Non Bank Payments: Webmoney & Plastic Cards (part 5)

Since Russian consumers are not big credit card holders, it is basically impossible to fund a Webmoney account with a credit card. Additionally, Webmoney transactions are not reversible and credit cards can easily be "charged back" making this type of transaction extremely risky. There are also restrictions on credit card use because of the massive and obvious fraud which occurs with plastic credit. Also, no Webmoney digital currency can be ´cashed out´ to a credit card. Any plastic card can be preloaded and given to a third party which poses the risk of money laundering and this type of exchange is not permitted with Webmoney Transfer.

These restrictions are in total contrast to the how the U.S banking system operates. American consumer live and die by their plastic! A common attitude is, "why use cash when a plastic card is so safe and convenient?" Popular American television ads depict the world coming to a complete stand still as a shopper writes a check instead of using their Visa Debit Card!

Cash access or life without an ATM card can be a big problem for any non bank population. Non bank consumers, even more than card holders, need timely & direct access to cash. Without credit cards, and no ATM access, how does the average Russian Webmoney user gain access to cash on a daily basis?

"While sitting in the Moscow office of Webmoney Transfer, this was the question I posed to my gracious hosts. Jane took me to another room where a delightful young lady named Irina, proceeded to show me a Webmoney transaction she called a ´money order´. Please understand that there is bit of info lost-in-translation here. The phrase ´money order´, more correctly translated would mean ´money transfer order´. (there is no check sized paper slip that gets signed and cashed) From within the Webmoney system, Russian account holders can ´order up some money´ [cash] to be immediately picked up locally at any of an estimated thousand+ locations. In this particular transaction, the WMR ruble funds were being moved from the Webmoney online purse and sent via Anelik (which is a local cash transfer system similar to Western Union) to a pick-up location just blocks away."

The Webmoney software is integrated with many independent local Russian and global payment services. These services handle cash transfers and this marriage with Webmoney makes cash available to Russian Webmoney users at any time. No plastic card needed.

From the Webmoney account screen, Irina demonstrated how to initiate a cash transfer to a nearby location. (the actual address for pick-up, the location must be specified in advance) Without a bank ATM card or visiting a third party exchange agent, this "money order" operation is how local Russians access cash without a bank account or ATM card.

I was told there are about ten payment services that work with Webmoney and are integrated into their software platform (this changes occasionally), but the day we walked through a transaction there were 6 online payment systems visible from the Webmoney screen. This means any Russian Webmoney user can log in, send some WMR digital units through a local payment service and only minutes later pick up the cash at a nearby location. (it´s very fast) Since the Webmoney system is NOT connected to any ATM card, this local cash payment solution works extremely well. The operation also turns out to be very regulated and more secure than any plastic card transaction. After logging into their own Webmoney account, the owner of the account initiates this spend directly through the local payment service in real time. In reality, the account owner is sending a money transfer to themselves. (no third parties)

(Remember, Webmoney is an Internet payment system which is directly integrated with other non bank payment solutions. This non bank package allows anyone to transfer and access funds from a home computer. While no bank account is ever required, this process is very regulated and secure.)

In the U.S. this action might be compared to logging into your home computer and sending yourself a Western Union instant money transfer. There are many of these bank pick up locations around Moscow, and still more locations in post offices around Russia. Unlike the United States, all cash pick up points are either found in a bank or a Post Office. There are no third party businesses in strange neighborhoods. The local Russian banks have integrated these non bank payment systems into their everyday services. Funds are accessed directly from the bank's lobby just as if it was a regular bank deposit. Amazingly, the same bank teller which accepts a bank deposit also processes this type of transfer.

This type of Webmoney payment is safe, regulated and very convenient to all Russians, especially those without a bank account! The pick up location Irina and I visited just a few blocks away from the Webmoney office was a regular bank lobby. The paperwork to pick up the cash was completed at the bank counter just like any other bank transaction. To identify the receiver, a Russian passport was required. Only the original Webmoney account holder (sender) can pick up these funds. Third party transactions are NOT permitted.

It is really astonishing to see how effortlessly this non bank system functions. While this exchange transaction is much more secure and regulated than a prepaid ATM card, due to U.S. regulations such as those found in the Patriot Act, an Internet payout system such as this one is NOT possible in the United States. Here is a list showing four of the six payment systems integrated with Webmoney and accessible from the Webmoney page the day I visited.

Contact Money Transfers

http://www.contact-sys.com/eng/index.phtml
Possible fee: 1.5-2% of Rubles transfer inside Russian Federation

Unistream Money Transfers

http://www.unistream.ru/en/intro.php
(Moscow-headquartered money transfer network that doesn´t require individuals to open a bank account)

Anelik Money Transfer

http://www.anelik.ru/eng/
Anelik ® system covers more than 100 banks all over the world. Anelik has highest turnovers in CIS and Baltic markets.

Allure Money Transfers

http://www.allure.su/?lng=2
The ALLURE Money Transfer System is designed to provide individuals – Russian Federation residents and non-residents – with accessible high quality service of transferring funds in Rubles on the territory of the Russian Federation and in foreign currencies abroad, without opening bank accounts.

Why would a local Russian use the "Money Transfer order" to withdraw fund?

Obviously, if you don´t have a bank account or an ATM card, you still need access to your Webmoney funds. These money transfer systems offer locations in busy areas around Moscow and this type of transfer may just end up being more convenient than your own bank. Finally, using a local payment system to access cash from a Webmoney account may be the only option available to you if you live in a rural area of Russia. In many cases there are no ATM machines or bank offices located in the very rural areas. However, there is always a post office and these payment systems also operate through the post. Within Russia, the maximum withdrawal per day on local cash systems if 300,000 rubles, which is equal to about $10,000 USD.