COMPETITION AND THE REGULATION OF RETAIL PAYMENT SYSTEMS

Abstract

The Russian banks have not been paying enough attention to the retail payment services segment while having low expenditure and getting good income from loan business and operations with the Russian Central Bank. Now that they are suffering from the crisis, the banks' income from investment and loan business has plummeted, and they have to look for other income sources. It is appropriate to mention here that one of the basic bank's functions is to be an intermediary in payment-making activity, including the operations made by the individuals. The international experience shows that the income from such kind of operations has always been similar to the interest income. The author argues that it is time for the banks to enter the market segment. Nevertheless, it turns out the market segment is already successfully occupied by other players proceeding from the non-bank market segment. The banks are now beginning to address the legislators to change the market situation. The article author thinks the Bank of Russia as a state representative regulating the market operations should create the same business opportunities for all the stakeholders to play on the market, put an end to the overregulation of banks' operations and set certain requirements for the non-bank organizations to meet, that is, the registration requirements, the equity capital requirements, the risk management requirements, etc.