhile, earlier the same month Citi and mobile operator 3 Hong Kong co-launched an NFC mobile wallet in the form of a sticker for iPhone and mobile app for Android. A similar NFC-based mobile wallet was launched in Europe by Kalixa Group in July. The moneto prepaid wallet allows users to tap and pay for goods using their mobile. Users can check their balance, locate merchants and ATMs and make wallet to wallet transactions, supported by MasterCard’s PayPass technology. They can also withdraw cash at ATMs, make online purchases and shop at retail outlets that do not accept contactless payments.