This post by Todd Nuttall, CEO of Better ATM Services, first appeared on www.atmmarketplace.com.
Leo Tolstoy had it right. A century after his death, I find myself marveling at the stark contrasts in a country still wrestling with the evolving payments industries.
I just returned from a speaking engagement at the Fifth International PLUS Forum Cash Circulation + Self-service Banking and Retail 2013 in Moscow. What a dichotomy.
Here you have the younger population already embracing smart phones, but prepaids are, in essence, still a world away. ATMs are the lifeblood of the average citizen, who seems caught between two realities — the old way and what we in the U.S. take for granted as a part of everyday life.
Having the opportunity to feel the winds of change begin to sweep through the ATM and prepaid industries was an experience I won’t soon forget.
In this part of the world, cash remains king — for now. I saw Moscow FILLED with ATMs. Local bank executives tell me the country boasts perhaps the highest saturation of ATMs per capita of anywhere in the world — some 1.7 ATMs per thousand people. This is a love affair of amazing proportions.
Yes, the prepaid is coming, but card payment behaviors are still evolving. Only 1 in 4 adults has a credit card, yet 75 percent of those who have credit cards don’t use them because they feel the card was “forced” on them by their financial institution.
These lingering suspicions seem a step back in time for us, but they are very real, and that’s what prepaid innovators must consider to crack the shell of this rich marketplace.
As I watched how people purchased subway passes, phone services, meals and entertainment, I could see that the stage is set for a great change in the coming years. There is a lot of room to make things more convenient, to shorten lines and wait times, and to improve safety and security.
Yet, along with these contrasts are the seemingly universal truisms. Take the behavioral split between younger and older generations who seem miles apart in embracing technologies here. We see the youth who have not experienced the lines and controls of communism, eagerly looking to the West. And we see the older generation still struggling after facing major cycles of difficult change as the region exited its old ways.
As in so many nations before it where prepaids have swept in and been welcomed, thanks to the innovators who have made it culturally comfortable to take that next step, I found myself thinking about what it will take to build alliances, grow trust, evolve the products and adapt the marketing messages to uniquely local perspectives.
I left my Moscow experience with confidence that the opportunities are massive. Those who find the way to supplant cash behavior with the added controls, security, services and convenience of credit, debit and prepaid products will quickly become the accepted “new way.”
Just as we’ve seen many parts of the world leapfrog from “no home telephone” to “everyone has a cell phone,” we are going to witness a seismic fundamental shift to payment products that will bring great benefits to this region.
These are heady times in Moscow, and as I look to the future of Russian ATMs and prepaid markets, I’m ready to become a catalyst for change. Are you?